LOUIS GUIROLA, JR., UNITED STATES DISTRICT JUDGE.
The Court dismissed Plaintiffs' original Complaint for failure to state a claim. (See Mem. Op. & Order Granting Defendant's Motion to Dismiss, ECF No. 14.) Plaintiffs were granted leave to amend their allegations to state a claim for relief and have filed their [15] First Amended Complaint. The First Amended Complaint contains no new factual allegations but attempts to better articulate violations of Plaintiffs' constitutional rights pursuant to 42 U.S.C. § 1983.
Plaintiffs Keshav Mangal and Mukesh Mangal owned a four-plex property located on Jackson Avenue in Pascagoula, Mississippi. Plaintiffs allege that the City of Pascagoula attempted to exercise eminent domain and take their property under a "quick take" procedure, see Miss. Code Ann. §§ 11-27-81 to 89, for the purpose of expanding city-owned athletic fields. The City filed suit in the Special Court of Eminent Domain of Jackson County, Mississippi, paid 85% of a court-appointed appraiser's determined appraisal value for their property into the eminent domain court's registry, and gained immediate possession of Plaintiff's property. Plaintiffs assert that the City had no right to utilize the statutory "quick take" procedure — and had received legal counsel that the "quick take" procedure was inapplicable under the circumstances — but nonetheless did so and mailed Plaintiffs' four-plex tenants a letter advising that the tenants should vacate the premises because the property was to be condemned.
Filings in the state court record, which are attached to the City's Motion to Dismiss,
(Id. at 12-13 (emphasis added).)
The Agreed Final Judgment entered in the Court of Eminent Domain apparently did not dispose of all of Plaintiffs' claims related to the City's exercise of eminent domain over their four-plex. Explicitly not resolved by the Agreed Final Judgment was Plaintiffs' claim that the City's reliance on Mississippi's statutory "quick take" procedure to take immediate possession of the property was unlawful.
Plaintiffs allege that the City "engaged in a course of conduct that resulted in the violation of the Plaintiffs' right[s]" to equal protection under the law and procedural and substantive due process of law pursuant to the Fifth and Fourteenth Amendments and the corresponding provisions of the Mississippi state constitution. (Am. Compl. 2, ECF No. 15.) They also reassert a takings claim under the Fifth and Fourteenth Amendments and corresponding provisions of the Mississippi constitution. (Id. at 2-3.)
The City filed the instant Motion to Dismiss on August 22, 2019. The Motion argues (1) that Plaintiffs' claims are barred by the doctrines of res judicata and claim splitting and (2) that Plaintiffs otherwise fail to state a violation of their constitutional rights.
To survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
In deciding a Rule 12(b)(6) motion to dismiss, the Court accepts all well-pleaded facts as true and views them in the light most favorable to Plaintiff. New Orleans City v. Ambac Assur. Corp., 815 F.3d 196, 199 (5th Cir. 2016). But "the complaint must allege more than labels and conclusions,
"Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). The orders entered in the proceedings before the Special Court of Eminent Domain, though not specifically referred to in Plaintiffs' Complaint, are clearly central to their claim. Moreover, these orders may be considered because they are all matters of public record. See Kaempe v. Myers, 367 F.3d 958, 965 (D.C. Cir. 2004) ("[T]he cited documents are public records subject to judicial notice on a motion to dismiss."); Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) ("To decide a motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record."). The Court may thus consider these orders without converting the City's Motion to one for summary judgment.
"To determine the preclusive effect of a state court judgment in a federal action, federal courts must apply the law of the state from which the judgment emerged." Black v. N. Panola Sch. Dist., 461 F.3d 584, 588 (5th Cir. 2006) (quotation marks omitted); see also Thompson v. Dallas City Attorney's Office, 913 F.3d 464, 467 (5th Cir. 2019) (citing Allen v. McCurry, 449 U.S. 90, 94-105, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980)). Accordingly, Mississippi law applies to this case.
