Court Opinion

ID: 9963453
Source: CourtListenerOpinion
Date Created: 2024-04-25 16:01:34.063693+00
Date Added: 2024-06-11T08:24:49.429626
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 23-1678
PAMELA J. ANTOSH and NED E. LASHLEY,
                                               Plaintiffs-Appellants,
                                v.

VILLAGE OF MOUNT PLEASANT, et al.,
                                              Defendants-Appellees.
                    ____________________

        Appeal from the United States District Court for the
                   Eastern District of Wisconsin.
         No. 2:22-cv-00117-BHL — Brett H. Ludwig, Judge.
                    ____________________

     ARGUED JANUARY 8, 2024 — DECIDED APRIL 25, 2024
                ____________________

   Before WOOD, SCUDDER, and ST. EVE, Circuit Judges.
    WOOD, Circuit Judge. Before us is another chapter in Pam-
ela Antosh and Ned Lashley’s litigation challenging the Vil-
lage of Mount Pleasant’s use of its eminent-domain power to
acquire their property. They ﬁrst ﬁled suit in state court in
2019, soon after the Village condemned their property for
road improvements associated with the private Foxconn de-
velopment. In state court, Antosh and Lashley opted to con-
test only the amount of compensation they were owed, not
2                                                   No. 23-1678

the propriety of the taking. But when the state court ruled
against them on an evidentiary issue two years into litigation,
they decided to try their luck in federal court. In their federal
complaint, they alleged for the ﬁrst time that the taking was
improper because it served a private purpose, not a public
one.
    The district court saw this federal suit as a strategic eﬀort
to circumvent an unfavorable state-court ruling without tak-
ing the necessary steps to appeal. Accordingly, it dismissed
the action without prejudice, citing Colorado River Water Con-
servation District v. United States, 424 U.S. 800 (1976). Antosh
and Lashley now appeal that judgment. We conclude that the
district court was right to refrain from exercising jurisdiction
over their federal claims, and so we aﬃrm.
                                I
    The Village of Mount Pleasant gained national notoriety
as an economic hub in late 2017, when Taiwanese electronics
company Foxconn announced a plan to open its ﬁrst major
American factory there. The Village lured the manufacturing
giant to the area in part by promising to acquire more than
2,800 acres of privately owned land for the new development.
In September 2017, the state of Wisconsin helped the Village
live up to its word: the legislature authorized the creation of
Tax Incremental Financing District Number 5 (“TIF No. 5”),
allowing the Village to ﬁnance expenses associated with the
Foxconn development. Consistent with TIF requirements un-
der state law, the Village rezoned properties within TIF No. 5
from “agricultural” to “business park.” See Wis. Stat.
§ 66.1105.
No. 23-1678                                                    3

    The Village also needed to make substantial improve-
ments to the transportation infrastructure in the area to facil-
itate public access to the Foxconn development. One of these
eﬀorts included expanding and improving both County
Highway KR and 90th Street. To do that, the Village deter-
mined that it was necessary to re-route 90th Street through
part of a three-acre parcel owned by Antosh and Lashley. The
parcel was located within TIF No. 5 on the corner of the two
roads.
    In 2019, the Village followed the steps required under state
law to condemn a large portion of Antosh and Lashley’s prop-
erty. See Wis. Stat. § 32.05. On June 3, 2019, the Village sent
Antosh and Lashley an appraisal letter explaining that the
“proposed municipal improvement project” would involve
the improvement of various roadways “to allow for the con-
struction of an industrial development that is commonly
known as the Foxconn development.” The Village later ﬁled a
relocation order stating that the condemnation of the property
was necessary for the highway improvement project. On Sep-
tember 19, 2019, the Village issued a jurisdictional oﬀer to
purchase their property. That document identiﬁes “[h]ighway
or other transportation related purposes” as the “public pur-
pose” of the taking. And ﬁnally, on November 20, 2019, the
Village recorded an award of damages, thereby transferring
the property interests to the Village. See Wis. Stat. § 32.05(7).
    Under Wisconsin law, Antosh and Lashley had two op-
tions for challenging the taking: a “compensation” action and
a “right-to-take” action. An owner who wishes to contest “the
amount of just compensation to be paid” by the condemnor
must ﬁle a compensation action within two years from the
date of the taking. Wis. Stat. § 32.05(11). On the other hand, an
4                                                  No. 23-1678

