The Honorable John F. Nangle, United States District Judge *

for the Eastern District of Missouri, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

_____________

No. 96-2886EA

_____________

Charles McKenzie; Ronald *

McKenzie; Mark McKenzie, doing *

business as McKenzie *

Development Company, *

*

Appellants, * Appeal from the United States

* District Court for the Eastern

v. * District of Arkansas.

*

City of White Hall; White Hall * 

Planning Commission, Phillip *

Williams, Individually and in *

his official capacity, *

*

Appellees. *

_____________

 Submitted: March 12, 1997

 Filed: April 23, 1997

_____________

Before FAGG and HEANEY, Circuit Judges, and NANGLE, District *

Judge.

_____________

FAGG, Circuit Judge.

After several years of zoning struggles, Charles, Ronald, and

Mark McKenzie, owners and developers of a residential subdivision

in the City of White Hall, Arkansas, brought this 42 U.S.C. § 1983

action against the City, its Planning Commission, and the Planning

Commissioner (collectively the City), alleging the City violated

the McKenzies’ Fifth and Fourteenth Amendment rights. The City 
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moved to dismiss for lack of jurisdiction and failure to state a

claim under § 1983, but the district court denied the motion. The

case proceeded to trial, and near the end, the district court

unexpectedly expressed concern about jurisdiction. Nevertheless,

the court submitted the case to the jury. The jury found in favor

of the McKenzies and awarded $195,790 in compensatory damages and

$30,000 in punitive damages. Three weeks after entering judgment

on the general verdict, the court vacated the judgment and

dismissed the case sua sponte for lack of subject matter

jurisdiction, without giving any explanation. The district court

denied pending motions, including the City’s motion for judgment as

a matter of law, as moot. The McKenzies appeal the dismissal for

lack of jurisdiction. We affirm in part, reverse in part, and

remand for further proceedings.

In 1971, land owned by the McKenzies was platted into a

subdivision of fourteen one-acre lots along both sides of a public

roadway named Michealann Drive. At the north end of the

subdivision, Michealann Drive ended in a cul-de-sac. Because the

land to the north was undeveloped and the subdivision was

residential, the McKenzies retained a rectangular shaped parcel

measuring ten feet by fifty feet as a privacy buffer. The City

annexed the subdivision in 1977. Eight years later, one of the

lots in the subdivision owned by the Federal Aviation

Administration was offered for sale. As former owners, the

McKenzies had an option to repurchase the lot, but declined because

the City expressed its desire to purchase the land for erection of

a new water tower. After the City purchased the lot, however, the

City did not use the property in a manner consistent with the

subdivision’s zoning for single family residences. Instead, the

City used the lot as a dumping and storage ground for unsightly and

dangerous materials.
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When the McKenzies protested the misuse of the lot in 1988,

the City responded by demanding access across the privacy buffer at

the north end of Michealann Drive. Because there was no public

need, the McKenzies refused. In 1989, the McKenzies decided to

revise their plan for the subdivision and divide six of the

remaining lots into nine. The City, acting through the Planning

Commission, allowed the McKenzies to subdivide two lots into three,

but took no action on the other four remaining lots. During the

planning of sewer improvements, the City’s consulting engineer

advised the McKenzies that the City expected the McKenzies to

surrender title to the privacy buffer. The McKenzies refused, and

the City withheld approval of redivision of the four lots. In May

1992, the McKenzies met with the City’s mayor, who suggested the

McKenzies should surrender the privacy buffer to induce the city

council to clean up the City’s lot. 

In October 1992, the McKenzies again asked for permission to

redivide the four remaining lots into six, but the City told the

McKenzies to delete the privacy buffer and resubmit their plans.

By January 1993, the McKenzies had planned, built, and sold two

houses, but eight other planned homes were not started because the

City withheld approval of the redivision and building permits

pending the McKenzies’ surrender of the privacy buffer. The

McKenzies continued to refuse to give up the privacy buffer, and

the City continued to deny the McKenzies’ zoning requests. In July

1994, the City said no building permits would be issued for the

McKenzies’ lots until they agreed to surrender the privacy buffer.

The next month, the Planning Commission sent the McKenzies a letter

stating, “[T]he commission [will] only approve your resubdivision

if you dedicate the [privacy buffer]” as use for a public street at

a later date. The McKenzies offered the City an option to buy the

privacy buffer if residential development occurred north of the 
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land, but the City was not interested in paying for the land.

Because the McKenzies needed approval of their zoning and building

requests to avoid financial ruin, and only wanted to insure

complementary development north of the subdivision, the McKenzies

gave the City an easement in the privacy buffer contingent on such

development. Only after obtaining the conditional easement did the

City grant the McKenzies’ zoning requests and building permits.

