Court Opinion

ID: 2997271
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:35:07.222135+00
Date Added: 2024-06-11T13:24:06.347050
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-1170
MANU PATEL, et al.,
                                            Plaintiffs-Appellants,
                                 v.

CITY OF CHICAGO, et al.
                                            Defendants-Appellees.

                          ____________
          Appeal from the United States District Court for
         the Northern District of Illinois, Eastern Division.
           No. 01 C 1174—Wayne R. Andersen, Judge.
                          ____________
  ARGUED OCTOBER 30, 2003—DECIDED SEPTEMBER 7, 2004
                     ____________

 Before RIPPLE, MANION, and DIANE P. WOOD, Circuit
Judges.
  DIANE P. WOOD, Circuit Judge. Manu Patel, Chanchal
Patel, and Mukti Enterprises, Inc. (“the Plaintiffs”) own
eleven motels on Chicago’s far north side. After the Chicago
City Council passed an ordinance designating the area
surrounding the motels as a redevelopment zone and
identifying the motels as potential targets for acquisition
through eminent domain, the Plaintiffs filed suit against
the City of Chicago, Mayor Richard M. Daley, and Alderman
Patrick J. O’Connor (“the Defendants”). The Plaintiffs allege
that the City’s placement of their properties on this acquisi-
2                                                 No. 03-1170

tion list was arbitrary and thus violates the equal protec-
tion clause of the Fourteenth Amendment to the U.S.
Constitution. After deciding that the Plaintiffs’ claim was
not ripe for review in federal court, the district court granted
the Defendants’ motion to dismiss pursuant to Federal Rule
of Civil Procedure 12(b)(1). We hold that the Plaintiffs’ claim,
whether labeled an equal protection claim or a takings
claim, is subject to the special ripeness standards for con-
stitutional property rights claims established in Williamson
County Regional Planning Commission v. Hamilton Bank,
473 U.S. 172 (1985). Because the Plaintiffs have not yet
satisfied those standards, we affirm.

                               I
  On November 3, 1999, the Chicago City Council passed an
ordinance entitled, “Authorization for Approval of Tax
Increment Development Plan for Lincoln Avenue
Redevelopment Project Area” (“the Ordinance”). Pursuant
to the Illinois Tax Increment Allocation Redevelopment Act,
65 ILCS 5/11-74.4-1 et seq., the Ordinance authorizes the
use of tax increment financing to fund the redevelopment of
an area on the City of Chicago’s far north side. In passing
the ordinance, the City Council made the finding that the
Redevelopment Project Area “on the whole has not been
subject to growth and development through investment by
private enterprise and would not reasonably be expected to
be developed without the adoption of the Plan.” The Ordi-
nance specifically provides:
    In compliance with Section 5/11-74.4-4(c) of the Act and
    with the Plan, the Corporation Council is authorized to
    negotiate for the acquisition by the City of parcels con-
    tained within the Area. In the event the Corporation
    Counsel is unable to acquire any of said parcels through
    negotiation, the Corporation Counsel is authorized to
    institute eminent domain proceedings to acquire such
    parcels.
No. 03-1170                                                    3

The Ordinance incorporates Map 4, the “Acquisition Map,”
which indicates “the parcels currently authorized to be ac-
quired for clearance and redevelopment in the Redevelopment
Project Area,” and Exhibit 3, entitled, “Acquisition by Block
and Parcel Identification Number.”
  The Lincoln Avenue Redevelopment Project Area includes
a range of businesses in various states of repair and
disrepair, but the Ordinance’s acquisition map identified
only the Plaintiffs’ eleven motel properties as pre-autho-
rized for acquisition. According to the Plaintiffs, their
motels “are not in a deteriorated condition, do not have
obsolescence, excessive land coverage or other blighting
characteristics, and, in fact, are in much better condition
than many structures in the Project Area.” The City sees
matters differently. It has said that “the environment of
some businesses along Lincoln Avenue, especially the motels,
is characterized by transient, 24-hour traffic along alleys
abutting residential uses, inefficient ingress and egress, and
a lack of upkeep.” Likewise, the press has reported that
Mayor Daley has described the motels as “hotbeds—if you’ll
excuse the term— of drugs and prostitution.” David Roeder,
Developers plot the end of Lincoln Ave. vice strip, CHI. SUN-
TIMES, Sept. 11, 2002, at 53.
  In February 2001, the Plaintiffs filed a three-count com-
plaint. Count I alleged that the City and Mayor Daley vio-
lated the Plaintiffs’ right to equal protection under the
Fourteenth Amendment by enacting an ordinance that au-
thorized the City to institute eminent domain proceedings
against the motels; Count II charged the City and Alderman
O’Connor with violating the Plaintiffs’ rights under the Illinois
Constitution by threatening to use the City’s eminent do-
main authority in bad faith; and Count III alleged that the
Defendants wrongfully attempted an inverse condemnation
of the motels, also in violation of the Illinois Constitution.
At the time the Plaintiffs filed suit, the City had not appro-
priated funds to acquire their properties nor had it initiated
4                                                 No. 03-1170

