The Impact of Palazzolo and Other Recent Cases on
Ripeness and Forum Selection in Takings Cases
Thomas E. Roberts
Professor of Law
Wake Forest University School of
Law
Winston-Salem, North Carolina
I.
Introduction
II.
Ripeness
A. The Basics
B. Palazzolo v. Rhode Island
C. Ripeness after Palazzolo
III.
Forum Selection Under Williamson County
and First English
A. The Often Overlooked Connection Between Williamson County and First English
B. Nature of the Cause of Action: “claims for just
compensation are grounded in the Fifth Amendment”
C. Preclusive Consequences of State
Court Action
(1)
Rooker-Feldman Doctrine
(a) Compared to Preclusion and Abstention
(b) Applications of Rooker-Feldman
in Land Use Cases: Anderson v. Charter Township of Ypsilanti
(2)
Res Judicata/Collateral Estoppel (Claim and Issue Preclusion)
D. Possible Exceptions Allowing a
Suit in Federal District Court
(1)
Futility of Using State Court
(2)
Reservation à la England
(3)
Diversity Jurisdiction: Vulcan Materials
Co. v. City of Tehuacana
(4)
Supplemental Jurisdiction: Appending a State Takings Claim
(5) Supplemental Jurisdiction: Appending an
“Otherwise Incomplete” Federal Takings Claim
(6)
Removal
(a) Consequences of Government Removal
(b) College of Surgeons and Support for the
Exercise of Jurisdiction Upon Removal
I. Introduction
Establishing ripeness and
determining the appropriate forum in regulatory takings litigation requires
consideration of a complex set of issues.
Williamson County Regional
Planning Commission v. Hamilton Bank of Johnson City [1] and First English
Evangelical Lutheran Church v. County of Los Angeles,[2] establish the basics with respect to takings actions
against state and local governments.
There are two requirements. Before bringing an as applied regulatory
takings claim a property owner must obtain a final decision from the
authorities as to how the property can be used. The second requirement is that
all takings claims[3] be filed in state court.
The first prong is based on the idea that a court cannot determine
whether a regulation has gone “too far” without knowing “how far” it goes. The
second stems from the fact that the Fifth Amendment takings clause does not
proscribe takings, but only takings without compensation. Thus, state remedies
for compensation must be pursued.
This paper examines the basic rules
of ripeness and forum selection and includes the impact of the United States
Supreme Court’s decision in Palazzolo v.
Rhode Island as well as cases from the Fifth Circuit, Vulcan Materials Co. v. City of Tehuacana and Sixth Circuit, Anderson v. Charter Township of Ypsilanti.
II. Ripeness[4]
A. The Basics
In Williamson County, a
developer received preliminary plat approval in 1973 for a cluster home
development from the planning commission.
The developer then conveyed open space easements to the county and began
putting in roads and utility lines.
Over the next few years, the commission reapproved the preliminary plans
on several occasions. In 1977, the
county changed the density provisions of its zoning ordinance and in 1979 it
advised the developer that its project was subject to the 1977 ordinance. The commission rejected revised plats
submitted in 1980 and 1981 for numerous reasons, some based on the new law and
some based on the old law. The
developer then brought suit in federal court.
The Court found the action unripe,
noting that a taking claim is premature until the "government entity charged
with implementing the regulation has reached a final decision."[5] This had not
occurred since the developer had not "sought variances that would have
allowed it to develop the property according to its proposed plat."[6] While the developer
contended that it had done everything possible to resolve the matter, the Court
was not convinced that a final decision had been obtained. The Court noted that the Board of Zoning
Appeals had the authority to grant variances dealing with five of the eight
objections, and that the commission itself had the power to grant variances to
solve the other objections.
A year after Williamson County, the Court decided MacDonald, Sommer & Frates v. Yolo County[7]. There, the
developer submitted a preliminary plan to subdivide its residentially zoned
land into 159 lots for single family and multi-family housing. After the planning commission rejected the
plan due to inadequacies in access, police protection, water and sewer
services, the developer filed suit asserting that its property was being
condemned to open space.
