Opinion ID: 2674691
Heading Depth: 3
Heading Rank: 3

Heading: Merits of the Takings Claim

Text: “The law recognizes two species of takings: physical takings and regulatory takings.” Buffalo Teachers Fedʹn v. Tobe, 464 F.3d 362, 374 (2d Cir. 2006). This case concerns a regulatory taking, which occurs “when the government acts in a regulatory capacity.” Id. “The gravamen of a regulatory taking claim is that the state regulation goes too far and in essence ‘effects a taking.’” Id. “Regulatory takings are further subdivided into categorical and non‐categorical takings.” Huntleigh USA Corp. v. United States, 525 F.3d 1370, 1378 n.2 (Fed. Cir. 2008). A categorical taking occurs in “the extraordinary circumstance when no productive or economically beneficial use of land is permitted.” Tahoe‐Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 330 (2002). ‐29‐ SHERMAN V. TOWN OF CHESTER “Anything less than a complete elimination of value, or a total loss,” is a non‐categorical taking, which is analyzed under the framework created in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978). Tahoe‐Sierra, 535 U.S. at 330 (internal quotation marks omitted). In Tahoe‐Sierra, the Supreme Court advises three times to “resist the temptation to adopt what amount to per se rules” for regulatory takings. Id. at 326; see also id. at 321, 342. In that case, the Court addressed whether temporary moratoria on development constituted a taking. Id. at 321. It concluded that the answer was “neither ‘yes, always’ nor ‘no, never.’” Id. The Court therefore rejected a categorical taking analysis and decided that issue was “best analyzed within the Penn Central framework.” Id. We follow the Supreme Court’s guidance to resist per se rules. Like the temporary moratoria at issue in Tahoe‐Sierra, evaluating the type of obstruction at issue here is not susceptible to a yes‐always or ‐30‐ SHERMAN V. TOWN OF CHESTER no‐never categorical approach. We will therefore analyze Sherman’s takings claim within the Penn Central framework. We will then consider the Town’s argument that the claim is time barred. And because we conclude under the non‐categorical method that Sherman has stated a claim that the Town effected a taking, we need not decide the issue under the categorical approach.
The Penn Central analysis of a non‐categorical taking “requires an intensive ad hoc inquiry into the circumstances of each particular case.” Buffalo Teachers Fedʹn, 464 F.3d at 375. “We weigh three factors to determine whether the interference with property rises to the level of a taking: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment‐backed expectations; and (3) the character of the governmental action.” Id. (internal quotation marks omitted). Sherman’s claim passes this test. ‐31‐ SHERMAN V. TOWN OF CHESTER First, the Town’s actions effectively prevented Sherman from making any economic use of his property. New studies were demanded after they were already completed; new deficiencies in Sherman’s proposals were found after they were already approved; new fees were required after they had already been paid; and new regulations were created when Sherman complied with what had previously been required. Because the Town kept stringing him along, Sherman could never develop his property. The Town won its war of attrition. Second, the Town interfered with Sherman’s reasonable investment‐backed expectations, “a matter often informed by the law in force in the State in which the property is located.” Ark. Game & Fish Comm’n v. United States, 133 S.Ct. 511, 522 (2012). When Sherman bought MareBrook, it was already zoned for residential use. His reasonable expectation, therefore, was that he would begin recouping that investment after a reasonable time to get the Town’s ‐32‐ SHERMAN V. TOWN OF CHESTER approval on at least some form of development. He could not have expected the Town’s decade of obstruction that pushed him to the brink of bankruptcy. The third factor – the character of the government action – is the most elusive. See John D. Echeverria, Making Sense of Penn Central, 23 UCLA J. ENVTL. L. & POL’Y 171, 186‐99 (2005) (outlining nine possible definitions of “character”); Thomas W. Merrill, The Character of the Governmental Action, 36 VT. L. REV. 649, 661‐71 (2012) (outlining six “themes or ideas” considered by courts when evaluating “character”). In Penn Central itself, the Court stated that “[a] ‘taking’ may more readily be found when the interference with property can be characterized as a physical invasion by government than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.” 438 U.S. at 124 (internal citation omitted). In this case, the Town’s ‐33‐ SHERMAN V. TOWN OF CHESTER actions are not part of a public program adjusting the benefits and burdens of public life. Rather, the Town singled out Sherman’s development, suffocating him with red tape to make sure he could never succeed in developing MareBrook. The Town’s alleged conduct was unfair, unreasonable, and in bad faith. Though the precise contours of the “character” factor may be blurry, we can nevertheless conclude that the Town’s conduct in this case falls safely within its ambit. Balancing the Penn Central factors, we conclude that Sherman stated a non‐categorical takings claim.
