Court Opinion

ID: 2976630
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:55:04.99223+00
Date Added: 2024-06-11T11:44:02.413844
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                              File Name: 08a0285n.06
                                Filed: May 20, 2008

                                           No. 07-5074

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

INSOMNIA INC.; STEVE COOPER,                             )
                                                         )
       Plaintiffs-Appellants,                            )
                                                         )         ON APPEAL FROM THE
and                                                      )         UNITED STATES DISTRICT
                                                         )         COURT FOR THE WESTERN
NICK FERGIS,                                             )         DISTRICT OF TENNESSEE
                                                         )
       Plaintiff                                         )         OPINION
v.

CITY OF MEMPHIS, TENNESSEE; SHELBY
COUNTY, TENNESSEE; MEMPHIS AND
SHELBY COUNTY LAND USE CONTROL
BOARD,

       Defendants-Appellees.

BEFORE: COLE and GRIFFIN, Circuit Judges; FORESTER, District Judge.*

       R. GUY COLE, JR., Circuit Judge. Insomnia, Inc., a Tennessee-based corporation, and

its owners, Steve Cooper and Nick Fergis, filed suit against the City of Memphis, Tennessee; Shelby

County, Tennessee; and the Memphis and Shelby County Land Use Control Board, alleging

violations of their rights under the First and Fourteenth Amendments of the United States

Constitution. Specifically, Plaintiffs maintain that Defendants denied their application to subdivide

their land into three parcels out of hostility to Cooper’s involvement in the adult entertainment

       *
        The Honorable Karl S. Forester, United States District Judge for the Eastern District of
Kentucky, sitting by designation.
No. 07-5074
Insomnia Inc., et al. v. City of Memphis, Tennessee, et al.

industry and a concern that the land would be used for the purposes of adult entertainment. Finding

that Plaintiffs had not yet received a final decision regarding their land and therefore had not yet

suffered a cognizable injury, the district court concluded that the claims were unripe for adjudication

and accordingly granted the motions to dismiss filed by the City of Memphis and Shelby County.

We affirm the district court’s order of dismissal.

                                                  I.

       Insomnia, Inc., whose sole shareholder is Cooper, owns two contiguous parcels of land in

Memphis, Tennessee, located in Shelby County. Together, the two plots of land occupy no more

than eight acres and are zoned for light to heavy industrial use. In March 2005, Insomnia filed with

the City of Memphis and Shelby County Office of Planning and Development (“OPD”) an

application and preliminary plan to subdivide the two plots of land into three, in order to facilitate

the construction of a restaurant, nightclub, and billboard on each respective subdivision. OPD

reviewed the submitted plans and conditionally recommended approval of the subdivision, subject

to certain terms to which Insomnia agreed.

       On March 10, 2005, in compliance with a local ordinance requiring all subdivisions of real

property to be approved by the Memphis and Shelby County Land Use Control Board (“LUCB”)1,

in addition to the OPD, the LUCB scheduled a hearing to consider Insomnia’s application. Present

at the hearing were several community members who resided near the land at issue and who voiced

their objections to Insomnia’s application out of a concern that the land might be used for an adult

       1
       The LUCB is a hybrid body created under § 26-42 of the Memphis and Shelby County Land
Use Code. Half of the LUCB members are appointed by Shelby County, while the other half of the
members are appointed by the City of Memphis.
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Insomnia Inc., et al. v. City of Memphis, Tennessee, et al.

entertainment business. These residents were specifically disturbed because Cooper owned interests

in the adult entertainment industry in Memphis and elsewhere.

       At the conclusion of the hearing, the LUCB denied the motion to approve the proposal as

recommended by the OPD. Thereafter, the LUCB passed a motion requiring Insomnia to resubmit

its application as a planned development, rather than as a subdivision, and allowing for closer

regulation of the uses to which the property would be put. Rather than resubmitting an application

for a planned development, however, Insomnia appealed the denial of its initial application to the

Memphis City Council pursuant to § 301.4(H) of the Land Use Code, and on June 21, 2005, the City

Council rejected the appeal.

