Court Opinion

ID: 1024486
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:34:20.50151+00
Date Added: 2024-06-11T12:27:18.551874
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 06-2115

ROBERT D. ADAMS, JR.; AILEEN S. ADAMS,

                                            Plaintiffs - Appellants,

           versus

VILLAGE OF WESLEY CHAPEL, a North Carolina
Municipal   Corporation; ALBERT W.  BLACK,
Individually,

                                             Defendants - Appellees.

--------------------------------------------

NORTH CAROLINA PROPERTY RIGHTS COALITION,
INCORPORATED; JOHN LOCKE FOUNDATION,

                                       Amici Supporting Appellants.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Robert J. Conrad, Jr.,
Chief District Judge. (3:03-cv-00411)

Argued:   October 31, 2007               Decided:    December 11, 2007

Before TRAXLER and GREGORY, Circuit Judges, and Jerome B. FRIEDMAN,
United States District Judge for the Eastern District of Virginia,
sitting by designation.

Affirmed by unpublished per curiam opinion.
ARGUED: William J. Brian, Jr., KENNEDY, COVINGTON, LOBDELL &
HICKMAN, L.L.P., Research Triangle Park, North Carolina, for
Appellants.    Steven Kepner McCallister, SHANAHAN LAW GROUP,
Raleigh, North Carolina, for North Carolina Property Rights
Coalition, Incorporated, and John Locke Foundation, Amici
Supporting Appellants.    Ann Cox Rowe, DAVIS & HAMRICK, L.L.P.,
Winston-Salem, North Carolina; Torin L. Fury, FRAZIER, FRANKLIN,
HILL & FURY, R.L.L.P., Greensboro, North Carolina, for Appellees.
ON BRIEF: Patrick L. Byker, KENNEDY, COVINGTON, LOBDELL & HICKMAN,
L.L.P., Research Triangle Park, North Carolina, for Appellants. H.
Lee Davis, Jr., DAVIS & HAMRICK, L.L.P., Winston-Salem, North
Carolina; William L. Hill, FRAZIER, FRANKLIN, HILL & FURY,
R.L.L.P., Greensboro, North Carolina, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

                                2
PER CURIAM:

     Robert D. Adams and Aileen S. Adams appeal a district court

order granting summary judgment against them on various claims

arising out of the annexation of a tract of land that they owned

and declining to exercise supplemental jurisdiction over their

remaining claims.      We affirm.

                                      I.

     Because this is an appeal from the grant of summary judgment,

we view the facts in the light most favorable to the Adamses, the

non-movants.      See Saucier v. Katz, 533 U.S. 194, 201 (2001).

     In July 1999, Albert Black, the mayor of the Village of Wesley

Chapel,   North    Carolina   (“the   Village”),   spoke   to    Mr.   Adams

regarding the possible voluntary annexation of a 184-acre tract of

land that the Adamses owned.        Both men testified that they could

not remember the particulars of the conversation.               Afterwards,

however, Black sent Adams a letter stating in pertinent part:

     It was a pleasure to talk with you on Saturday about the
     Village of Wesley Chapel.        I have enclosed some
     information about Wesley Chapel along with a “Petition
     for Voluntary Annexation.”

     Because some of your neighboring property owners have
     expressed interest in being voluntarily annexed into
     Wesley Chapel within the next thirty or so days, I wanted
     to make sure you were made aware of this in case you
     would also like to become part of Wesley Chapel at this
     time.

     The Village of Wesley Chapel offers you protection from
     another municipality attempting to take you into its
     boundaries through involuntary annexation as well as

                                      3
       offering a low tax rate ($.02 per $100.00 of property
       valuation).

       If you wish to be a part of this voluntary annexation,
       please complete the enclosed form and mail it to us as
       soon as possible. If you have questions, please do not
       hesitate to contact me . . . .

J.A. 3030.    Adams also had a conversation with Black in which Black

told    him   that    his    zoning   would      not    change      if   the    Adamses

voluntarily annexed their property.                    The Adamses subsequently

completed the form and sent it in, and in September 1999, their

petition was approved.