owner who wishes to contest a taking “for any reason other
than that the amount of compensation oﬀered is inadequate”
must ﬁle a right-to-take action within 40 days of receiving the
jurisdictional oﬀer. See Wis. Stat. § 32.05(5) (stating that an
owner who fails to meet that deadline “shall be barred from
raising any such objection in any other manner”).
    Antosh and Lashley did not ﬁle a right-to-take action.
(They received the Village’s jurisdictional oﬀer on September
19, 2019, and so their 40-day window lapsed on October 29,
2019.) They did, however, ﬁle a compensation action in Racine
County Circuit Court on December 4, 2019, seeking greater
compensation for the taking. They contended that the Village
had paid other property owners in the Foxconn area ﬁve to
eight times more than it had oﬀered them. After two years of
state-court proceedings, the case was set to proceed to trial on
February 1, 2022.
    That schedule was interrupted when a key evidentiary
dispute emerged in advance of trial. Antosh and Lashley
hired an expert appraiser who produced two valuations of
their property. One valued the land as “agricultural” prop-
erty; the other, higher appraisal, valued the land as “business
park” property (reﬂecting the 2017 zoning changes). In re-
sponse, the Village ﬁled a motion in limine, seeking to exclude
any evidence relating to the “business park” valuation. The
Village urged that this evidence was barred by Wisconsin’s
Project Inﬂuence Rule, which provides that changes in prop-
erty value “caused by the public improvement for which such
property is acquired” may not be considered in determining
just compensation. Wis. Stat. § 32.09(5)(b). The Village argued
that the “public improvement” for which the property was
taken included the Foxconn development (not just the
No. 23-1678                                                    5

highway improvements), and so the property had to be as-
sessed as “agricultural.”
    At a ﬁnal pre-trial conference on January 5, 2022, the state
court granted the Village’s motion in limine. For purposes of
the Project Inﬂuence Rule, the court concluded, the “public
improvement” involved “all of the public infrastructure, in-
cluding requiring zoning modiﬁcations implemented to bet-
ter support the [Foxconn] development.”
    On January 28, 2022, four days before trial was to start,
Antosh and Lashley ﬁled this suit in the Eastern District of
Wisconsin against the Village under 42 U.S.C. § 1983. For the
ﬁrst time, they alleged that the Village condemned their land
for a private purpose in violation of the Fifth Amendment.
They also alleged equal protection and substantive due pro-
cess violations under the Fourteenth Amendment.
    The state court held a hearing three days later to discuss
the impact of the federal suit on the state case. Antosh and
Lashley asked the state court to adjourn the proceedings. That
court expressed serious concerns about their litigation tactics.
It saw the federal suit as an attempt to have a federal court
“take a look at” its ruling on the Village’s motion in limine,
“essentially circumventing” appellate review by the state
courts. At the same time, the court recognized that a favorable
ruling in federal court would render the state case “a nullity.”
Although it was “not happy” that the federal complaint
“looks like an end run of [its] decision,” the state court agreed
to stay the trial pending resolution of the federal suit.
   The Village later ﬁled a motion to dismiss the federal com-
plaint pursuant to Federal Rule of Civil Procedure 12(b)(6). It
asked the district court to abstain from exercising its
6                                                   No. 23-1678