       On September 22, 2005, Insomnia and its then-owners, Cooper and Nick Fergus, filed a

three-count complaint in the Western District of Tennessee against the City of Memphis, Shelby

County, and the LUCB, seeking declaratory relief, compensatory damages, and a permanent

injunction. Insomnia contended that the LUCB and City Council issued their denials out of an

aversion to the adult entertainment business and Cooper’s involvement therein, in violation of the

First and Fourteenth Amendments. The City of Memphis and Shelby County moved to dismiss the

complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), and on December 19, 2006, the

district court granted both motions. Insomnia and Cooper timely appealed to this Court on January

17, 2007.

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Insomnia Inc., et al. v. City of Memphis, Tennessee, et al.

                                                   II.

A. Standard of Review

        We apply a de novo standard of review in assessing a district court’s dismissal for failure to

state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6).

Benzon v. Morgan Stanley Distrib., Inc., 420 F.3d 598, 605 (6th Cir. 2005). In considering a motion

to dismiss under Rule 12(b)(6), we “must accept all well-pleaded factual allegations of the complaint

as true and construe the complaint in the light most favorable to the plaintiff.” Benzon, 420 F.3d at

605 (citing Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002)). Dismissal is appropriate

“only if it is clear that no relief could be granted under any set of facts that could be proved

consistent with the allegations.” Trzebuckowski v. City of Cleveland, 319 F.3d 853, 855 (6th Cir.

2003) (quoting Hishon v. King & Spalding, 457 U.S. 69, 73 (1984)).

B.      Ripeness of Plaintiffs’ Claim

        The sole issue on appeal is whether Plaintiffs’ claims under the First and Fourteenth

Amendments must be dismissed for lack of ripeness. The district court found Plaintiffs’ claims to

be unripe, because Plaintiffs had yet to receive a final denial or authorization to proceed with their

development plans. In response, Plaintiffs argue that the district court erred because the injury they

suffered materialized at the exact moment when Defendants denied their application for a

subdivision out of hostility to the adult entertainment industry in which Cooper is involved. More

specifically, Plaintiffs assert that it was improper for the district court to apply the ripeness doctrine

as explicated by the Supreme Court in Williamson County Regional Planning Commission v.

Hamilton Bank of Johnson City, 473 U.S. 172 (1985), in the context of a takings claim, where a final

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governmental decision is a substantive element of a takings claim and therefore a prerequisite for

federal review. Unlike a takings claim, Plaintiffs maintain that, in the First Amendment context,

there is no finality requirement; rather, an injury to land use becomes legally cognizable as soon as

the adverse governmental decision is made.

       Defendants, in contrast, maintain that the district court acted properly in dismissing

Plaintiffs’ suit because the claims they assert in their complaint are not ripe. In developing this

argument, Defendants insist that no final decision was made regarding the development of the land

at issue, and in the absence of finality, the district court lacked subject matter jurisdiction.

Specifically, Defendants explain that if Plaintiffs submit a revised plan for a proposed development,

as recommended by the LUCB, their plan may either be allowed or denied, and if allowed, Plaintiffs’

claims would be rendered moot. We find Defendants’ argument persuasive.

       Ripeness is one of several principles of justiciability predicated on both “Article III

limitations” and “prudential reasons for refusing to exercise jurisdiction.” Kentucky Press Ass’n,

Inc. v. Kentucky, 454 F.3d 505, 509 (6th Cir. 2006). The doctrine is “designed ‘to prevent the courts,

through premature adjudication, from entangling themselves in abstract disagreements.’” Kentucky

Press Ass’n, 454 F.3d at 509 (quoting Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568,

580 (1985)). The question of ripeness arises in those cases “‘anchored in future events that may not

occur as anticipated, or at all.’” Id. (quoting Nat’l Rifle Ass’n of Am. v. Magaw, 132 F.3d 272, 294

(1997)).