       At the time the tract was annexed, it was zoned “R-40” by

Union County, where the tract was located, and the Village had not

enacted a zoning ordinance.           On July 7, 2000, however, the Village

sent the Adamses a notice of a public hearing on a proposed new

zoning ordinance. The letter stated “that the Village Council does

not    plan   to   change    the    current      zoning      designations       of    any

property.” J.A. 3085, 5769. Indeed, when the zoning ordinance was

subsequently       enacted   on    August      21,   2000,    the    Adamses’       tract

continued     to     be   zoned    R-40;    however,      the    meaning       of    that

designation changed under the new ordinance.                 Under Union County’s

zoning, R-40 was a density standard, while under the Village’s, it

was a minimum lot size.           The new designation excluded flood plain

and power line rights of way from a parcel’s usable area and

allowed no deviations from a minimum-40,000-square-foot lot.                         That

excluded approximately 40 acres of usable area from the Adamses’

                                           4
tract, resulting in 35 fewer house lots that could be developed,

and reducing the property value by $1,590,000.            The Adamses later

petitioned unsuccessfully to rezone their property.

     Dissatisfied with this result, the Adamses filed suits in

state and federal court against the Village and Black in his

individual capacity (“Appellees”).            The state court action was

subsequently removed to federal court and consolidated with the

other federal action.           The Adamses then sold the property in

question for $3,700,000 on March 1, 2004, while this action was

pending.      The Adamses had paid $56,500 for the land in 1964.

     As is relevant here, the Adamses’ complaint alleges violations

of federal and state constitutional provisions protecting against

takings    without      just   compensation    and    violations   of   equal

protection and substantive due process rights.             It also includes

state   law    claims   for    fraud,   negligent    misrepresentation,   and

violation of North Carolina’s unfair and deceptive trade practices

statute, see N.C.G.S. § 75-1.1. The district court granted summary

judgment against the Adamses on the constitutional claims, finding

that their sale of the land rendered the claims moot and that the

claims failed as a matter of law in any event.                 Declining to

exercise supplemental jurisdiction over the remaining state law

claims, the district court remanded them to state court.                  See

28 U.S.C.A. § 1367(c)(3) (West 2006).

                                        5
                                         II.

     The Adamses first contend that the district court erred in

concluding that their constitutional claims were moot.                 We agree.

     In order to have standing, a plaintiff must allege and prove

an actual or imminent injury caused by the defendant’s challenged

conduct that can be redressable by the relief sought.                  See Steel

Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103 (1998).

Generally      speaking,    these   elements       must   continue     to   exist

throughout the lawsuit; otherwise, the action becomes moot.                   See

United States Parole Comm’n v. Geraghty, 445 U.S. 388, 397 (1980).

But cf. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),

Inc., 528 U.S. 167, 190-92 (2000) (explaining that standing need

not always be present through time to prevent a case from becoming

moot).

     The Adamses’ constitutional claims allege that Appellees’

actions proximately caused a reduction in the value of their

property, entitling them to damages. That they have since sold the

property is irrelevant to the redressability of their claim since

a damages award could redress the injury they allege.                 See Memphis

Light,   Gas    &   Water   Div.    v.    Craft,    436 U.S. 1,    8    (1978)

(“Respondents’ claim for actual and punitive damages . . . saves

this cause from the bar of mootness.”).            Thus, the Adamses’ sale of

their property did not moot their constitutional claims.

                                          6
                               III.

     The Adamses next argue that the district court erred in ruling

that they failed to create a genuine issue of material fact

regarding their regulatory takings claims.      We disagree.

     The Takings Clause of the Fifth Amendment to the United States

Constitution provides, “[N]or shall private property be taken for

public use, without just compensation.”1         This constitutional

protection “is not restricted to physical invasions, occupations,

or removals of property.”   Houlton Citizens’ Coalition v. Town of

Houlton, 175 F.3d 178, 190 (1st Cir. 1999).     Rather, in some cases,

overly   burdensome   government   regulation    can   constitute   an

unconstitutional taking.     See id.   “A regulatory taking occurs

when the value or usefulness of private property is diminished by

a regulatory action that does not involve a physical occupation of

the property.”   Levald, Inc. v. City of Palm Desert, 998 F.2d 680,

684 (9th Cir. 1993).     It may occur as a result of “a radical

curtailment of a landowner’s freedom to make use of or ability to

derive income from his land,” even if the government does not

physically intrude upon, or acquire a legal interest in, the

property.   Kirby Forest Indus., Inc. v. United States, 467 U.S. 1,

14 (1984). However, a regulatory action only becomes a compensable

     1
      The Adamses advance the same arguments with regard to their
state constitutional claims as they do for their federal ones. We
therefore do not distinguish between the two for the purposes of
our discussion.