jurisdiction over the proceeding, and in the alternative, to dis-
miss the case on the merits. Characterizing the federal suit as
“utter gamesmanship” showing “tremendous disrespect for
the state court system,” the district court elected to dismiss
the federal claims, though it did so without prejudice to their
renewal. Antosh and Lashley now appeal that judgment, ar-
guing that the district court’s decision to abstain was an abuse
of discretion.
                               II
    Although abstention “is the exception, not the rule,” Colo-
rado River, 424 U.S. at 813, under established abstention doc-
trines, “a federal court may, and often must, decline to exer-
cise its jurisdiction where doing so would intrude upon the
independence of the state courts and their ability to resolve
the cases before them.” SKS & Associates, Inc. v. Dart, 619 F.3d
674, 677 (7th Cir. 2010). These doctrines “are not rigid,” how-
ever. Driftless Area Land Conservancy v. Valcq, 16 F.4th 508, 525
(7th Cir. 2021). The unifying feature of the Supreme Court’s
abstention cases is that “they all implicate (in one way or an-
other and to diﬀerent degrees) underlying principles of eq-
uity, comity, and federalism foundational to our federal con-
stitutional structure.” J.B. v. Woodard, 997 F.3d 714, 722 (7th
Cir. 2021).
    Under the doctrine recognized in Colorado River, a federal
court may defer to a concurrent state court case in exceptional
circumstances where abstention would promote “wise judi-
cial administration.” 424 U.S. at 818. Several prudential prin-
ciples animate this doctrine, including “the interest in con-
serving judicial resources, the desirability of avoiding dupli-
cative litigation and the risk of conﬂicting rulings, and the
beneﬁts of promoting a comprehensive disposition of the
No. 23-1678                                                      7

parties’ dispute in a single judicial forum.” Driftless, 16 F.4th
at 526. We use a two-step inquiry to assess whether Colorado
River abstention is appropriate. First, we ask “whether the
federal and state actions are … parallel.” DePuy Synthes Sales,
Inc. v. OrthoLA, Inc., 953 F.3d 469, 477 (7th Cir. 2020). If so, we
ask “whether the necessary exceptional circumstances exist to
support a stay or dismissal.” Id.
   We review a district court’s determination that state and
federal proceedings are parallel de novo, but we review its
overall decision to abstain for abuse of discretion. Loughran v.
Wells Fargo Bank, 2 F.4th 640, 647 (7th Cir. 2021).
                                A
    Two suits need not be mirror images to be considered par-
allel. Rather, concurrent actions are parallel “when substan-
tially the same parties are contemporaneously litigating sub-
stantially the same issues in another forum.” DePuy, 953 F.3d
at 477 (quoting Clark v. Lacy, 376 F.3d 682, 686 (7th Cir. 2004)).
The “critical question” is whether there is a “substantial like-
lihood that the state litigation will dispose of all claims pre-
sented in the federal case.” Huon v. Johnson & Bell, Ltd., 657
F.3d 641, 646 (7th Cir. 2011).
    Antosh and Lashley’s state and federal actions bear obvi-
ous similarities. For one, the two suits involve the same oper-
ative facts. Both arise from the Village’s exercise of its emi-
nent-domain power to condemn their property. And, alt-
hough in the federal suit Antosh and Lashley named two ad-
ditional defendants (the Village’s development authority and
the Village’s president), the parties are otherwise identical.
The relevant inquiry is “whether the addition of new parties
with diﬀerent interests alters the central issues in the
8                                                     No. 23-1678

concurrent case.” Loughran, 2 F.4th at 648. Here, the incentives
and goals of the new defendants in the federal action align
with those of the Village, and that suﬃces to make the parties
in the two suits “functionally the same.” Id.
    That said, the federal and state litigation present diﬀerent
issues. In state court, Antosh and Lashley spent two years
contesting the amount of compensation owed for the taking.
In federal court, they urge that the taking has been illegitimate
all along, because the Village seized their property for a pri-
vate use under the guise of a public one. So the two suits are
not perfectly symmetrical: regardless of how the dust settles
in state court, their public-use takings claim in federal court
will go unanswered.
    This lopsidedness, however, is not fatal to a ﬁnding that
the actions are parallel. The fact that the federal and state suits
involve diﬀerent issues is entirely a product of Antosh and
Lashley’s own litigation choices. They could have raised a
public-use claim years ago—either in state court, by ﬁling a
right-to-take action, see Wis. Stat. § 32.05(5), or in federal
court, see Knick v. Township of Scott, 139 S. Ct. 2162 (2019)
(holding that plaintiﬀs need not exhaust state court remedies
before challenging a taking in federal court). Antosh and
Lashley chose neither of these paths. Instead, they spent two
years in state court seeking only to recover more money for
their property. That they now, with the beneﬁt of hindsight,
regret their earlier litigation decisions is not a valid basis for
granting them a chance to start over on their takings claim in
federal court.
    Moreover, we have never demanded an exact ﬁt between
the federal and state cases, no matter the theory of abstention.
See, e.g., Courthouse News Service v. Brown, 908 F.3d 1063, 1071
No. 23-1678                                                     9

