Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-5_14-cv-00184/USCOURTS-alnd-5_14-cv-00184-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

M & N MATERIALS, INC.,

Plaintiff,

vs.

T O W N O F G U R L E Y ,

ALABAMA, et al., 

Defendants.

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Civil Action No. CV-14-S-184-NE

MEMORANDUM OPINION AND ORDER

Plaintiff, M & N Materials, Inc. (“M & N”) filed this case on January 31, 2014,

asserting claims for unconstitutional taking, arbitrary and capricious due process

denial, declaratory judgments under both federal and state law, and an injunction

against the following defendants: (1) the Town of Gurley, Alabama (“the Town” or

“Gurley”); (2) Vulcan Construction Materials, L.P.; (3) Vulcan Lands, Inc.; and (4)

Vulcan Materials Company, Inc. The case presently is before the court on the

1

Town’s motion to dismiss plaintiff’s claim for an unconstitutional taking (Count I).2

Upon consideration of the motion, plaintiff’s response, and the Town’s reply, the

3 4

 Doc. no. 1 (Complaint). The last three defendants were added “to comply with Alabama 1

law governing declaratory judgment actions.” Id. ¶¶ 5-7.

 Doc. no. 12. 2

 Doc. no. 17. 3

 Doc. no. 19. 4

FILED

 2014 Jun-10 PM 03:17

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 1 of 14
court concludes the motion is due to be denied. 

I. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a

complaint for, among other reasons, “failure to state a claim upon which relief can be

granted.” Fed. R. Civ. P. 12(b)(6). This rule must be read together with Rule 8(a),

which requires that a pleading contain only a “short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that

pleading standard does not require “detailed factual allegations,” Bell Atlantic Corp.

v. Twombly, 550 U.S. 544, 550 (2007), it does demand “more than an unadorned,

the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009) (citations omitted). As the Supreme Court stated in Iqbal:

A pleading that offers “labels and conclusions” or “a formulaic

recitation of the elements of a cause of action will not do.” [Twombly,

550 U.S., at 555]. Nor does a complaint suffice if it tenders “naked

assertion[s]” devoid of “further factual enhancement.” Id., at 557. 

To survive a motion to dismiss founded upon Federal Rule of

Civil Procedure 12(b)(6), [for failure to state a claim upon which relief

can be granted], a complaint must contain sufficient factual matter,

accepted as true, to “state a claim for relief that is plausible on its face.” 

Id., at 570. A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged. Id., at 556. The

plausibility standard is not akin to a “probability requirement,” but it

asks for more than a sheer possibility that a defendant has acted

unlawfully. Ibid. Where a complaint pleads facts that are “merely

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 2 of 14
consistent with” a defendant’s liability, it “stops short of the line

between possibility and plausibility of ‘entitlement to relief.’” Id., at

557 (brackets omitted). 

Two working principles underlie our decision in Twombly. First,

the tenet that a court must accept as true all of the allegations contained

in a complaint is inapplicable to legal conclusions. Threadbare recitals

of the elements of a cause of action, supported by mere conclusory

statements, do not suffice. Id., at 555 (Although for the purposes of a

motion to dismiss we must take all of the factual allegations in the

complaint astrue, we “are not bound to accept astrue a legal conclusion

couched as a factual allegation” (internal quotation marks omitted)). 

Rule 8 marks a notable and generous departure fromthe hyper-technical,

code-pleading regime of a prior era, but it does not unlock the doors of

discovery for a plaintiff armed with nothing more than conclusions. 

Second, only a complaint that states a plausible claim for relief survives

a motion to dismiss. Id., at 556. Determining whether a complaint

states a plausible claim for relief will, asthe Court of Appeals observed,

be a context-specific task that requires the reviewing court to draw on

its judicial experience and common sense. 490 F.3d, at 157-158. But

where the well-pleaded facts do not permit the court to infer more than

the mere possibility of misconduct, the complaint has alleged — but it

has not “show[n]” — “that the pleader is entitled to relief.” Fed. Rule

Civ. Proc. 8(a)(2). 

In keeping with these principles a court considering a motion to

dismiss can choose to begin by identifying pleadings that, because they

are no more than conclusions, are not entitled to the assumption of truth. 

While legal conclusions can provide the framework of a complaint, they

must be supported by factual allegations. When there are well-pleaded

factual allegations, a court should assume their veracity and then

determine whether they plausibly give rise to an entitlement to relief. 

Iqbal, 556 U.S. at 678-79 (emphasis added). 