The Court found the action was not
ripe since the developer had not obtained a final decision as to what kind of
development would be allowed. The
developer failed to convince the Court that it had, with its one application,
done enough. "Unfair procedures, [or] futile [ones]" need not be
pursued, said the Court, but the "rejection of exceedingly grandiose
development plans does not logically imply that less ambitious plans will
receive similarly unfavorable reviews."[8]
Williamson
County and MacDonald require that
a challenger obtain a final decision on a meaningful application for
development to make an as-applied taking action ripe. Physical taking claims are not subject to the final decision
requirement since the physical invasion itself establishes what has been taken.[9] Likewise, a
property owner making a facial taking claim is not subject to the final
decision rule since, by definition, the mere enactment of the law, and not its
application, takes the property.[10]
The final decision requirement is
theoretically distinct from the requirement of exhaustion of administrative
remedies, but in practice the distinction blurs. The former addresses whether one must seek some confirmation by
the initial decisionmaker that a denial is final, and the latter addresses
whether one is obligated to climb the administrative ladder to seek review of
that final decision. For ripeness
purposes, resort to a board of adjustment, for example, is required if the
board possesses the power to waive or grant a variance from a regulation, but
is not required if the board has only the power to review the application of
the regulation. Williamson County provides an example. The Court said the property owner had to seek permission of both
the board of adjustment and the planning commission for variances because both
bodies had the power to relieve the property owner of the alleged hardships.[11] But, the Court said
the developer would not be required to appeal the planning commission's
rejection of the plat to the board of adjustment since the board had the power
only to review, not participate in, that decision.[12]
Identifying the initial
decisionmaker is troublesome, and case law instructs that it is a mistake to
view the term "initial decisionmaker" narrowly. The driving force
behind the rule is to give the governing body a "realistic opportunity and
reasonable time within which to review its zoning legislation vis-a-vis the
particular property."[13] Resort to the
legislative body may be necessary where the current zoning classification is
dated.[14] In seeking a final
decision, if a variance or other procedure exists that might permit the project
to proceed, it must be used unless applying would be futile.
When the MacDonald Court suggested that the denial of "exceedingly
grandiose" plans did not mean that "less ambitious plans" would
also be rejected, it created an obligation of reapplication in situations where
the initial application is not a realistic one. Determining when that obligation arises is a guessing game with
but few clues, only some of which are helpful.
The Court, for example, referred to the MacDonald project as an "intense type of residential
development," and intimated that the "`five Victorian mansions'"
sought in Agins v. City of Tiburon
and the nuclear power plant in San Diego
Gas & Electric Co. v. City of San Diego were of the grandiose variety.[15] The proposed
fifty-five story office tower atop Grand Central Station in the Penn Central case was also likely
"grandiose" in the ripeness sense, since the Court noted that the
landmark commission might approve a smaller tower.
In Suitum v. Tahoe Regional Planning Authority,[16] the Court addressed final decision ripeness in the context
of transferable development rights. In Suitum, the landowner had received a
final decision from the land use authority that she could not build on her
parcel, but she had not applied for transferable development rights that were
available. The Court held that she did
not need to do so. Leaving open the
question of whether TDRs might be taken into account in determining whether a
taking has occurred, their existence did not relate to the allowable uses of
the land of the claimant. Once that use
was established, the Court held the final decision ripeness requirement met.[17]
The reapplication process that McDonald contemplates creates a
dilemma. How many efforts are called
for? At some point the downsizing will render the project economically
unattractive, but if the developer gains approval of a lesser request, it
presumably waives any objection to losses based on the prior denials.
B. Palazzolo v. Rhode Island[18]
In the recent decision in Palazzolo v. Rhode Island,[19] the Court dealt with the futility exception. Anthony
Palazzolo acquired approximately 20 acres of land on the Rhode Island coast in
1959. Eighteen acres of the tract was
salt marsh and bordered a pond. Title was taken in the name of a corporation
that Palazzolo formed with others, but by 1960 Palazzolo was the sole shareholder.
