Opinion ID: 2674691
Heading Depth: 2
Heading Rank: 1

Heading: Takings Claim and Williamson County Ripeness

Text: We evaluate the ripeness of a takings claim under the two prong test established by the Supreme Court in Williamson County. For the claim to be ripe, the plaintiff must “show that (1) the state regulatory entity has rendered a ‘final decision’ on the matter, and (2) the plaintiff has sought just compensation by means of an available state procedure.” Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002). “Because Williamson County is a prudential rather than a jurisdictional rule, we may determine that in some instances, the rule should not apply and we still have the power to decide the case.” Sansotta v. Town of Nags Head, 724 F.3d 533, 545 (4th Cir. 2013); see also Horne v. Dep’t of Agric., 133 S.Ct. 2053, 2062 (2013) (recognizing that Williamson County “is not, strictly speaking, jurisdictional”); Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 733‐34 (1997) (describing the Williamson County prongs as “two independent prudential hurdles”). ‐18‐ SHERMAN V. TOWN OF CHESTER
Sherman concedes that the Town has not reached an official final decision. He argues instead that he does not need to meet this requirement because seeking a final decision would be futile. “[T]he finality requirement is not mechanically applied. A property owner, for example, will be excused from obtaining a final decision if pursuing an appeal to a zoning board of appeals or seeking a variance would be futile. That is, a property owner need not pursue such applications when a zoning agency lacks discretion to grant variances or has dug in its heels and made clear that all such applications will be denied.” Murphy v. New Milford Zoning Comm’n, 402 F.3d 342, 349 (2d Cir. 2005). Additionally, “[g]overnment authorities, of course, may not burden property by imposition of repetitive or unfair land‐use procedures in order to avoid a final decision.” Palazzolo v. Rhode Island, 533 U.S. 606, 621 (2001); see also MacDonald, Sommer & Frates v. Yolo Cnty., 477 U.S. 340, 350 n.7 (1986) (“A property owner is of ‐19‐ SHERMAN V. TOWN OF CHESTER course not required to resort to piecemeal litigation or otherwise unfair procedures in order to obtain this determination.”). While these two exceptions to the finality requirement – futility and unfair/repetitive procedures – are distinct concepts, in this case, the analyses for the two are the same. Sherman argues that seeking a final decision would be futile because the Town used – and in all likelihood will continue to use – repetitive and unfair procedures in order to avoid a final decision. The final decision requirement “follows from the principle that only a regulation that ‘goes too far,’ results in a taking under the Fifth Amendment.” Suitum, 520 U.S. at 734 (internal citations omitted). Normally, “[a] court cannot determine whether a regulation has gone ‘too far’ unless it knows how far the regulation goes.” MacDonald, 477 U.S. at 348. However, in this case, Sherman is not challenging any one regulation. Rather, he argues that the repeated zoning changes and other roadblocks – the “procedure he ‐20‐ SHERMAN V. TOWN OF CHESTER had to endure” – constituted a taking. See Appellant’s Brief at 27. A final decision is not necessary to evaluate whether that obstruction itself constituted a taking. In Del Monte Dunes at Monterey, Ltd. v. City of Monterey, the Ninth Circuit ruled that seeking a final decision would be futile under similar circumstances. 920 F.2d 1496, 1506 (9th Cir. 1990). In that case, the property owners submitted a proposal to develop their property with 344 residential units. Id. at 1502. The plan was denied by the planning commission, and the city planners stated that a proposal with 264 units would be received favorably. Id. When the owners submitted a new 264‐unit plan, it was denied, and the city planners this time stated that a proposal with 224 units would be received favorably. Id. When the owners submitted a new 224‐unit plan, it was denied as well. Id. That decision was appealed to the city council, which referred the project back to the planning commission with a request that it consider a 190‐unit plan. Id. The ‐21‐ SHERMAN V. TOWN OF CHESTER owners submitted a new 190‐unit plan, which was also denied. Id. The owners once again appealed to the city council, which approved the plan so long as fifteen conditions were met. Id. at 1503. The owners submitted a new plan which substantially met those conditions. That too was denied by both the planning commission and the city council. Id. at 1504, 1506. Yet none of this constituted a “final decision.” The Ninth Circuit ruled that the property owners did not need to meet the final decision prong of Williamson County. Id. at 1506. The court reasoned that “[r]equiring [the owners] to persist with this protracted application process to meet the final decision requirement would implicate the concerns about disjointed, repetitive, and unfair procedures expressed in MacDonald . . . .” Id. (internal citations omitted). Requiring Sherman to persist with a similar protracted application process would implicate these same concerns. For years, ‐22‐ SHERMAN V. TOWN OF CHESTER every time Sherman submitted or was about to submit a proposal for MareBrook, the Town changed its zoning regulations, sending Sherman back to the drawing board. It retroactively issued a six month moratorium on development that appears to have applied only to Sherman’s property. That six month moratorium was extended for another year until after Sherman sued the Town. Town officials also repeatedly asked Sherman to resubmit studies and plans that had already been approved. The District Court adopted a narrower view of futility than the Ninth Circuit’s: that while “the ripeness doctrine does not require