(7th Cir. 2018) (basing its decision to abstain “on the more
general principles of federalism” even though the case was
“not a perfect ﬁt” with any of the abstention doctrines), cert.
denied, Courthouse News Service v. Brown, 140 S. Ct. 384 (2019)
(mem.); see also J.B., 997 F.3d at 723 (same). “Instead, the ab-
stention inquiry is ﬂexible and requires a practical judgment
informed by principles of comity, federalism, and sound judi-
cial administration.” Driftless, 16 F.4th at 527.
    Federalism concerns loom large here. The timing of the
federal suit is telling. For two years, as state court proceedings
moved along, Antosh and Lashley were satisﬁed to contest
only the amount of compensation owed. They were ready to
proceed to trial on that issue. Only after the state court issued
a ruling that limited the compensation they could recover did
they decide to ﬁle their federal complaint. As the state court
observed, what Antosh and Lashley “obviously” want is for a
federal court to “take a look at” its ruling. At bottom, they seek
to circumvent the Wisconsin appellate court—the proper tri-
bunal in which they may challenge the state court’s ruling.
Their litigation tactics signal “a lack of respect for the state’s
ability to resolve [the issues] properly before its courts.” SKS
& Associates, 619 F.3d at 679. We would be endorsing those
tactics were we to allow this federal suit to proceed.
    Although Antosh and Lashley insist that they are not fo-
rum shopping, the record belies this assertion. They contend
that for two years the Village concealed the fact that the road
improvements that necessitated the taking were intended to
facilitate the private Foxconn development, and so they dis-
covered that they had an actionable public-use takings claim
only when the Village ﬁled its motion in limine in 2021. As the
saying goes, that dog won’t hunt. Given the extensive local
10                                                    No. 23-1678

and national media coverage that the 2,800-acre Foxconn de-
velopment received, it is hard to believe that Antosh and
Lashley failed to connect the dots between the road improve-
ments and Foxconn. And not surprisingly, the record con-
ﬁrms this common-sense insight. Back in June 2019, the Vil-
lage sent Antosh and Lashley an appraisal letter notifying
them that the “roadways are being improved to allow for the
construction of an industrial development that is commonly
known as the Foxconn development” (emphasis added). And, as
the district court noted, Antosh and Lashley “spent two years
arguing in state court that they should be entitled to greater
compensation similar to other property owners whose land
was condemned for the purpose of the Foxconn development”
(emphasis in original).
    Antosh and Lashley also point out that they have pleaded
due process and equal protection claims in federal court, but
for similar reasons, this does not help them. Their substantive
due process claim alleges that the taking was an arbitrary
abuse of power. This theory relies on a premise that, as we
have just explained, the record contradicts—that the Village
blindsided them about the relation between the road im-
provements and Foxconn. Meanwhile, their equal protection
theory is that the Village paid their “similarly situated neigh-
bors” ﬁve to eight times more than it oﬀered them. Yet recall
that Antosh and Lashley advanced this exact argument in the
state-court compensation action. We repeatedly have held
that the parallel nature of the concurrent cases cannot be “dis-
pelled by repacking the same issue under diﬀerent causes of
action.” See, e.g., Clark, 376 F.3d at 687.
    Taken together, it is evident that this case is just a strategic
attempt to bypass an unfavorable state-court ruling two years
No. 23-1678                                                    11