       In determining whether a claim is ripe for review, courts consider three factors: “(1) the

likelihood that the harm alleged by [the] plaintiffs will ever come to pass; (2) whether the factual

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Insomnia Inc., et al. v. City of Memphis, Tennessee, et al.

record is sufficiently developed to produce a fair adjudication of the merits of the parties’ respective

claims; and (3) the hardship to the parties if judicial relief is denied at [this] stage in the

proceedings.” Warshak v. United States, 490 F.3d 455, 467 (6th Cir. 2007) (internal quotations and

citations omitted).

        While the foregoing factors outline the ripeness inquiry in general, in Williamson County,
473 U.S. at 172, the Supreme Court subsequently articulated a more specific formulation of ripeness

for cases involving the alleged taking of a property interest. First, for a plaintiff to successfully

advance a claim that governmental action amounts to a regulatory taking, the “governmental entity

charged with implementing the regulations [must] ha[ve] reached a final decision regarding the

application of the regulations to the property at issue.” Id. at 186. In addition to this finality

requirement, a takings claim only becomes ripe for review when the plaintiff “seek[s] compensation

through the procedures the State has provided for doing so.” Id. at 194.

        Following Williamson County, we extended the first prong of the ripeness

inquiry—finality—beyond claims of regulatory takings to various other constitutional claims arising

out of land use disputes. For example, in both Bannum, Inc. v. City of Louisville, Kentucky, 958 F.2d
1354, 1362 (6th Cir. 1992) and Bigelow v. Michigan Department of Natural Resources, 970 F.2d
154, 158-59 (6th Cir. 1992), we applied the finality requirement to a claim that a city’s zoning

regulations denied the plaintiff equal protection of the laws and a claim that a plan giving exclusive

fishing rights to a group of American Indians denied commercial fisherman equal protection of the

laws.

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Insomnia Inc., et al. v. City of Memphis, Tennessee, et al.

       Likewise, several sister circuits have expanded the applicability of the finality requirement

from takings claims to equal protection and due process claims emerging in the context of land use

disputes. See, e.g., Taylor Inv., Ltd. v. Upper Darby Twp., 983 F.2d 1285, 1295 (3d Cir. 1993)

(imposing finality requirement upon plaintiff’s claim that a zoning hearing officer’s revocation of

a land use permit resulted in an equal protection violation); Unity Ventures v. Lake County, 841 F.2d
770, 775 (7th Cir. 1988) (applying the finality requirement to plaintiff’s claim that denial of access

to sanitary sewer services was a violation of due process and equal protection).

        Even more broadly, the Second Circuit has set forth four policy considerations underlying

the extension of the Williamson County finality requirement to constitutional claims arising in land

disputes:

            First . . . requiring a claimant to obtain a final decision from a local land use authority aids
            in the development of a full record . . . . Second, and relatedly, only if a property owner
            has exhausted the variance process will a court know precisely how a regulation will be
            applied to a particular parcel . . . . Third, a variance might provide the relief the property
            owner seeks without requiring judicial entanglement in constitutional disputes. Thus,
            requiring a meaningful variance application as a prerequisite to federal litigation enforces
            the long-standing principle that disputes should be decided on non-constitutional grounds
            whenever possible . . . . Finally, since Williamson County, courts have recognized that
            federalism principles also buttress the finality requirement. Requiring a property owner to
            obtain a final, definitive position from zoning authorities evinces the judiciary's
            appreciation that land use disputes are uniquely matters of local concern more aptly suited
            for local resolution.

Murphy v. New Milford Zoning Comm’n, 402 F.3d 342, 348 (2d Cir. 2005).

        Drawing on the foregoing ripeness doctrine, the district court explained that, in land

regulation cases, federal courts have entertained a long-standing rule that local government entities

first issue final decisions regarding the land at issue before any challenge to such decision is mature

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No. 07-5074
Insomnia Inc., et al. v. City of Memphis, Tennessee, et al.

for federal review. Applying this well-settled principle to Plaintiffs’ case, the district court rejected

Plaintiffs’ argument that their case became ripe for federal adjudication at the time the LUCB denied

their application and instead found that Plaintiffs had “not yet received a final authorization to move

forward or a final denial.” Insomnia, Inc. v. City of Memphis, 2006 WL 3759895 at *4 (W.D. Tenn.