In their § 1983 lawsuit, the McKenzies raise a variety of

claims based on the City’s demand that the McKenzies surrender the

buffer in exchange for approval of zoning and building requests and

correction of the City lot’s misuse. Generally, the McKenzies

allege the City acted under color of state law to deprive them of

their property rights, due process, and equal protection. More

specifically, the McKenzies allege the City took their privacy

buffer without just compensation, and the City’s misuse of its lot

was a nuisance that amounted to an unconstitutional taking of the

McKenzies’ surrounding subdivision property. Further, the

McKenzies allege the City withheld building permits without a

legitimate reason, and arbitrarily and capriciously withheld

approval of the resubdivision. The McKenzies assert the City has

not taken similar actions against other similarly situated

individuals. In addition to compensation for the taken property,

the McKenzies sought redress for decreased subdivision property

values, lost profits, other damage to their business, punitive

damages, and declaratory and injunctive relief. 

On appeal, the McKenzies contend the district court had

jurisdiction to consider their claims. Because the district court

made no findings about any disputed jurisdictional facts and none

are disputed by the parties, we review the jurisdictional issue de
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novo. See Osborn v. United States, 918 F.2d 724, 730 (8th Cir.

1990). 

At the outset, we note the cases mentioned by the district

court when questioning jurisdiction during trial, Anderson v.

Douglas County, 4 F.3d 574 (8th Cir. 1993), and Chesterfield Dev.

Corp. v. City of Chesterfield, 963 F.2d 1102 (8th Cir. 1992),

involved the failure to state § 1983 claims, not subject matter

jurisdiction. “[T]he failure to present an adequate § 1983 claim

does not strip the court of jurisdiction unless the claim is

clearly immaterial, frivolous, and wholly insubstantial.” Daigle

v. Opelousas Health Care, Inc., 774 F.2d 1344, 1347 (5th Cir. 1985)

(footnote omitted). Jurisdiction is based on the complaint’s

allegations. See id. at 1348. If the McKenzies’ complaint stated

a claim on its face, it alleged a valid § 1983 action and

successfully invoked the district court’s jurisdiction. See id. at

1347.

In their complaint, the McKenzies state a colorable takings

claim by alleging the City conditioned approval of zoning and

building permits on surrender of the privacy buffer without

legitimate public concerns related to the requests. See Goss v.

City of Little Rock, 90 F.3d 306, 309-10 (8th Cir. 1996); W.J.

Jones Ins. Trust v. City of Fort Smith, 731 F. Supp. 912, 913 (W.D.

Ark. 1990). The McKenzies also state a colorable claim that the

City’s misuse of its lot was a nuisance amounting to a taking of

subdivision property other than the privacy buffer. See National

By-Products, Inc. v. City of Little Rock, 916 S.W.2d 745, 747-48

(Ark. 1996). Takings claims are cognizable under § 1983. See Lake

Country Estates, Inc. v. Tahoe Reg. Planning Agency, 440 U.S. 391,

398-400 (1979). The McKenzies allegations also encompass due

process and equal protection claims actionable under § 1983. See
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Executive 100, Inc. v. Martin County, 922 F.2d 1536, 1538, 1540-41

(11th Cir. 1991). The district court would have jurisdiction of

the McKenzies’ claims under 28 U.S.C. § 1343(a)(3). See Lynch v.

Household Fin. Corp., 405 U.S. 538, 544 n.7 (1972).

The City contends the McKenzies’ claims are not ripe, however.

To show their claims are ready for federal review, the McKenzies

must first show there is a sufficiently concrete case or

controversy within the meaning of Article III of the Constitution.

See Bob’s Home Serv., Inc. v. Warren County, 755 F.2d 625, 627 (8th

Cir. 1985). The City contends there is no presently justiciable

case or controversy because no taking of the privacy buffer has

occurred yet. Although the circumstances that trigger the easement

have not happened, the City’s established interest in the

McKenzies’ property implies an immediate injury: a reduction in the

value of the McKenzies’ land. See id. The conditional easement

eliminates or reduces the expectancy that potential purchasers can

develop the land, and possess and control it in perpetuity. See

id.; Hall v. City of Santa Barbara, 833 F.2d 1270, 1276 (9th Cir.

1986). Even if this cloud does not amount to a “taking” within the

meaning of the Fifth Amendment, an issue we need not decide, the

diminution in value, although small, is a concrete injury that

poses a presently justiciable question. See Bob’s Home Serv., 755

F.2d at 627. 

To establish the second aspect of ripeness, the McKenzies must

show prudential considerations justify present exertion of federal

judicial power. See id. The City asserts current exercise of

federal jurisdiction is unwarranted because the City had not made

a final decision to deny zoning and building permits unless the

McKenzies surrendered the privacy buffer, and the McKenzies had not

sought compensation for the privacy buffer through available state
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procedures. See Williamson County Reg. Planning Comm’n v. Hamilton

Bank, 473 U.S. 172, 186 (1985) (temporary taking by government

regulations). The McKenzies respond that the two Williamson

requirements do not apply in physical taking cases.