The balance of roughly two acres was uplands. Palazzolo, through his
corporation, unsuccessfully sought permits to fill the wetlands portion in the
1960s. While the state had no regulations against filling wetlands, a dredge
permit was required. The state rejected
the first application for failure to provide the state with adequate
information, and, it rejected a second other for environmental reasons. In the 1970s, while Palazzolo made no
efforts at development, the state was busy enacting a coastal resources
management program that severely limited development of wetlands. In 1978,
Palazzolo’s corporation lost its charter for failure to pay state taxes, and
title to the land passed to Palazzolo.
Palazzolo’s next effort (but first
in his own name) to develop came in 1983 when he sought a permit to fill all 18
acres of wetlands. His application was denied. In 1985, he scaled down his
plans, asking to fill 11 acres to create a private beach club. Again, he was
denied permission. After an unsuccessful state court suit challenging the
propriety of the latter rejection on state administrative law grounds,
Palazzolo sued in state court claiming a taking under the Fifth Amendment,
seeking $3,150,000 in compensation. The state courts rejected Palazzolo’s
takings claim and he appealed to the Supreme Court.
As to ripeness, the state court,
applying Williamson County and McDonald, found the lawsuit was
premature since the extent of development allowed on Palazzolo’s property was
not known. Palazzolo had not, for
example, sought a permit for a less intensive development (say, filling only 5
acres). He also had not sought a permit to develop the uplands. Finally,
Palazzolo had not made specific application for permission to develop a 74 lot
subdivision, which was the basis of his claim for compensation.
The Supreme Court disagreed. Rhode
Island law was unequivocal, said Justice Kennedy: wetlands could not be filled.
State law did allow the coastal council to grant a “special exception” where
the proposed activity served a compelling public purpose. However, neither
residential use or the private beach club qualified for this exception. It was
true, the Court conceded, that where a landowner is denied approval of a
substantial, or “grandiose,” project, he must return to the permitting
authorities with a more modest proposal before his case is ripe. But that rule
did not apply to Palazzolo’s case; he had tried twice and failed. There was,
simply, nothing left for Palazzolo to ask of the state. Any further applications
would have been futile.
As to the failure to seek a permit
to build on the uplands, the Court noted that the state had conceded that “it
would be possible to build at least one single-family home” on the upland
portion.” The state argued that since it was possible to build “at least” one
home, other uses might be allowed. For the Court, however, there was no doubt.
The state was bound by its concession that the uplands might be developed with
one home and that, as such, the uplands had a value of $200,000.
There was no need for Palazzolo to
apply specifically for approval of a 74 lot subdivision even though that was
the basis of his compensation claim. The state worried that Palazzolo was
playing “hide the ball,” by seeking approval for relatively modest uses, only
to seek compensation for a much larger project. The council’s practice was to not consider proposals until the
applicant had satisfied all other state and local requirements. Here, that
would have meant zoning approval from the town and state approval of individual
sewage disposal systems. The Court said none of that mattered as far as
ripeness was concerned. As far as the coastal council was concerned, no fill
would be permitted for any purpose. Second, the state need not worry that Palazzolo
could claim damages based on the value of an intensive subdivision unless he
could show that the project would have been allowed under other existing,
legitimate land use restrictions.
C. Ripeness after Palazzolo
The ripeness requirement is considered
a curse by the development community, and some likely hoped that the Court
would seize upon Palazzolo to do away
with or significantly modify the rules in favor of challengers. That did not
happen. In fact, the Court reaffirmed Williamson
County and MacDonald. They seem
to be here to stay.
One aspect of the Court’s finding of
ripeness provides a modicum of hope to frustrated landowners’ and their lawyers
that the ripeness rules might be read in a more pro-landowner manner. The
record in Palazzolo contained
ambiguities as to what development permission the state might have granted
Palazzolo. In detailed examinations of the facts, Justice Kennedy for the
majority found that the landowner had done everything he should have done to ascertain what the state would permit him to do
with his land while Justice Ginsburg for the dissent found that the landowner had not done everything he could
have done to ascertain what the state would permit him to do with his land.
With a record that was unclear, the majority resolved the doubts in favor of
the landowner, while the dissent would have resolved them in favor of the
state.
This suggests that once the
landowner has made a reasonable application for development, the courts may put
the burden on the government to indicate possible development options. For
example, the majority observed that there was “no indication” by the state as
to whether a smaller area could be filled and that the state had not
“explain[ed] the reach” of the regulation.