Dec. 19, 2006). That is, the LUCB’s actions amounted to an interim order informing Plaintiffs to

resubmit their proposal in further detail. Since Plaintiffs did not submit a revised application on the

basis of which the LUCB could issue a final decision, the court concluded that Plaintiffs had not

suffered a discrete injury and so their claim was premature for federal review. We agree.

         While we have not addressed the ripeness issue in the context of a First Amendment

challenge to land use, we have done so in cases raising other challenges to land use, including

procedural due process claims, takings claims, substantive due process claims, and equal protection

claims. In fact, the only type of case in which we have not imposed the finality requirement on

constitutional claims arising out of land use disputes is that which presents a purported violation of

procedural due process. Emphasizing the distinction between takings claims and procedural claims

involving land use, we issued an opinion in Nasierowski Brothers, Investment Company v. City of

Sterling Heights, 949 F.2d 890, 893 (6th Cir. 1991), which reversed the trial court’s reliance on

Williamson County as inapposite. We opined, “unlike the plaintiff in [Williamson County],

Nasierowski did not allege an unconstitutional ‘taking’ of his property under the fifth and fourteenth

amendments” but instead “asserted that he was deprived of procedural due process when he was not

accorded a public hearing at which to challenge” the zoning of his property. Nasierowski Bros., 949
F.2d at 893 (emphasis in original). Nasierowski Brothers underscored that, with respect to the

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“requirement of exhaustion,” there is a “vital distinction between procedural due process claims and

other varieties of constitutional grievances stemming from land use decisions.” Id. at 893-94. In

contrast to a takings claim, “a procedural due process claim is instantly cognizable in federal court

without requiring a final decision on a proposed development from the responsible municipal

agency.” Id. at 894. Applying these principles to the facts of Nasierowski’s case, we concluded that

“Nasierowski’s injuries accrued and attached immediately when Council convened in executive

session and materially deviated from the recommendations of the planning commission, thus

subverting the purpose of the duly conducted notice and comment process.” Id.

        After issuing our decision in Nasierowski Brothers, we underscored that our departure from

the finality requirement arose because of the unique procedural nature of the claims in that case. In

Bigelow v. Michigan Department of Natural Resources, a case involving takings, equal protection,

and procedural due process challenges to a land regulation, we distinguished the facts before us from

those in Nasierowski Brothers because the former “did not present a pure claim of procedural due

process, but instead involve[d] several constitutional claims.” Bigelow, 970 F.2d at 159. Finding

this difference to be “significant,” we cabined Nasierowski Brothers “to stand merely for the sensible

proposition that while different circumstances may produce different results, the final decision rule

does not apply when the denial of procedural due process itself creates an injury.” Bigelow, 970 F.2d

at 159. In other words, Bigelow subsequently limited the reach of Nasierowski Brothers to only a

subset of purely procedural challenges to land use regulations.

        While we have departed from the finality requirement for purely procedural claims, the

Second Circuit has also declined to apply the finality requirement in a limited set of First

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Amendment challenges to land use disputes. In Dougherty v. Town of North Hempstead Board of

Zoning Appeals, 282 F.3d 83, 91 (2d Cir. 2002), the Second Circuit held that the finality requirement

was not applicable to the plaintiff’s claim that a local zoning board revoked his land use permit in

retaliation for his pursuit of a federal court action, in violation of the First Amendment. Explaining

that “in the First Amendment context, the ripeness doctrine is somewhat relaxed[,]” the Second

Circuit held that “[u]nder the circumstances here . . . the alleged retaliatory revocation of

Dougherty’s permit gave rise to a claim ripe for adjudication.” Id.

        Following its decision in Dougherty, however, the Second Circuit elected to impose the

finality requirement on a land use matter presenting First Amendment claims. This subsequent line

of cases interpreting Dougherty suggests that, contrary to Plaintiffs’ assertion, the finality

requirement is applicable to the First Amendment claim at issue. For example, in Murphy v. New

Milford Zoning Comm’n, 402 F.3d 342 (2d Cir. 2005), the plaintiffs invoked the First Amendment

to raise violations of their rights to assemble peaceably and exercise their religion freely after they

were served with a cease and desist order related to the use of their home for prayer meetings.