II. RELEVANT ALLEGATIONS OF PLAINTIFF’S COMPLAINT

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M & N wasformed in 2003 by Brian McCord and Brian Nelson for the purpose

of owning and operating a rock quarry. The land M & N was planning to use for the

quarry was a 160-acre parcel already owned by Nelson and located outside the Gurley

town limits. M & N purchased the land from Nelson and obtained permits from the

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Alabama Department of Environmental Management (“ADEM”) to operate a quarry

on the land. It also obtained business licenses from Madison County and the State

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of Alabama. As the property waslocated outside the Gurley town limits, M & N was 7

not originally required to obtain a license or permit from the Town.

Sometime in 2003, some of Gurley’s residents began to oppose the opening of

the quarry. The residents proposed that the Town annex the propertyM & N intended

to use for the quarry, so that the Town could then regulate the quarry’s operation.8

The Town initially declined to annex the land, but the issue was put to a vote on April

13, 2004, and as a result of that vote, M & N’s property was involuntarily

incorporated into the Town of Gurley. 

9

M & N applied for a business license from the Town, but the Town Clerk’s

office informed M & N that it had “‘been instructed not to issue a businesslicense for

 Complaint ¶ 8. 5

Id. ¶¶ 9-10. 6

Id. ¶ 11. 7

Id. ¶ 12. 8

Id. ¶¶ 12-13. 9

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 4 of 14
M & N.’” Less than two weeks later, “the Town imposed a moratorium, specific to 10

the M & N property only, on accepting any application for a permit, license, zoning

request, or any similar request that could be made by M & N to the Gurley

government.” Additionally, in July of 2004, the Town created a Board of 11

Adjustment for the purpose of hearing applications for variances from zoning

decisions. Six ofthe eight members ofthe newly-createdBoard of Adjustment were 12

individuals known to be against the development of the quarry. Citizens who had

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made public statements against the quarry also were elected to the offices of Mayor

and City Council. The newly elected Town government reassigned the

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responsibility for processing business licenses to an individual who was known to be

against the quarry. The newly elected Mayor appointed to the Town’s Planning 15

Commission five new members who were opposed to the quarry. The Planning 16

Commission subsequently recommended that the property M & N intended for the

quarry be re-zoned for agricultural use, and that recommendation was adopted by the

Id. ¶¶ 14-15. 10

 Complaint ¶ 16. 11

Id. ¶¶ 17-18. 12

Id. ¶ 19. 13

Id. ¶ 20. 14

Id. ¶ 21. 15

Id. ¶ 22. 16

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 5 of 14
City Council.

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After M & N received its ADEM permits and State and County licenses, but

before the Town annexed M & N’s property, defendant Vulcan Materials Company

(“Vulcan Materials”) and certain of its subsidiaries became aware of M & N’s intent

to open the quarry. Additionally, prior to the annexation, Vulcan Construction

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Materials, LP (“Vulcan Construction”) paid M & N for the right to explore the

property for mineral deposits and other characteristics of potential value, so it could

determine if it wanted to purchase the property from M & N. After conductig that 19

exploration, Vulcan Construction obtained an option to purchase the property from

M & N for an amount that apparently was specified in the parties’ agreement, but is

not specified in plaintiff’s complaint. After the new Mayor, City Council, and

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Planning Commission were elected, and after the new Board of Adjustment was

created, Vulcan Construction “substantially reduced” the purchase price it was

willing to pay M & N due to what it referred to as “‘this Gurley situation.’” The 21

complaint does not specify how much Vulcan Construction’s new offer was, or how

much it was reduced from the original purchase price. Vulcan Construction also

 Complaint ¶ 23. 17

Id. ¶ 24. 18

Id. ¶ 25. 19

Id. ¶ 26. 20

Id. ¶ 27. 21

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 6 of 14
offered a Royalty Agreement to M & N, but because the quarry has never been

allowed to operate on the property, Vulcan Construction has not paid M & N any

money under the Royalty Agreement.22

M & N felt that it was “[o]ut of viable options, facing a town that was prepared

to do anything necessary to stop its lawful business, and still owing money on

promissory notes for the quarry land.” Consequently, it “had no reasonable

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alternative other than to accept an offer to purchase from Vulcan[ Construction]’s

affiliate, Vulcan Lands, at an amount far less than the amount Vulcan [Construction]

agreed to pay prior to ‘the Gurley situation.’” 