Hill v. Carroll County, 17 So.3d 1081, 1084 (Miss. 2009).
The doctrine of res judicata has two primary functions: bar, which precludes claims that were actually litigated in a previous action, and merger, which prevents litigation of any claim that should have been litigated in a previous action. Id. at 1084-85. However, only unasserted "claims that could have been brought in the prior action are barred." Id. at 1085 (emphasis added). Res judicata "does not bar claims that could not have been asserted in the prior case because of limits on the court's subject matter jurisdiction."
Plaintiffs' § 1983 claims could not have been brought in the Special Court of Eminent Domain because such claims are not within that court's jurisdiction. See id. at 433 ("The Supreme Court's opinion in [Delta MK, LLC v. Mississippi Transportation Commission, 57 So.3d 1284 (Miss. 2011)] clarified that although the special court of eminent domain has `pendent jurisdiction' to resolve `questions of title' that `may arise from [condemnation] proceedings,' [McDonald's Corp. v. Robinson Indus., Inc., 592 So.2d 927, 936 (Miss. 1991)], the special court does not have jurisdiction over independent claims that seek relief on alternative legal theories."). The Mississippi Supreme Court has explicitly upheld a special court of eminent domain's dismissal of due process and civil rights claims, asserted in an inverse-condemnation action, for lack of subject matter jurisdiction. See Delta MK, 57 So. 3d at 1291. There is similarly no reason to conclude, based on Delta MK, that a special court of eminent domain has jurisdiction to hear a claim that the property subject to condemnation was actually taken by earlier government action. See id. Moreover, the City's condemnation proceeding could only have been brought in the Special Court of Eminent Domain.
The City cites Cary v. City of Watseka as a factually identical case supporting its position that Plaintiffs' claims are barred by res judicata. 870 F.Supp.2d 567 (C.D. Ill. 2012), aff'd, 510 F. App'x 473 (7th Cir. 2013). However, Cary is materially distinguishable. Even if Illinois law provides the same preclusive parameters as Mississippi law, the plaintiffs in Cary could have asserted their later-barred claim as a counterclaim in the original condemnation action:
Id. at 570. Because Plaintiffs could not have raised their constitutional violations as counterclaims to the condemnation proceeding in the Special Court of Eminent Domain, their claims in this case are not barred by res judicata.
Plaintiffs reassert a takings claim under the Fifth and Fourteenth Amendments and corresponding provisions of the Mississippi constitution. (Am. Compl. 2-3, ECF No. 15.) This Court previously ruled that the City's act of sending letters to
"The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth Amendment, Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 S.Ct. 979 (1897), directs that `private property' shall not `be taken for public use, without just compensation.'" Phillips v. Wash. Legal Found., 524 U.S. 156, 163-64, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998). "[T]hough the classic taking is a transfer of property to the State or to another private party by eminent domain, the Takings Clause applies to other state actions that achieve the same thing." Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 560 U.S. 702, 713, 130 S.Ct. 2592, 177 L.Ed.2d 184 (2010); see Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 321-23, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002) (explaining that a taking requires government confiscation or physical occupation, or in the case of a regulatory taking, a regulation so severe that it leaves no reasonably economically viable use of the property).
In the prior Memorandum Opinion granting the City's first Motion to Dismiss, the Court stated, "It is clear that up until the point at which the Agreed Final Order was entered in the eminent domain court, the City did not physically occupy Plaintiffs' property." (Mem. Op. & Order Granting Defendant's Motion to Dismiss 6-7, ECF No. 14.) Upon further consideration, that observation appears to have been in error. The Special Court of Eminent Domain entered an Order on August 2, 2018 that granted the City "the right of immediate title and possession and entry upon" Plaintiffs' four-plex, dependant only on the City first depositing 85% of an appraiser's valuation of the property (which amounted to $121,975.00). (Mot. Dismiss Ex. A, at 80-81, ECF No. 19-1). On August 13, 2018, the City deposited $121,975.00 into the state court's registry, perfecting the eminent domain court's August 2, 2018 Order. See Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 11-13, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984) (stating that a taking is effectuated upon the Government tendering payment). Thus, by court order, the City acquired title to and possession of Plaintiffs' property.