litigants to engage in futile gestures such as to jump through a series of hoops, the last of which is certain to be obstructed by a brick wall, the presence of that brick wall must be all but certain for the futility exception to apply.” Sherman v. Town of Chester, No. 12 Civ. 647, 2013 WL 1148922, at  (S.D.N.Y. Mar. 20, 2013) (internal alteration omitted). Applying that standard to our case, the court ‐23‐ SHERMAN V. TOWN OF CHESTER below concluded, “Here, all that is known is that Plaintiff has jumped through many hoops – more, perhaps, than sound policy should require – and there are one or more hoops in the future. The inference that there is a brick wall at the end is hard to establish, and it is not established here, though it is a close case.” Id. This analysis does not account for the nature of the Town’s tactics. The Town will likely never put up a brick wall in between Sherman and the finish line. Rather, the finish line will always be moved just one step away until Sherman collapses. In essence, the Town engaged in a war of attrition with Sherman. Over ten years, Sherman was forced to spend over $5.5 million on top of the original $2.7 million purchase. As a result, he became financially exhausted to the point of facing foreclosure and possible personal bankruptcy. Moreover, at no point could Sherman force the Town to simply give a final “yay or nay” to his proposal. When asked at argument, the Town’s counsel could not name one way Sherman could have ‐24‐ SHERMAN V. TOWN OF CHESTER appealed any aspect of the Town’s decade of maneuvers in order to obtain a final decision. See Oral Arg. Tr. at 21:20‐22:9. “We are mindful that federal courts should not become zoning boards of appeal . . . .” Sullivan v. Town of Salem, 805 F.2d 81, 82 (2d Cir. 1986). Every delay in zoning approval does not ripen into a federal claim. Unfortunately, it is no simple task to distinguish procedures that are merely frustrating from those that are unfair or would be futile to pursue. But when the government’s actions are so unreasonable, duplicative, or unjust as to make the conduct farcical, the high standard is met. And it was met in this case. Seeking a final decision would be futile because the Town used – and will in all likelihood continue to use – repetitive and unfair procedures, thereby avoiding a final decision. Sherman is therefore not required to satisfy the first prong of Williamson County. This conclusion is consistent with the principles behind Williamson County. The final decision requirement ‐25‐ SHERMAN V. TOWN OF CHESTER ensures that a court knows how far a regulation goes before it is asked to determine whether that regulation “goes too far.” In this case, we are not dealing with any one regulation but the Town’s decade of obstruction. A final decision is not necessary to evaluate whether that obstruction was itself a taking.
Under the second prong of Williamson County, a plaintiff’s claim is ripe only if the “plaintiff has sought just compensation by means of an available state procedure.” Dougherty, 282 F.3d at 88. While Williamson County prevents a plaintiff from bringing his takings claim in federal court before first seeking compensation from the state, it “does not preclude state courts from hearing simultaneously a plaintiff’s request for compensation under state law and the claim that, in the alternative, the denial of compensation would violate the [Takings Clause of the] Fifth Amendment of the Federal Constitution.” San Remo Hotel, L.P. v. City and Cnty. of S.F., 545 U.S. 323, 347 (2005). This is because “[r]eading Williamson ‐26‐ SHERMAN V. TOWN OF CHESTER County to preclude plaintiffs from raising such claims in the alternative would erroneously interpret [the Supreme Court’s] cases as requiring property owners to ‘resort to piecemeal litigation or otherwise unfair procedures.’” Id. (quoting MacDonald, 477 U.S. at 350 n.7). Sherman first brought suit against the Town in federal court in 2008. The Town argued that the takings claim was unripe in part because Sherman had not alleged that he sought and was denied just compensation by an available state procedure. Sherman voluntarily dismissed the case, and followed San Remo by filing his federal takings claim and his state law claim for compensation in state court. The Town then removed the case from state court to federal court, where it argued once again that the takings claim must be dismissed because it can be heard only in state court under Williamson County. In Sansotta v. Town of Nags Head, 724 F.3d 533 (4th Cir. 2013), the Fourth Circuit concluded that when the defendant removes a ‐27‐ SHERMAN V. TOWN OF CHESTER takings claim to federal court, the state procedures prong of Williamson County does not apply. We agree with that court’s reasoning that “refusing to apply the state‐litigation requirement in this instance ensures that a state or its political subdivision cannot manipulate litigation to deny a plaintiff a forum for his claim.” Id. at 545. The removal maneuver prevents Sherman from litigating his federal takings claim until he finishes litigating his state law claim for compensation. In other words, it prevents Sherman from pursuing both claims simultaneously, no matter what forum they are brought in. This runs against San Remo, which allows plaintiffs to do just that. In other words, the removal tactic can “deny[ ] a plaintiff any forum for having his claim heard,” or at least force the plaintiff into the kind of piecemeal litigation that, under San Remo, cannot be required. See id. at 547. ‐28‐ SHERMAN V. TOWN OF CHESTER We conclude that when a defendant removes a takings claim from state court to federal court, the second prong of Williamson County is satisfied. Sherman’s takings claim is ripe, and we may address the merits.
“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).