Rather than obtaining a variance from the zoning board of appeals, the plaintiffs instead instituted

litigation claiming that the application of the zoning ordinance to them violated their rights under

the First Amendment. Murphy, 402 F.3d at 350. To determine whether the plaintiffs were subject

to the finality requirement prior to federal review of their claims, the Second Circuit conducted a

two-part analysis: “Following the guideposts outlined in Dougherty we ask: (1) whether the

[plaintiffs] experienced an immediate injury as a result of [the defendant’s] actions and (2) whether

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requiring the [plaintiffs] to pursue additional administrative remedies would further define their

alleged injuries.” Id. at 351.

        With respect to the first prong, the court found that the plaintiffs did not suffer an immediate

injury because, if they had chosen to appeal the cease and desist order to the zoning board of appeals,

the effect would have been to stay the enforcement of the order. Murphy, 402 F.3d at 351. Turning

to the second prong, the court concluded that “the resolution of the constitutional and statutory

claims we are asked to consider here hinge on factual circumstances not yet fully developed.” Id.

In light of the outcomes of these two prongs, the Murphy court found it was “appropriate to apply

Williamson County’s prong-one finality requirement to each of the [plaintiffs’] claims” and that it

accordingly lacked jurisdiction over their claims. Id. at 352.

        As in Murphy, in the instant case, “[e]nforcing the requirement that [Plaintiffs] first obtain

a final, definitive decision from local zoning authorities ensures that federal review – should the

occasion eventually arise – is premised on concrete and established facts” and that “all non-

constitutional avenues of resolution have been explored first, perhaps obviating the need for judicial

entanglement in constitutional disputes.” Id. at 353. Despite Plaintiffs’ insistence that Dougherty

should inform the disposition of their own First Amendment claims, the Second Circuit’s subsequent

departure from Dougherty in Murphy is more directly applicable to the facts at hand.

        Under the first prong of Murphy, Plaintiffs have not suffered an immediate injury as a result

of Defendant’s actions. If Plaintiffs file a renewed plan as a proposed development, as the LUCB

ordered, there is a chance that their proposal will be approved; under such circumstances, Plaintiffs

will be entitled to proceed with the subdivision of their land and even conduct adult entertainment

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on the premises if they so choose. Such an outcome would discharge any claims of First

Amendment retaliation and obviate the need for federal review. If, however, Plaintiffs’ renewed plan

as a proposed development is rejected, this outcome will further define the contours of Plaintiffs’

claim of First Amendment retaliation. Taken together, these two prongs indicate that the district

court acted properly in dismissing Plaintiffs’ claim as premature.

          Moreover, by recognizing that Plaintiffs’ claims are not ripe for federal review, the district

court promoted three of the four policy considerations the Murphy Court outlined as underlying the

finality requirement. First, waiting until Plaintiffs file a plan for a proposed development before

undertaking federal review will ensure “the development of a full record.” Id. at 348. Second, as

explained above, if Plaintiffs’ revised proposal is approved, they will obtain “the relief . . . [they]

seek[] without requiring judicial entanglement in constitutional disputes.” Id. Lastly, the district

court evinced its respect for “federalism principles” by recognizing that “land use disputes are

uniquely matters of local concern more aptly suited for local resolution.” Id.

          As a final matter, it is important to note that Plaintiffs do not raise any claims procedural

in nature; rather, their allegations of First Amendment retaliation are purely substantive.

Accordingly, our departure from the finality requirement for purely procedural claims, as articulated

in Nasierowski Brothers, is unwarranted in the instant case. Collectively, these policy and doctrinal

considerations make clear that the district court acted properly in dismissing Plaintiffs’ claims as

unripe.

                                                  III.

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        For the preceding reasons, we AFFIRM the judgment of the district court.

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