Whether lower courts will notice this rather subtle message, if indeed
it is even that, and if they do recognize it, feel constrained to read the case
as moving the burden to the state remains to be seen. But, it is an argument
developers may now press.
The Court’s application of the
futility exception is not new,[20] but it is another wake up call to governments who place
themselves in a bind by enacting restrictions with little or no flexibility. If
there is simply, in the state’s mind, no way a certain type of land should ever
be developed in any fashion, the law should be firm and inflexible. Adoption of
such a law, however, makes it easier for a landowner to get the merits of her
takings claim heard since ripeness will be easy to establish. If it is conceivable that development might
be permitted on some land (i.e., if all wetlands are not the same), then
consideration should be given to allowing a meaningful variance or special
exception process to allow a landowner to ask whether her land qualifies for
the variance.
A classic example of how not to do
it is found in the South Carolina experience in the Lucas case, decided in 1992.[21] Lucas owned two beachfront lots on the Isle of Palms. The
state’s beachfront setback law, when applied to Lucas’ parcels, meant no
structure could be built on them. Lucas did not seek a variance from the state
because state law contained no variance process. The gist of the setback law was that nowhere on the coast of
South Carolina could the setback be relaxed.
Thus, there was no way the coastal council could look at a particular
lot or stretch of beach where the setback fell seaward of privately owned land
and conclude that building something might not be so bad. Thus, Lucas had a
ripe claim and won his case, since the effect of the setback was to deprive him
of any economically viable use of his land.
After buying Lucas’ lots, the state of South Carolina put the lots on
the market. It then sold them for less than it paid for them, permitting residential
development on them. One can imagine that had a variance process been available
at the outset, the landowner in Lucas
could have gotten a variance if, as seems to be the case with hindsight, the
council thought that erosion considerations would not be meaningfully advanced
by being applied to the lots.
Rhode lsland had a special exception
process but it was quite narrow. The only time permission to fill might be
granted was for a compelling public benefit, which was not the case with
Palazzolo’s proposals. This process is
much too narrow to be helpful in avoiding takings claims.
The Palazzolo opinion is an invitation to governments to build some
discretion into their inflexible processes. This can, and indeed must, be done
without reserving so much discretion that arbitrary decision making is allowed.
In addition to providing for some
degree of discretion in ruling on permit applications, governments might
explore the Court’s acknowledgment that states may require applicants to
exhaust state procedures and obtain permits from other state or local agencies
as conditions precedent to consideration of their application. For example, in
this case, the coastal council might have required Palazzolo to obtain local
zoning approval first. Sequencing requirements
may not, however, be unfair. Multiple agencies cannot all insist on being last.
State law should establish a priority system.
In sum Palazzolo’s
impact on ripeness is mixed. Perhaps a seed has been planted that might grow
into a burden shifting requirement where the regulator will be required to tell
a developer whose development application it has denied what the developer may
do. Even should that be the case, the Court’s reaffirmation of Williamson County and the suggestions
that states may develop their own exhaustion requirements are government
victories.
III. Forum Selection Under Williamson County and First English[22]
A. The Often Overlooked
Connection Between Williamson County
and First English
The second prong of Williamson County dealt with forum
selection. The landowner in that case sued in federal district court, without
having used the inverse condemnation process available in state court. Even assuming the restrictions were so
severe that they constituted a taking, the Court said the Constitution is not
violated unless compensation is not paid. Pursuit of such a remedy is required
where the state’s remedy is adequate.[23]
At the time of the Williamson County decision it was not
clear whether states had to provide a compensation remedy, but two years later,
in First English Evangelical Lutheran
Church v. County of Los Angeles,[24] the Court held that they did. Concluding that a mandatory
compensation remedy existed due to the self-executing nature of the Fifth
Amendment, First English, in effect,
deleted the qualifying “if” in Williamson
County’s holding that “if a state has an adequate process, compensation
must be sought from the state.” It was
no longer a choice. States had to grant such relief. While a few have disputed or not understood this, it is beyond
question. As the Court reconfirmed in City
of Monterey v. Del Monte Dunes at Monterey, Ltd., “when the government
condemns property for public use, it provides the landowner a forum for seeking
just compensation, as is required by the Constitution.”[25]
The combined rule of Williamson County/First English is that
a landowner with a takings claim has an action for compensation conferred
directly by the Constitution, and that action can and must be brought in state
court. When one adds to this the law of preclusion and other judicial
federalism doctrines such as the Rooker-Feldman
doctrine, the claim and issues that must be litigated in state court cannot be
attacked collaterally in a subsequent action in federal district court. With very few exceptions, if federal review
is to occur, it must come by way of direct review by the Supreme Court, as it
did in other recent takngs cases: First
English, Nollan, Lucas, Dolan, Palazzolo, Penn
Central, Loretto and Agins.[26]
The Williamson County/First English message is not well understood.