condemnation proceedings against them. On this basis,
Defendants filed a motion to dismiss pursuant to Federal
Rules of Civil Procedure 12(b)(1) and 12(b)(6). On March 25,
2002, the court granted the Defendants’ motion under Rule
12(b)(1) on the grounds that the Plaintiffs lacked standing to
file suit and that their claim was not yet ripe for review.
Having found that it lacked subject matter jurisdiction to
hear the Plaintiffs’ equal protection claim, the court then dis-
missed the Plaintiffs’ supplemental state law claims. Later,
the district court granted the Plaintiffs’ motion to vacate
the judgment and for leave to file an amended complaint,
but on December 20, 2002, the court again granted the
Defendants’ motion to dismiss pursuant to Rule 12(b)(1).
The Plaintiffs then appealed.
   Since the Plaintiffs filed their appeal, there have been sev-
eral developments relevant to this case of which we take
note. Most significantly, the Ordinance’s pre-authorization
of the Plaintiffs’ motels as potential targets for eminent
domain proceedings has expired. With respect to the Plain-
tiffs’ properties, the Ordinance stipulates:
    [T]he acquisition of occupied properties by the City shall
    commence within four years from the date of the pub-
    lication of the ordinance approving the Plan. Acquisition
    shall be deemed to have commenced with the sending of
    an offer letter. After the expiration of this four-year
    period, the City may acquire such property pursuant to
    this Plan under the Act according to its customary
    procedures.
The Ordinance was published on November 10, 1999, see 1
Journal of the Proceedings of the City Council of the City of
Chicago, Illinois, Nov. 10, 1999, at 14777, causing it to ex-
pire on November 10, 2003, shortly after we heard argu-
ment in this case. In response to our request for a status
report regarding whether the City had re-authorized the
Ordinance, the City filed a statement on November 7, 2003,
No. 03-1170                                                 5

confirming that the Ordinance “will expire in a matter of
days” and reporting that it “has plans to pursue the acqui-
sition of two of the plaintiffs’ motels, the Lincoln Motel and
the Patio Motel. With respect to the other nine motels, the
City has not made the decision to proceed with acquisition.”
The City also acknowledged that “as to the Lincoln and
Patio Motels, after November 10, 2003, the City may only
acquire these properties if it follows its customary proce-
dures. These procedures include seeking a recommendation
from the Community Development Commission to the City
Council, and obtaining the passage of an ordinance approv-
ing the acquisitions by the City Council.” Subsequently, in
March 2004, the Plaintiffs filed a motion to supplement the
record, which included letters from the City offering to
purchase two of their properties and indicating its intention
to commence eminent domain proceedings if they declined
its offer.

                             B
  We review de novo the district court’s grant of a motion to
dismiss under Rule 12(b)(1). Tobin for Governor v. Ill. State
Bd. of Elections, 268 F.3d 517, 521 (7th Cir. 2001), cert.
denied, 535 U.S. 929 (2002). In doing so, “[w]e accept all of
the well-pleaded factual allegations in the plaintiff’s
complaint as true and draw all reasonable inferences in
favor of the plaintiff. We shall affirm the district court’s
dismissal of the complaint only if it appears beyond doubt
that the plaintiff cannot prove any set of facts that would
entitle it to relief.” Id. (internal citations omitted).
  The Plaintiffs have attempted to state an equal protection
claim arising from the Defendants’ decision to target their
properties for eminent domain proceedings merely by
including them in the Ordinance’s acquisition list and map.
Specifically, they allege that “the Ordinance states no
rational reason to single out for acquisition by the City
6                                                 No. 03-1170