Although the district court cited regulatory taking cases when

voicing its concern about jurisdiction, we agree with the McKenzies

that this case involves a physical taking rather than a regulatory

one. Appropriation of a public easement across a landowner’s

property is the taking of a property interest rather than a mere

restriction on the land’s use. See Nollan v. California Coastal

Comm’n, 483 U.S. 825, 831 (1987). The City’s easement for a public

right-of-way gives rise to future physical occupation of the

McKenzies’ land. See Yee v. City of Escondido, 503 U.S. 519, 527

(1992); W.J. Jones Ins. Trust, 731 F. Supp. at 913. When the City

took the conditional easement, the McKenzies lost their right to

exclude the City from possession and use of the land should

contingencies beyond their control arise. See Hall, 833 F.2d at

1277.

A physical taking is by definition a final decision for the

purpose of satisfying Williamson’s first requirement. See Sinaloa

Lake Owners Ass’n v. City of Simi Valley, 882 F.2d 1398, 1402 (9th

Cir. 1989). Besides, the Commission’s letter to the McKenzies

shows the City had made a final decision to deny zoning requests

and building permits until the McKenzies relinquished the privacy

buffer. See Christopher Lake Dev. Co. v. St. Louis County, 35 F.3d

1269, 1274 (8th Cir. 1994). As for the second Williamson

requirement, the plaintiff must seek compensation from the state

before proceeding to federal court if adequate state procedures are

available, even in a physical taking case. See id.; see also

Littlefield v. City of Afton, 785 F.2d 596, 609 (8th Cir. 1986). 
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This is so because when the state provides an adequate process for

obtaining compensation, no Fifth Amendment violation occurs until

compensation is denied. See Sinaloa Lake Owners Ass’n, 882 F.2d at

1402. 

The McKenzies did not pursue compensation for taking of the

privacy buffer through available state procedures. See Collier v.

City of Springdale, 733 F.2d 1311, 1316 (8th Cir. 1984). Even

though the City did not take the land through eminent domain

procedures, the McKenzies have a cause of action against the City

under Ark. Code Ann. § 18-15-410 to recover the value of property

taken in fact. See Robinson v. City of Ashdown, 783 S.W.2d 53, 56

(Ark. 1990); see also Ark. Code Ann. § 18-61-101(a) (1987) (sevenyear statute of limitations). This inverse condemnation procedure

is also available for takings by nuisance. See National ByProducts, Inc., 916 S.W.2d at 748. The McKenzies have not shown a

state inverse condemnation action would be futile, see Azul

Pacifico, Inc. v. City of Los Angeles, 948 F.2d 575, 579 (9th Cir.

1991), so the McKenzies must bring an action in the Arkansas courts

before their takings claims will be ripe for prosecution in the

federal arena.

The McKenzies reply that 42 U.S.C. § 1983 does not require

exhaustion of state remedies. The requirements that the McKenzies

obtain a final decision and attempt state compensation procedures

are not exhaustion requirements, however, but necessary predicates

to showing there has been a taking of property without just

compensation. See Estate of Himelstein v. City of Fort Wayne, 898

F.2d 573, 577 n.5 (7th Cir. 1990). We thus conclude the McKenzies’

claims that the City took the buffer through coercion and the other

land by nuisance are not ripe because the McKenzies have not sought

just compensation from the state. The McKenzies need not pursue 
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state procedures for a claim that the City took the privacy buffer

without a justifying public purpose, however, because this is a

Constitutional violation even if compensation is paid. See Samaad

v. City of Dallas, 940 F.2d 925, 936-37 (5th Cir. 1991). 

Because the City’s decisions to deny zoning and building

permits absent surrender of the privacy buffer were final, the

McKenzies’ due process and equal protection claims based on those

decisions are ripe. See Sinaloa Lake Owners Ass’n, 882 F.2d at

1404; Executive 100, Inc., 922 F.2d at 1540-41; see also

Christopher Lake Dev. Co., 35 F.3d at 1274-75. Although most of

the claims are based on facts giving rise to the McKenzies’ takings

claims, the McKenzies need not seek relief in state court before

bringing their federal due process and equal protection claims.

See Sinaloa Lake Owners Ass’n, 882 F.2d at 1404.

In conclusion, we affirm the dismissal of the takings claims

for lack of jurisdiction because the claims are premature, but

reverse the dismissal of the due process and equal protection

claims. Because the jury rendered a general verdict, we cannot

reinstate the award with respect to the due process and equal

protection claims. We thus remand for further proceedings

consistent with this opinion.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.