Too often the two cases are viewed separately. And, often, though usually in
dicta, the preclusive effects of Williamson
County/First English are overlooked. The Seventh Circuit, for example, has
vigorously enforced the Williamson
County/First English compensation requirement, yet, it still tells property
owners in gratuitous dicta as it sends them to state court, to come back if
they are unhappy with the result.[27] A moment’s reflection on preclusion should tell the court
that it ought not be so gracious. Such an invitation, perhaps understandable in
the immediate aftermath of Williamson
County, is no longer responsible with a substantial body of post-Williamson County/First English case law
holding that claim and issue preclusion bar relitigation.[28]
B. Nature of the Cause of Action: “claims for just
compensation are grounded in the Fifth Amendment”[29]
In exploring the procedural
consequences of Williamson County/First
English, an initial inquiry must be made into the nature of the cause of
action that is to be pursued in state court. Is it a right to compensation
arising under the Fifth Amendment? Or, is it one arising under state law? It
matters for at least two reasons. If the cause of action asserts a federal right,
then claim preclusion applies to an attempt to relitigate in federal court. If
the claim arises under state law, then the federal claim will not be litigated
in state court, and claim preclusion will not apply in federal court. Issue
preclusion will apply, but issue preclusion generally only bars matters
actually litigated, not matters that could have been litigated.[30] A second consequence that flows from the federal versus
state characterization is a potential affect on a federal court’s exercise of diversity,
supplemental and removal jurisdiction.
A number of courts have assumed, and
in some cases affirmatively decided,[31] that the cause of action to be pursued in state court is
state-law based. I think this is wrong.
This assumption often is reflected by unexamined comparisons between
“takings claims” and “inverse condemnation” claims as if the former represents
the Fifth Amendment claim and the latter represents a state law claim. There
is, however, no inherent difference between them. Inverse condemnation simply refers to the manner in which a
property owner seeks compensation for a taking. Thus, loose references to
landowners bringing “inverse condemnation actions” in state court do not,
standing alone, tell whether the source of the action is federal or state law.
When a landowner approaches the
state court to demand “just compensation” on the basis that the state has
“taken” property, it is the Fifth Amendment right that is being asserted. The
state controls the process, and may additionally provide its own substantive
protection, but the “just compensation” claim, as First English says, is “grounded in the Fifth Amendment.” Since the
Fifth Amendment is self-executing, reliance on state law is unnecessary.
Likewise, federal statutory support is not necessary to support a Fifth
Amendment takings claim. Other constitutional claims must be filed pursuant to
42 U.S.C. § 1983, or rely on the Court finding an implied direct cause of
action under the constitution. A takings claim, however, is given an express
cause of action. That is what self-executing means. Advantages to using § 1983
exist, such as the availability of attorney’s fees, but resort to § 1983 is not
necessary.
Palazzolo
v. Rhode Island[32] demonstrates this. After being denied development
permission, Palazzolo “filed an inverse condemnation action in Rhode Island
Superior Court asserting that the state’s wetland regulations . . . had taken
the property without compensation in violation of the Fifth and Fourteenth
Amendments.”[33] The state courts denied Palazzolo’s claims based on the
Fifth Amendment and the United States Supreme Court, as has been noted,
reversed on Fifth Amendment grounds. So much for the idea that one does not
pursue federal rights in state court.