through eminent domain or by other means the parcels on
which the Motels are located. The designation of such par-
cels for acquisition is arbitrary and capricious and exhibits
an animus by defendants towards plaintiffs.” It therefore
appears that they are not claiming that they have been
singled out as “members of a vulnerable group, racial or
otherwise, for unequal treatment.” Esmail v. Macrane, 53
F.3d 176, 178 (7th Cir. 1995). Instead, they appear to be
claiming that the Ordinance is a law that rests on wholly
irrational distinctions, presumably between their properties
and all others in the City. See id. (noting that this theory
rarely succeeds). Or, they may in part be trying to assert
the type of equal protection claim that arises when a party
is subject to “a spiteful effort to ‘get’ him for reasons wholly
unrelated to any legitimate state objective.” Id. at 180
(providing the example of “an ordinance saying: ‘No one
whose last name begins with ‘F’ may use a portable sign in
front of a 24-hour food shop, but everyone else may.’ ”
(internal citation and quotation marks omitted). We have
commented that this third theory “provide[s] a kind of last-
ditch protection against governmental action wholly
impossible to relate to legitimate governmental objectives.”
Id. at 180.
   Regardless of the precise nature of the attempted equal
protection claim, our review at this stage of the case is lim-
ited to the question whether the requirements of Article III
of the Constitution have been satisfied—in particular, whether
the claim is ripe for our review. The basic rationale of the
ripeness doctrine “is to prevent the courts, through avoidance
of premature adjudication, from entangling themselves in
abstract disagreements over administrative policies, and
also to protect the agencies from judicial interference until
an administrative decision has been formalized and its ef-
fects felt in a concrete way by the challenging parties.”
Sprint Spectrum L.P. v. City of Carmel, 361 F.3d 998, 1002
(7th Cir. 2004) (quoting Abbott Labs. v. Gardner, 387 U.S. 136,
148-49 (1967)) (internal quotation marks omitted).
No. 03-1170                                                  7

   In Williamson County, “the Supreme Court articulated a
special ripeness doctrine for constitutional property rights
claims which preclude[s] federal courts from adjudicating
land use disputes until: (1) the regulatory agency has had
an opportunity to make a considered definitive decision, and
(2) the property owner exhausts available state remedies for
compensation.” Forseth v. Vill. of Sussex, 199 F.3d 363, 368
(7th Cir. 2000). Williamson County explains that “[t]he
Fifth Amendment does not proscribe the taking of property;
it proscribes taking without just compensation.” 473 U.S. at
194. Therefore, “if a State provides an adequate procedure for
seeking just compensation, the property owner cannot claim
a violation of the Just Compensation Clause until it has
used the procedure and been denied just compensation.” Id.
at 195. “We have subject matter jurisdiction over only those
takings claims for which the Williamson County require-
ments are satisfied or otherwise excused.” Greenfield Mills,
Inc. v. Macklin, 361 F.3d 934, 957-58 (7th Cir. 2004).
  As a preliminary matter, we must decide whether Wil-
liamson County’s special ripeness requirements apply in
this case. The Plaintiffs insist that they do not because
theirs is an equal protection claim, not a takings claim.
While “[t]his Circuit has read Williamson broadly, rejecting
attempts to label ‘takings’ claims as ‘equal protection’ claims
and thus requiring ‘ripeness,’ ” we have also recognized that
“bona fide equal protection claims arising from land-use
decisions can be made independently from a takings claim
and without being subject to Williamson ripeness.” Forseth,
199 F.3d at 370. “Absent a fundamental right or a suspect
class, to demonstrate a viable equal protection claim in the
land-use context, the plaintiff must demonstrate ‘governmen-
tal action wholly impossible to relate to legitimate govern-
mental objectives.’ ” Id. at 370-71 (quoting Esmail, 53 F.3d
at 180). This standard is “satisfied when the equal protection
claim [is] based on: (1) the malicious conduct of a govern-
mental agent, in other words, conduct that evidences a
8                                                   No. 03-1170

spiteful effort to ‘get’ him for reasons wholly unrelated to
any legitimate state objective; or (2) circumstances, such as
prayer for equitable relief and a claim [that] would evapo-
rate if the [governmental body] treated everyone equally,
that sufficiently suggest that the plaintiff has not raised
just a single takings claim with different disguises.” Id. at
371 (internal citations and quotation marks omitted).
  Applying this standard, we conclude that the Plaintiffs’
have merely re-labeled their takings claim as an equal pro-
tection claim, presumably to avoid Williamson County’s ripe-
ness requirement. The Plaintiffs’ first amended complaint
makes clear that their equal protection claim is not based
on membership in a protected class, which would render
Williamson County’s ripeness requirements inapplicable.
See id. at 370. Rather, the Plaintiffs’ characterization of
both the injury they have allegedly suffered and the relief
they seek places their claim squarely within the rubric of a
takings claim and the coverage of Williamson County. In
their first amended complaint, the Plaintiffs assert that
they have been injured because “[t]he threat of eminent
domain and the conduct of defendants . . . depresses the
value of the motel properties and discourages upgrading of
the properties and other similar acts.” We have explained
that “[i]f plaintiffs’ only real claim [i]s that [the governmental
entity] has rendered their businesses worthless, then pur-
suant to the rule of Williamson County they must go to
state court . . . because their claim was truly (and solely)
one for a taking.” Hager v. City of West Peoria, 84 F.3d 865,
870 (7th Cir. 1996).
  Furthermore, the Plaintiffs seek relief in the form of a
declaration “that the eminent domain provisions of the TIF
Ordinance are unconstitutional and invalid as to them and
the properties on which the Motels are located” and an
injunction barring the City from enforcing its eminent do-
main powers against the Plaintiffs’ properties. This is pre-
cisely the kind of relief that Williamson County prohibits,
No. 03-1170                                                      9