24

After Vulcan Lands purchased the property from M & N, it applied for a

business license from the Town, but the application was denied. M & N retained

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a royalty interest in the property, but it has never received any royalty paymentsfrom

Vulcan Lands, orfromany other Vulcan entity, because Vulcan Lands has never been

permitted to operate a quarry on the property it purchased from M & N. Even so,

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the Town has permitted certain Vulcan entities to open and operate a quarry on

another parcel of land that is contiguous to the land Vulcan Lands purchased from M

Id. ¶ 28. 22

 Complaint ¶ 29 (alteration supplied). 23

Id. (alterations supplied). 24

Id. ¶ 30. 25

Id. ¶¶ 30, 32. 26

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 7 of 14
& N. The Town has never compensated, or offered to compensate, M & N for

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“annexing the property into Gurley or regulating its lawful business out of

existence.”28

Even though the complaint in this case does not specify how much the purchase

price of M & N’s land decreased after various members of the Gurley local

government took actions to ensure that the quarry could not open, an opinion of the

Alabama Supreme Court in a state law inverse condemnation suit M & N brought

against the Town sheds some light on that matter. In addressing a petition, filed by

the Town and its Mayor, for a writ of mandamus directing the trial court to grant their

motions for summary judgment on M & N’s claims against them, the Alabama

Supreme Court stated that Vulcan Lands originally acquired an option to purchase the

property from M & N for $3.75 million on July 12, 2004, but that it never exercised

that option because M & N could not obtain a business license from the Town. Ex

parte Simpson, 36 So.3d 15, 20 (Ala. 2009). “Nevertheless, on November 23, 2004,

M & N sold the property to Vulcan Lands.” Id. “According to M & N, the

consideration for the sale of the property was actually $1 million, plus the royalty

Id. ¶ 32. 27

Id. ¶ 31. 28

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 8 of 14
payments and obligations due under the agreement.” Id. at 21.

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III. DISCUSSION

M & N’s unconstitutional taking claim is asserted under the Fifth Amendment

to the United States Constitution, made applicable to the various states through the

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Fourteenth Amendment. The United States Supreme Court defined the contours of 31

a Fifth Amendment taking claim in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528

It is permissible for the court to consider the facts set forth in the Alabama Supreme 29

Court’s opinion without converting the Town’s motion to dismiss into a motion for summary

judgment. See Fed. R. Civ. P. 12(d) (“If, on a motion under Rule 12(b)(6) or 12(c), matters outside

the pleadings are presented to and not excluded by the court, the motion must be treated as one for

summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all

the material that is pertinent to the motion.”). Documents from prior judicial proceedings can be

considered without converting a motion to dismiss into one for summary judgment, because such

documents are “public records that [are] ‘not subject to reasonable dispute’ because they [are]

‘capable of accurate and ready determination by resort to sources whose accuracy could not

reasonably be questioned.’” Horne v. Potter, 392 F. App’x 800, 802 (11th Cir. 2010) (quoting Fed.

R. Evid. 201(b); other citations omitted) (alterations supplied). 

 The Fifth Amendment to the United States Constitution provides that: 30

No person shall be held to answer for a capital, or otherwise infamous crime,

unless on a presentment or indictment of a Grant Jury, except in cases arising in the

land or naval forces, or in the Militia, when in actual service in time of War or public

danger; nor shall any person be subject for the same offence to be twice put in

jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness

against himself, nor be deprived of life, liberty, or property, without due process of

law; nor shall private property be taken for public use, without just compensation.

U.S. Const., amend. V (1791) (emphasis supplied to the “taking clause”). 

 The “taking clause” of the Fifth Amendment has long been held applicable to the states. 31

The Supreme Court said in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978),

that “of course” the taking clause “is made applicable to the States through the Fourteenth

Amendment.” Id. at 122 (citing Chicago, Burlington & Quincy Railroad Co. v. Chicago, 166 U.S.

226, 238-39 (1897)). 

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(2005). The following quote from that opinion is lengthy, but a comprehensive

understanding of the text is necessary because the parties dispute the proper scope of

a takings claim. The Supreme Court’s opinion in Lingle said that:

The Takings Clause of the Fifth Amendment, made applicable to

the States through the Fourteenth, see Chicago, B. & Q. R. Co. v.

Chicago, 166 U.S. 226, 17 S. Ct. 581, 41 L. Ed. 979 (1897), provides

that private property shall not “be taken for public use, without just

compensation.” As its text makes plain, the Takings Clause “does not

prohibit the taking of private property, but instead places a condition on

the exercise of that power.” First English Evangelical Lutheran Church

of Glendale v. County of Los Angeles, 482 U.S. 304, 314, 107 S. Ct.