C. Preclusive Consequences of
State Court Action
The takings claim is unique in two
respects, and this uniqueness produces a good news/bad news irony for the
property owner. The good news: it is the only constitutional right that is
awarded an express self-executing compensation remedy. The bad news: the final step to creating the
cause of action is a step litigating the cause of action. What makes some
uncomfortable about this is that the benefit of the mandatory compensation
remedy means that an unsuccessful assertion of the Fifth Amendment right to
compensation in state court precludes a federal district court from ever
hearing the claim. A state court’s refusal to find a taking might be wrong on
the merits, but the only test of that is by direct appeal.
If, as is usually the case, no
avoidance technique enables the property owner to avoid litigating the takings
claim in state court,[34] that ends the matter. Where the plaintiff, unhappy with
what the state court has done, seeks to obtain review by the federal district
court, she will find one of two bars: the Rooker-Feldman
doctrine, or, if that does not apply, claim or issue preclusion.
(1) Rooker-Feldman Doctrine
Federal district courts are barred
by the Rooker-Feldman doctrine[35] from “entertaining a proceeding to reverse or modify”[36] a state court judgment or from hearing issues “inextricably
intertwined”[37] with a state court decision. The sole avenue of relief
available to a party who has lost in state court and wishes review of a federal
question that was or could have been presented in state court is to appeal to
the Supreme Court of the United States. If that route is not taken, the state
court judgment stands.
While the doctrine lay dormant for
years, it has emerged in recent years as a popular defense, being used over 500
times by lower federal courts in the 1990s to dismiss cases for lack of
jurisdiction.[38] The basis of Rooker-Feldman
is 28 U.S.C. §1257, which vests appellate jurisdiction solely in the Supreme
Court.[39] The rationale is
that if a “federal challenge succeeds only to the extent that the state court
wrongly decided the issue, . . . [or] if the federal action would effectively
reverse the state court decision,”[40] the district court would be exercising appellate
review. As the Court said in Feldman, “this it may not do.”[41]
(a) Compared to Preclusion and
Abstention
Rooker-Feldman,
while similar to the preclusion doctrines in that it prevents relitigation, Rooker-Feldman exists for a reason
different from the preclusion doctrines. As Professor Sherry says, Ares
judicata is about parties; Rooker-Feldman
is about courts.[42] Preclusion rules
exist primarily to protect persons from being exposed to repetitious litigation
by those they have defeated in prior lawsuits. Rooker-Feldman protects the integrity of the state courts by
prohibiting federal district courts from intruding on state courts. While
preclusion rules limit all courts (within a state, between states, and between
state and federal systems) from second guessing prior court decisions, Rooker-Feldman only acts to curtail
federal district court jurisdiction.
Preclusion, under the full faith and credit statute, requires federal
courts to look to state law. Rooker-Feldman
is federal law.
Rooker-Feldman goes to the subject matter jurisdiction of the district
court and, thus, Amay be raised at any time by either party or sua sponte by
the court . . . [and] in that respect, it is quite unlike the affirmative
defenses of collateral estoppel or res judicata.@[43] The Rooker-Feldman determination of jurisdiction
based on federal law comes first;[44] and, if jurisdiction exists, res judicata or collateral
estoppel may follow as an affirmative defense.[45] What Rooker-Feldman
does not bar, preclusion doctrines may.[46]
Rooker-Feldman fills some of the gaps in preclusion. Professor Sherry
explores these gaps in detail in her article,[47] but, a short list includes the fact that preclusion does
not apply to pending suits, Rooker-Feldman
does. With preclusion issues, federal courts apply state law, and preclusion
rules vary among the states and are notoriously complex, with numerous exceptions. Rooker-Feldman is a rule of federal law, theoretically unvarying
among the federal courts, though still dependent on state law to some degee.[48]
A recent Sixth Circuit case, Anderson v. Charter Township of Ypsilanti,[49] actually speaks of Rooker-Feldman
abstention, but the doctrine does differ from abstention.[50] The most frequently invoked rule of abstention, for
example, Younger v. Harris,[51] requires that the state proceeding be pending and that the
matter involve important state interests. Neither requirement applies to Rooker-Feldman.