                                   7
taking under the Fifth Amendment if the government interference has

gone “too far,” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415

(1922), which it does when “some people alone” are forced “to bear

public burdens which, in all fairness and justice, should be borne

by the public as a whole,” Armstrong v. United States, 364 U.S. 40,

49 (1960).

     The Adamses agree that the district court was correct to apply

the three-factor regulatory takings test provided in Penn Central

Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978),

to their claim.       Under that test, when a regulation such as a

zoning ordinance causes substantial economic harm but does not

deprive the landowner’s property of all economic value, whether a

taking occurred depends on “the regulation’s economic effect on the

landowner, the extent to which the regulation interferes with

reasonable investment-backed expectations, and the character of the

government action.”         Palazzollo v. Rhode Island, 533 U.S. 606, 617

(2001). Importantly, diminution in the property value alone cannot

establish a taking.         See Penn Central, 438 U.S. at 131.

     Here,     the   only    injury   that        the   Adamses    can     show   is   a

diminution in the value of their property. They certainly were not

denied   the   ability      to   obtain       a   reasonable      return    on    their

investment.     They purchased the property for $56,500 and sold it

for $3.7 million.        The property was worth that much because it

could still be developed, just not quite to the extent that it

                                          8
could have been before the Village adopted its zoning ordinance.

With regard to the test’s final factor, the character of the

government action, the regulation at issue is garden-variety zoning

based    on   the    need    to     control       growth,   preserve   a   small-town

atmosphere, and maintain a low tax rate.2                    The Supreme Court has

previously recognized the legitimacy of similar regulations.                     See,

e.g., City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 732-33

(1995).

     The Adamses confuse matters by trying to include Black’s

actions       in    inducing        them--fraudulently,         they       contend--to

voluntarily        annex    their    property       as   part   of   the   challenged

government action. But the annexation did not impose any burden on

the Adamses’ property rights.             See Lingle v. Chevron U.S.A. Inc.,

544 U.S. 528, 539 (2005) (noting that the regulatory takings test

“focuses directly upon the severity of the burden that government

imposes upon private property rights”).                     “Government action” in

this context refers to the action that imposed the burden--the

Village’s adoption of its zoning ordinance.                  Appellees’ actions in

     2
      The Adamses contend that they received no “reciprocity of
advantage” by the annexation and the Village’s adoption of the
zoning ordinance.    Tahoe-Sierra Pres. Council, Inc. v. Tahoe
Regional Planning Agency, 535 U.S. 302, 341 (2002) (internal
quotation marks omitted). But the Adamses, in fact, received the
very benefits that the zoning ordinance was adopted to provide.
See Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470,
491 (1987) (“While each of us is burdened somewhat by such
restrictions, we, in turn, benefit greatly from the restrictions
placed on others.”).

                                              9
inducing the Adamses to annex their property thus are not relevant

to the regulatory takings claim.              The district court therefore

correctly granted summary judgment against the Adamses on these

claims.

                                       IV.

     The Adamses also maintain that the district court erred in

granting summary judgment against them on their substantive due

process claims.    We disagree.

     In   order   to   recover   for    a    violation   of   substantive   due

process, plaintiffs must prove that they had a property interest,

that the defendants deprived them of that interest, and that the

deprivation “falls so far beyond the outer limits of legitimate

governmental action that no process could cure the deficiency.”

Tri-County Paving, Inc. v. Ashe County, 281 F.3d 430, 440 (4th Cir.

2002) (internal quotation marks omitted).                To prove this third

element, plaintiffs must show that the challenged actions had “no

foundation in reason and [were] a mere arbitrary or irrational

exercise of power having no substantial relation to the public

health, the public morals, the public safety or the public welfare

in its proper sense.”     Sylvia Dev. Corp. v. Calvert County, Md., 48
F.3d 810, 827 (4th Cir. 1995) (internal quotation marks omitted).

     Here, the Adamses maintain that Black misled them by falsely

stating that their land was in danger of being involuntarily

annexed by another town with a higher tax rate if they did not

                                       10
voluntarily annex their property to the Village.                     The Adamses

maintain that Black knew from his involvement in two lawsuits to

prevent previous attempts by the town of Indian Trail to annex

property   in    the   Wesley   Chapel    area   that   North    Carolina    law

prohibits involuntary annexation of large tracts of undeveloped

land such as theirs.

     The Adamses, however, have failed to forecast any evidence

that Black told them that such an involuntary annex attempt could

succeed.     Black’s letter states only that voluntary annexation to

Wesley Chapel could protect the Adamses “from another municipality

attempting” involuntary annexation of their property.                  J.A. 3030

(emphasis added). Indeed, as the Adamses themselves point out, the

town of Indian Trail had attempted such involuntary annexations

previously.