2378, 96 L. Ed.2d 250 (1987). In other words, it “is designed not to

limit the governmental interference with property rights per se, but

rather to secure compensation in the event of otherwise proper

interference amounting to a taking.” Id., at 315, 107 S. Ct. 2378

(emphasis in original). While scholars have offered various

justifications for this regime, we have emphasized its role in “bar[ring]

Government from forcing some people alone to bear public burdens

which, in all fairness and justice, should be borne by the public as a

whole.” Armstrong v. United States, 364 U.S. 40, 49, 80 S. Ct. 1563, 4

L. Ed. 2d 1554 (1960); see also Monongahela Nav. Co. v. United States,

148 U.S. 312, 325, 13 S. Ct. 622, 37 L. Ed. 463 (1893).

The paradigmatic taking requiring just compensation is a direct

government appropriation or physical invasion of private property. See,

e.g., United States v. Pewee Coal Co., 341 U.S. 114, 71 S. Ct. 670, 95

L. Ed. 809 (1951) (Government’s seizure and operation of a coal mine

to prevent a national strike of coal miners effected a taking); United

States v. General Motors Corp., 323 U.S. 373, 65 S. Ct. 357, 89 L. Ed.

311 (1945) (Government’s occupation of private warehouse effected a

taking). Indeed, until the Court’s watershed decision in Pennsylvania

Coal Co. v. Mahon, 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922),

“it was generally thought that the Takings Clause reached only a ‘direct

appropriation’ of property, or the functional equivalent of a ‘practical

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ouster of [the owner’s] possession.’” Lucas v. South Carolina Coastal

Council, 505 U.S. 1003, 1014, 112 S. Ct. 2886, 120 L. Ed. 2d 798

(1992) (citations omitted and emphasis added; brackets in original);see

also id., at 1028, n. 15, 112 S. Ct. 2886 (“[E]arly constitutional theorists

did not believe the Takings Clause embraced regulations of property at

all”).

Beginning with Mahon, however, the Court recognized that

government regulation of private property may, in some instances, be so

onerous that its effect is tantamount to a direct appropriation or ouster

— and that such “regulatory takings” may be compensable under the

Fifth Amendment. In Justice Holmes’ storied but cryptic formulation,

“while property may be regulated to a certain extent, if regulation goes

too far it will be recognized as a taking.” 260 U.S., at 415, 43 S. Ct. 158.

The rub, of course, has been — and remains — how to discern how far

is “too far.” In answering that question, we must remain cognizant that

“government regulation — by definition — involves the adjustment of

rights for the public good,” Andrus v. Allard, 444 U.S. 51, 65, 100 S. Ct.

318, 62 L. Ed. 2d 210 (1979), and that “Government hardly could go on

if to some extent values incident to property could not be diminished

without paying for every such change in the general law,” Mahon,

supra, at 413, 43 S. Ct. 158.

Our precedents stake out two categories of regulatory action that

generally will be deemed per se takings for Fifth Amendment purposes.

First, where government requires an owner to suffer a permanent

physical invasion of her property — however minor — it must provide

just compensation. See Loretto v. Teleprompter ManhattanCATV Corp.,

458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868 (1982) (state law

requiring landlords to permit cable companies to install cable facilities

in apartment buildings effected a taking). A second categorical rule

applies to regulations that completely deprive an owner of “all

economically beneficial us[e]” of her property. Lucas, 505 U.S., at

1019, 112 S. Ct. 2886 (emphasis in original). We held in Lucas that the

government must pay just compensation for such “total regulatory

takings,” except to the extent that “background principles of nuisance

and property law” independently restrict the owner’s intended use of the

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property. Id., at 1026-1032, 112 S. Ct. 2886.

Outside these two relatively narrow categories (and the special

context of land-use exactions discussed below, see infra, at 2086-2087),

regulatory takings challenges are governed by the standards set forth in

Penn Central Transp. Co. v. New York City, 438 U.S. 104, 98 S. Ct.

2646, 57 L. Ed. 2d 631 (1978). The Court in Penn Central

acknowledged that it had hitherto been “unable to develop any ‘set

formula’” for evaluating regulatory takings claims, but identified

“several factors that have particular significance.” Id., at 124, 98 S. Ct.

2646. Primary among those factors are “[t]he economic impact of the

regulation on the claimant and, particularly, the extent to which the

regulation has interfered with distinct investment-backed expectations.”