(b) Applications of Rooker-Feldman in Land Use Cases[52]
Rooker-Feldman
requires dismissal of a claim that is Ainextricably intertwined@ with a claim
already adjudicated in state court. The test is whether the relief requested in
the federal action, if granted, would effectively void the state judgment.[53] It applies to issues litigated and issues that could have
been litigated in state court.
Anderson
v. Charter Township of Ypsilanti,[54] exemplifies Rooker-Feldman=s
use in takings litigation.[55] Plaintiff was unsuccessful in obtaining a rezoning of land
from light industrial to multi-family use. Plaintiff sued in state court,
alleging a taking and a due process violation under the federal and state
constitutions. The township removed the case to federal court. That court
remanded the state law claims and stayed proceedings on the federal claims (a
takings claim and apparently substantive and procedural due process claims).
When the state court ruled against plaintiff on the merits of his takings
claim, the plaintiff filed a motion in federal court to lift the stay, and he
appealed to the state intermediate appellate court. While the state appeal was
still pending, the federal district dismissed the takings claims for lack of
subject matter jurisdiction on the basis Rooker-
Feldman.
The Sixth Circuit affirmed, finding
that the issues the district court would have been called upon to decide were Ainextricably
intertwined@ with the state court=s ruling. Examining the state courts’ various
rulings at the trial and appellate levels, the court concluded that Michigan
and federal takings law were essentially the same. While the state trial court
had limited its review to categorical takings doctrine, the state appellate
court had covered non-categorical takings law as well.[56] Thus, after a thorough discussion of the grounds of the
Michigan decisions, it was clear to the Sixth Circuit that consideration of a
Fifth Amendment claim by the district court would involve a prohibited review
of what the Michigan courts had done.
Another case is Hill v. Town of
Conway.[57] There the Second Circuit upheld the dismissal of a takings
claim on the basis of Rooker-Feldman.
The landowners had filed a subdivision plat that depicted a road. After the
project was built, the town maintained the road. Then, the town filed a
declaration of taking of the road with the state Board of Tax and Land Appeals.
The Board allowed the take but awarded no damages. The landowners filed two
state lawsuits. One challenged the propriety of the taking. The other sought a
reassessment of the damages. The landowners lost both cases. In the first case,
the court held that the filing of the plat constituted a voluntary dedication
of the road to the public and, alternatively, that the maintenance performed on
the road resulted in dedication. The state supreme court summarily affirmed the
trial court.
In the second case as to damages,
the trial court held that the plaintiffs were barred from relitigating the
issue of the first case, whether a dedication had occurred. The court then
found that damages were not due to one who dedicated a road. The state court
rejected landowners= reliance on Dolan v.
City of Tigard,[58] finding that dedication in Dolan was not voluntary.[59] The state supreme court refused review.
Rather than seeking United States
Supreme Court review of the state court judgment, landowners commenced suit in
federal district court seeking compensation for the taking of the road on the
basis of Dolan. Since the relief
requested in the federal action, if granted, would effectively void the state
judgment, the Second Circuit held that the district court was barred from
hearing the claim for compensation under the doctrine of Rooker-Feldman.[60]
Rooker-Feldman does not apply if the federal plaintiff lacked an
opportunity to raise the federal issue in state court. Thus, in Agripost, Inc.
v. Miami-Dade County,[61] the county revoked a waste disposal facility=s permit due
to neighbor complaints about the Avile stench@ and Ablack, thick glue-like mold@
that the plant emitted. The permit revocation was appealed to a three-judge
panel of the state circuit court, which affirmed based on findings that
Agripost had breached its permit conditions. The state court of appeal refused
review. Then Agripost filed a takings claim in federal court. The county sought
dismissal on the basis of Rooker-Feldman,
or in the alternative , on preclusion grounds. The district court rejected the
applicability of either, and on its own initiative, dismissed the case as
unripe since Agripost had not sought compensation from the state court.
The county appealed to the Eleventh
Circuit,[62] which affirmed the district court. Rooker-Feldman did not apply since the plaintiff could not have
raised the takings issue in the state circuit court, which, due to the
procedural posture in which the case came to it, lacked authority to decide
that issue. The state circuit court was only to decide the validity of the
permit revocation. While the state court decided the revocation was proper
under state law, it was still possible, noted the Eleventh Circuit, that the
revocation had rendered the plaintiff=s land worthless and might therefore be a
taking. But, that issue had not been before the state court. In Rooker-Feldman terms, the federal court
is barred from hearing a matter where its judgment would contradict a prior
state court ruling. Here, a finding of
no economic value would not be at odds with what the state court had found.