     The Adamses also argue that their substantive due process

rights were violated in light of Black’s prior representation that

the property’s zoning would not change if they voluntarily annexed

it. Although the R-40 designation did not change under the Village

zoning ordinance, the Adamses argue that the changes in the meaning

of that designation under the ordinance significantly lessened the

value of their property.        We conclude that the Adamses’ evidence,

even taken as true, cannot give rise to an inference of conduct

“fall[ing]      so   far   beyond   the    outer   limits       of    legitimate

governmental action that no process could cure the deficiency.”

                                     11
Tri-County Paving, 281 F.3d at 440.      It is undisputed that when the

property was annexed, its zoning did not change.            In fact, the

zoning changed only in August 2000, nearly a year after the

annexation.    Concerns regarding the density requirements that were

eventually adopted were discussed at the August 3, 2000, public

hearing concerning the ordinance.        That those concerns did not

carry the day cannot constitute the basis for a claim of government

conduct so egregious as to amount to a violation of the Adamses’

substantive due process rights.     Moreover, it is worth noting that

the Village honored all plats and subdivision plans that were filed

with Union County before enactment of the Village zoning ordinance.

There is no reason to doubt that the Adamses would have received

the same treatment had they filed a plat prior to the ordinance’s

enactment.    The district court therefore correctly granted summary

judgment on this claim.

                                   V.

     The Adamses further argue that the district court erred in

granting summary judgment against them on their Equal Protection

claims.    We disagree.

     The   Equal   Protection   Clause   of   the   Fourteenth   Amendment

“limits all state action, prohibiting any state from denying a

person equal protection through the enactment, administration, or

enforcement of its laws and regulations.”           Front Royal & Warren

County Indus. Park Corp. v. Town of Front Royal, 135 F.3d 275, 289

                                   12
(4th Cir. 1998) (internal quotation marks & emphasis omitted).            To

establish an Equal Protection claim with a “class of one,” a

plaintiff    must   show   that   he   “has    been   intentionally   treated

differently from others similarly situated and that there is no

rational basis for the difference in treatment.”                 Village of

Willowbrook v. Olech, 528 U.S. 562, 564 (2000).                 Because the

Adamses do not allege the infringement of a fundamental right or

claim a suspect classification, Appellees need only show that the

challenged action “is rationally related to a legitimate state

interest.”    City of Cleburne v. Cleburne Living Ctr., Inc., 473
U.S. 432, 440 (1985).

     The Adamses maintain that Black intentionally treated them

differently than he treated similarly situated landowners when he

solicited the voluntary annexation of their property.            The record

does not bear that out, however.            In fact, Black testified in his

deposition that he had “talked to a lot of people” about voluntary

annexation.    J.A. 2671; see J.A. 2676-77.3

     The Adamses also maintain that Appellees violated their Equal

Protection rights by denying their request to rezone their property

from R-40 to R-20.     The Adamses emphasize that theirs was the only

     3
      The Adamses claim that they were treated differently from
similarly situated landowners because the Village failed to conduct
the statutorily requisite verification of their annexation petition
or publish the statutorily required notice advertising the public
annexation hearing. The Adamses do not contend, however, that they
were harmed by this treatment.

                                       13
zoning request the Village ever denied, and they note that 79% of

the zoning permits issued by the Village for new house construction

on property zoned for lots with a minimum size of 40,000 square

feet were, in fact, issued for lots with less than 40,000 square

feet in spite of their R-40 zoning.   However, the Adamses ignore

the uncontradicted evidence that these lots had been platted under

Union County zoning, that the plats for those subdivisions had been

approved, adopted, and accepted under Union County zoning, and that

the Village had no lawful right to deny those building permits

because the Union County zoning was the lawful zoning ordinance in

place at the time the developments were platted. Thus, the Adamses

failed to create a genuine issue of fact regarding whether these

other lots were similarly situated to theirs.4

                               VI.

     In sum, we conclude that although the Adamses’ constitutional

claims are not moot, the district court properly determined that

the Appellees were entitled to summary judgment on each of them.

                                                          AFFIRMED

     4
      We note that while the Adamses contend that the district
court erred in remanding their claims for fraud, negligent
misrepresentation, and unfair trade practices, they do so only on
the basis that the court erred in granting summary judgment on
their other claims.

                                14