The Town argues that Sherman’s takings claim is barred by 42 U.S.C. § 1983’s statute of limitations, which the parties do not dispute is three years in this case. See Ormiston v. Nelson, 117 F.3d 69, 71 (2d Cir. 1997). According to the Town, in evaluating whether Sherman stated a claim, we should have considered only what occurred in the three years before the complaint was filed. ‐34‐ SHERMAN V. TOWN OF CHESTER But that argument would mean that a government entity could engage in conduct that would constitute a taking when viewed in its entirety, so long as no taking occurred over any three‐ year period. We do not accept this. The Town used extreme delay to effect a taking. It would be perverse to allow the Town to use that same delay to escape liability. The only way plaintiffs in Sherman’s position can vindicate the Supreme Court’s admonition in Palazzolo that government authorities “may not burden property by imposition of repetitive or unfair land‐use procedures” is to allow to them aggregate acts that are not individually actionable. See 533 U.S. at 621. A claim based on such a “death by a thousand cuts” theory requires a court to consider the entirety of the government entity’s conduct, not just a slice of it. In fact, in support of the prohibition on repetitive and unfair procedures, the Supreme Court cited a case much like the one before ‐35‐ SHERMAN V. TOWN OF CHESTER us: Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999). That case, already described above in more detail, involved nineteen different site plans and five formal decisions over five years. Id. at 698. City planners kept demanding proposals with fewer residential units after the property owners complied with the previous demand. Id. at 695‐98; see also Tahoe‐Sierra, 535 U.S. at 333‐34 (citing Del Monte Dunes and suggesting that delay in bad faith could support a takings claim). In National Railroad Passenger Corp. v. Morgan, the Supreme Court allowed hostile work environment claims to similarly be evaluated in their entirety. 536 U.S. 101 (2002). In that situation, the “unlawful employment practice . . . cannot be said to occur on any particular day. It occurs over a series of days or perhaps years . . . .” Id. at 115 (internal quotation marks omitted). And each act that makes up the unlawful conduct is likely not actionable on its own. Id. As a result, the Supreme Court concluded, hostile work ‐36‐ SHERMAN V. TOWN OF CHESTER environment claims are timely “so long as an act contributing to that hostile environment takes place within the statutory time period.” Id. at 105. Although this way of applying a statute of limitations is generally used in the employment discrimination context, we have not limited it to that area alone. See Shomo v. City of New York, 579 F.3d 176, 181‐82 (2d Cir. 2009) (concluding that the “continuing violation doctrine” can apply to Eighth Amendment deliberate indifference claims); see also Fahs Constr. Grp., Inc. v. Gray, 725 F.3d 289, 292 (2d Cir. 2013) (per curiam) (concluding that for Equal Protection claims brought under § 1983, “[w]here a plaintiff challenges a continuous practice and policy of discrimination . . . the commencement of the statute of limitations period may be delayed until the last discriminatory act in furtherance of it” (internal quotation marks omitted)). ‐37‐ SHERMAN V. TOWN OF CHESTER Here, Sherman’s claim is based on an unusual series of regulations and tactical maneuvers that constitutes a taking when considered together, even though no single component is unconstitutional when considered in isolation. As in the context of the cases described above, it cannot be said that Sherman’s property was “taken” on any particular day. But because Sherman alleges that at least one of the acts comprising the taking occurred within three years of filing the case, his claim is not time barred. We therefore need not reach the issue of whether the limitations period is tolled under 28 U.S.C § 1367(d).