Ibid. In addition, the “character of the governmental action” — for

instance whether it amounts to a physical invasion or instead merely

affects property interests through “some public program adjusting the

benefits and burdens of economic life to promote the common good” —

may be relevant in discerning whether a taking has occurred. Ibid. The

Penn Central factors — though each has given rise to vexing subsidiary

questions — have served as the principal guidelines for resolving

regulatory takings claims that do not fall within the physical takings or

Lucas rules. See, e.g., Palazzolo v. Rhode Island, 533 U.S. 606,

617-618, 121 S. Ct. 2448, 150 L. Ed. 2d 592 (2001); id., at 632-634, 121

S. Ct. 2448 (O’CONNOR, J., concurring).

Lingle, 544 U.S. at 536-39 (alterations and emphasis in original). 

It is undisputed that M & N’s claim isfor a “regulatory taking,” not a “physical

taking.” The parties disagree, however, about the scope of the regulatory taking

claim. The Town argues that the claim must be dismissed because M & N failed to

“plausibly allege” that the Town’s actions have deprived M & N of all beneficial use

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Case 5:14-cv-00184-CLS Document 23 Filed 06/10/14 Page 12 of 14
of its property, thus rendering the property worthless. It is true that no such

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allegations appear in M & N’s complaint; indeed, judicially noticeable documents

from a related state court case indicate that, even after all of the Town’s regulatory

impediments were implemented, M & N still was able to sell its property for $1

million, and it retained a right to royalty payments. Thus, it cannot be reasonably

deduced from any of the allegations of M & N’s complaint that M & N was deprived

of all economically beneficial or productive use of its property, or that the property

was rendered essentially worthless. See Agripost, Inc. v. Miami-Dade County, 195

F.3d 1225, 1231 (11th Cir. 1999); Serpenfoot v. Rome City Commission, 322 F.

App’x 801, 805 (11th Cir. 2009). 

That would be the end of the matter, if demonstrating the loss of all

economically beneficial use of property were the only way to demonstrate an

unconstitutional regulatory taking. It is not. As the Lingle opinion makes clear, loss

of all economically beneficial use is but one type of a per se (or, as the Town calls it,

a “categorical”) regulatory taking claim. Another way of supporting a regulatory

taking claim is by evaluating the factors set forth in the Supreme Court’s Penn

Central opinion: i.e., the economic impact of the regulation on plaintiff; the extent

Doc. no. 13 (“Brief of Town of Gurley, Alabama in Support of Motion to Dismiss Federal

32

Takings Claim”), at 7. 

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to which the regulation has interfered with distinct investment-backed expectations;

and, the character of the governmental action. See Penn Central, 438 U.S. at 124. 

While the factual allegations of plaintiff’s complaint could certainly bemore detailed,

they are not inconsistent with a Penn Central regulatory takings claim.

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IV. CONCLUSION AND ORDER

For all of the foregoing reasons, the Town of Gurley’s motion to dismiss

plaintiff’s unconstitutional takings claim (Count One ) is DENIED. 

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DONE and ORDERED this 10th day of June, 2014. 

______________________________

United States District Judge

The court disagrees with the Town’s argument that demonstrating the loss of all 33

economicallybeneficial use of the propertyis a “fundamental requirement[] of any regulatorytakings

claim. Doc. no. 19 (“Reply of Town of Gurley, Alabama in Support of Motion to Dismiss Federal

Takings Claim”), at 1-2. The Eleventh Circuit admittedly framed the analysis in Serpenfoot and

Agripost in terms that, when read alone, seem to support the Town’s argument. See Serpenfoot, 322

F. App’x at 805-06 (“In order to state a claim for a regulatory taking, a plaintiff must allege . . . that

the government action denied her ‘all economically beneficial or productive use of [her] property.’”)

(quoting Agripost, 195 F.3d at 1231) (alteration in original, ellipses supplied); Agripost, 195 F.3d

at 1231 (“First, the property owner must allege that the governmental action . . . has ‘denie[d] all

economically beneficial or productive use of’ his property. . . . . In other words, the governmental

action must have made the property worthless.”) (quoting Lucas, 505 U.S. at 1015). However, the

Agripost decision predates the Supreme Court’s 2005 opinion in Lingle, and the Serpenfoot decision

is unpublished and, therefore, only persuasive authority. Lingle makes it clear that a plaintiff can

support a regulatory takings without alleging that its property has been rendered valueless. 

The Town already filed an answer and amended answer to plaintiff’s complaint, denying 34

the allegations of Count One. See doc. no. 14 (Answer by Town of Gurley); doc. no. 20 (Amended

Answer by Town of Gurley). 

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