recognizing that the federal courts’ role is not to enjoin lo-
calities from exercising their eminent domain powers, but
to ensure that property owners are justly compensated when
localities exercise that power. See Williamson County, 473
U.S. at 194 (observing that the Constitution does not “require
that just compensation be paid in advance of, or contempo-
raneously with, the taking; all that is required is that a
‘reasonable, certain and adequate provisions for obtaining
compensation’ exist at the time of the taking.” (quoting
Regional Rail Reorganization Act Cases, 419 U.S. 102, 124-
25 (1974))). Indeed, to grant such injunctive relief to all targets
of eminent domain proceedings who recast their takings
claims as equal protection claims would render Williamson
County’s holding nugatory. See River Park, Inc. v. City of
Highland Park, 23 F.3d 164, 167 (7th Cir. 1994) (“Labels do
not matter. A person contending that state or local regu-
lation of the use of land has gone overboard must repair to
state court.”).
  Having found the Plaintiffs’ claim governed by Williamson
County, we readily conclude that it is not ripe under the
standards established in that case. The City has not ini-
tiated eminent domain proceedings against the Plaintiffs’
properties, let alone failed to provide just compensation for
taking those properties. Hence, the Plaintiffs have suffered
no injury under the Constitution. See Williamson County,
473 U.S. at 195. Moreover, we have specifically rejected tak-
ings claims, like the Plaintiffs’, which allege injury arising
from a property’s placement on a list of potential targets for
eminent domain proceedings. See, e.g., SGB Fin. Servs., Inc.
v. Consolidated City of Indianapolis-Marion County, 235
F.3d 1036 (7th Cir. 2000). In SGB, the plaintiffs argued that
Indianapolis effected a taking when it placed SGB’s prop-
erty on the city’s “acquisition list” for an area that it
declared blighted and suitable for redevelopment. Id. at
1037. SGB “offered to prove that it had become unable to
sell the buildings at a profit, or borrow funds to improve
10                                                No. 03-1170

them, because potential buyers and lenders feared that
Indianapolis would acquire the property at a low price.” Id.
We rejected this claim, observing that it “sounds like an ar-
gument that Indiana courts do not award full market value
in condemnation proceedings, for it must be the anticipated
buyout price rather than a property’s simple presence on
the list that affects how lenders and potential purchasers
deal with owners in the meantime.” Id. We further explained,
“If the state pays full market price in the event of an ac-
quisition, then buyers will be willing to pay the market price
in prior transactions, and owners will make (and lenders
will fund) all cost-justified improvements whether or not an
acquisition occurs. If, on the other hand, state courts system-
atically award inadequate compensation, then prices of prop-
erty will fall in anticipation, whether or not the property
appears on a formal list.” Id. We therefore concluded that,
under the reasoning of Williamson County, SGB had to seek
compensation through a state inverse condemnation claim
before it could bring suit in federal court. Id. at 1039.
  Because the Plaintiffs have suffered no injury and will
only do so if and when the City fails to compensate them
justly for their properties, their claim is not ripe for review.
For this reason, we need not consider the Plaintiffs’ motion
to supplement the record, which included letters from the
City to the Plaintiffs indicating its intention to commence
eminent domain proceedings with respect to two of the
motel properties if the Plaintiffs decline the City’s offer to
pay the properties’ market value. These letters do not alter
our ripeness analysis, as under Williamson County only
documentation showing that the Plaintiffs had unsuc-
cessfully attempted to obtain just compensation through the
procedures provided by the state for obtaining such compen-
sation would allow us to exercise jurisdiction over the
Plaintiffs’ claim. Thus, our analysis is unaffected by the
contents of the Plaintiffs’ motion and the enclosed letters.
No. 03-1170                                           11

                          III
 For these reasons, we AFFIRM the district court’s judg-
ment granting the Defendants’ motion to dismiss.

A true Copy:
      Teste:

                      ________________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit

                  USCA-02-C-0072—9-7-04