As the Eleventh Circuit opinion in Agripost indicates, if the takings issue
was not, or could not have been, litigated in state court, the takings claim
must still be dismissed by the federal court, but on Williamson County’s state compensation rule rather than Rooker- Feldman grounds. That, however,
does not mean that the landowner can return to federal court after the
litigation takes place in state court. At that point, a return to federal court
will be barred by either Rooker-Feldman
or preclusion.
(2) Res Judicata/Collateral
Estoppel (Claim and Issue Preclusion)
Once a property owner has completed
prong two, the law of res judicata will usually preclude a Fifth Amendment
claim from being pursued in federal court.[63] Adjudication of the claim in state court bars a subsequent
suit in federal court under the full faith and credit statute, 28 U.S.C. §
1738. Collateral attack of the state
court judgment is not available in federal district court. A property owner who is dissatisfied with
the results obtained from the state court is limited to appealing directly to
the United States Supreme Court.[64]
Most courts have addressed the issue
as one of claim preclusion, finding the state court’s adjudication of the
federal takings claim to bar relitigation.[65] If a court takes
the position like the Ninth Circuit in Dodd,
discussed below,[66] that the state claim must be litigated first in state
court, making the federal claim cognizable in district court, the property owner
will be limited by issue preclusion. Typically, the same issues that the
property owner asserts under the federal claim are the same as those asserted
under the state claim, in which case the bar is complete.
D. Possible Exceptions Allowing a Suit in
Federal District Court
There are several possible
exceptions to consider for the plaintiff who would prefer to be in federal
court. I stress these are possible
options; they may never, and at best will rarely, work.
(1)
Sue in federal court, claiming resort to the state courts would be futile.
(2)
Sue in state court and give notice to the state court of an intent to reserve
the right to go to federal court at the end of the state litigation.
(3)
Where there is diverse citizenship, a federal district court may hear a state
takings claim and perhaps a federal one as well.
(4)
For the property owner who has another claim over which a federal district
court has jurisdiction, sue on that claim and append a state takings claim,
asking the court to exercise supplemental jurisdiction over the latter.
(5)
As a variant of number four, append the otherwise incomplete federal takings
claim to the other federal claim.
(6)
Finally, and not of the plaintiff’s choosing but perhaps to her liking, the plaintiff
who begins as she should in state court may wind up in federal court by virtue
of government removal.
(1) Futility of Using State Court
The burden is on the property owner
to establish the inadequacy of the state's compensation remedy, and it is a
difficult burden to carry.[67] Uncertainty, for
example, does not equal inadequacy.[68] Also, if the property owner allows the state statute of
limitations to run, she forfeits any right to seek compensation in federal
court.[69] If the property owner's state action is dismissed with
leave to amend, and the property owner fails to amend, no federal suit will
lie.[70]
There are cases where the state
remedy is inadequate, but they are few. In Neumont v. Monroe County,[71] the federal court found the state’s obstruction of
plaintiff’s pursuit of relief in state court to render the state compensation
requirement futile. The county allegedly made changes to the ordinance and
agreed not to enforce the ordinance to moot the state suit.
In rare instances, prong two futility can be established by proving that the state courts have rejected takings claims that are on all fours with the challenger's case. Since takings claims are usually highly ad hoc affairs, this will not often occur,[72] but it does happen. In Naegele Outdoor Advertising, Inc. v. City of Durham,[73] a challenge to a five- and-one-half year billboard amortization ordinance was deemed ripe in federal court without pursuit of a suit in state court since the North Carolina state courts had, on several occasions, upheld the same type of amortization ordinance.[74] The federal court concluded that a five and one half year sign amortization provision would not be viewed as a taking by the North Carolina courts and that it would be pointless to ask the state court for relief. The Ninth Circuit has made a similar finding with respect to certain rent control statutes as they have been construed in California state courts.[75]