into that litigation. That Antosh and Lashley’s own litigation
decisions have created a mismatch between the federal and
state actions is not enough to destroy the parallel nature of the
actions here, where exercising federal jurisdiction would of-
fend fundamental principles of federalism. We thus agree
with the district court that the two actions are parallel for the
purposes of Colorado River abstention.
                                B
    Keeping in mind the federalism concerns we outlined ear-
lier, we next consider the district court’s determination that
exceptional circumstances justify its decision to dismiss with-
out prejudice. A variety of factors can inform this inquiry.
They are spelled out in Loughran, 2 F.4th at 647. This list, we
have stressed, is “designed to be helpful, not a straitjacket.
Diﬀerent considerations may be more pertinent to some cases,
and one or more of these factors will be irrelevant in other
cases.” Id. We address only the more useful points here.
    Several factors counsel in favor of abstention. Both the fed-
eral and state suits are about rights in the same real property,
over which the Village assumed jurisdiction more than four
years ago. Indeed, the Village already has built a road across
it. The desirability of avoiding piecemeal litigation over the
Village’s use of its eminent domain power to acquire the prop-
erty also supports abstention. “Multi-jurisdictional legal chal-
lenges involving the same subject matter are costly, disrup-
tive, and run the risk of conﬂicting rulings.” Driftless, 16 F.4th
at 527. Judicial economy concerns run deep also: the state
court has devoted two years of judicial time and resources to
resolving Antosh and Lashley’s compensation action. The
timing of the two actions favors deferring to the state courts.
Antosh and Lashley ﬁled the state suit in December 2019 and
12                                                  No. 23-1678

were just four days away from the start of trial when they ﬁled
the federal suit in January 2021. They have provided no good
reason for us to interfere with the state court’s extensive han-
dling of the ﬁrst-ﬁled, pending case.
     Finally, the vexatious or contrived nature of the federal
claims strongly favors abstention. We already have explained
why that is so, but we repeat: only after Antosh and Lashley
lost an evidentiary ruling in state court did they ﬁle their fed-
eral complaint. Further evincing the contrived nature of the
federal action is their uncredible assertion that they did not
know until 2021 that the road improvements made on their
property were associated with the Foxconn development. The
district court was entitled to infer from Antosh and Lashley’s
litigation strategy that this federal suit is “utter gamesman-
ship”—“little more than a tardy, tactical eﬀort to get a ‘do-
over’ on their takings challenge to avoid a ruling they do not
like without taking the necessary steps to appeal.”
    We see no need for an exhaustive survey of the remaining
factors. Even if we were to assume that they do not support
abstention, there is more than enough here to demonstrate
that the district court did not abuse its discretion. And the re-
maining factors (inconvenience of the federal forum, source
of governing law, concurrent jurisdiction, possibility of re-
moval, and the adequacy of the state-court action to protect
the federal rights of the plaintiﬀs) do not decisively support
anyone. We understand that, pursuant to Wisconsin law, it is
probably too late for Antosh and Lashley to bring a public-use
takings claim in state court. See Wis. Stat. § 32.05(5). But they
have only themselves to blame for that. Since “state courts are
co-equal partners when it comes to protecting federal
rights[,]” it is enough to know that Antosh and Lashley could
No. 23-1678                                                  13

have sought to vindicate their federal rights in Wisconsin
courts. DePuy, 953 F.3d at 479; see also DeVillier v. Texas, No.
22-913, 2024 WL 1624576 (U.S. Apr. 16, 2024) (availability of
an action under state law provides adequate vehicle for claims
under the Takings Clause).
    What matters most in the end is that the district court
acted well within its discretion when it concluded that allow-
ing this federal suit to proceed would run contrary to funda-
mental principles of equity, comity, and federalism. The need
to safeguard these principles readily supports deference to
the state courts in this case.
   The judgment of the district court is AFFIRMED.