This is the very definition of a classic taking: "a transfer of property to the State... by eminent domain." Stop the Beach Renourishment, 560 U.S. at 713, 130 S.Ct. 2592. It is of no matter that the order was set aside slightly more than a month later, or that it was likely contrary to law.
The City argues that any damages stemming from an earlier taking have already been paid to the Plaintiffs because Plaintiffs are only entitled to the fair market
Plaintiffs assert that that the City "engaged in a course of conduct that resulted in the violation of the Plaintiffs' right[s]" to equal protection under the law and procedural and substantive due process of law pursuant to the Fifth and Fourteenth Amendments and the corresponding provisions of the Mississippi state constitution. (Am. Compl. 2, ECF No. 15.) However, Plaintiffs' factual allegations do not establish any such violation of their constitutional rights.
To state an equal protection claim (which here, would presumably be a class-of-two claim), Plaintiffs must show (1) that they were "intentionally treated differently from others similarly situated" and (2) that "there was no rational basis for the difference in treatment." Rountree v. Dyson, 892 F.3d 681, 685 n.10 (5th Cir.), cert. denied, ___ U.S. ___, 139 S.Ct. 595, 202 L.Ed.2d 428 (2018) (quoting Lindquist v. City of Pasadena, 669 F.3d 225, 233 (5th Cir. 2012)). Plaintiffs offer nothing besides conclusory allegations as to the intent behind the City's actions. Moreover, it is not clear how Plaintiffs were treated differently from those similarly situated, or who those similarly situated would be. Finally, Plaintiffs do not contend that no rational basis supports their treatment by the City.
The Due Process Clause of the Fourteenth Amendment encompasses a guarantee of fair procedure. Zinermon v. Burch, 494 U.S. 113, 125, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990). The deprivation by state action of a constitutionally protected interest is not itself a violation of procedural due process. Id. Instead, it is the deprivation of such an interest without due process of law that is unconstitutional. Id.; see also Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999). "Procedural due process claims are subject to a two-step inquiry: The first question asks whether there exists a liberty or property interest which has been interfered with by the State; the second examines whether the procedures attendant upon that deprivation were constitutionally sufficient." ODonnell v. Harris Cty., 892 F.3d 147, 157 (5th Cir. 2018) (internal quotation marks omitted). It is
"Substantive due process `bars certain arbitrary, wrongful government actions regardless of the fairness of the procedures used to implement them.'" Marco Outdoor Advert., Inc. v. Reg'l Transit Auth., 489 F.3d 669, 673 n.3 (5th Cir. 2007) (quoting Zinermon, 494 U.S. at 125, 110 S.Ct. 975). However, where a plaintiff alleges a takings claim and a substantive due process claim together, courts must determine the extent to which the due process claim "rests on protections that are also afforded by the Takings Clause." John Corp. v. City of Hous., 214 F.3d 573, 583 (5th Cir. 2000). Plaintiffs allege that the same City action — the unlawful use of the quick take procedure — both constituted a taking of their property and violated their substantive due process rights. Plaintiffs do not challenge the constitutionality of the statutory "quick take" procedure or assert some other claim besides the deprivation of their property without just compensation. See Steward v. City of New Orleans, 537 F. App'x 552, 556 (5th Cir. 2013). Rather, Plaintiffs' allegations are "simply a takings claim under a substantive due process label." Id. Therefore, the substantive due process claim is not "sufficiently independent from the takings claim to stand on its own." Id.; see also Austin Apartment Ass'n v. City of Austin, 89 F.Supp.3d 886, 901 (W.D. Tex. 2015).
The Court has determined that the First Amended Complaint states a takings claim, but fails to state any other violation of the Fifth or Fourteenth Amendments (and their corresponding state provisions). The City also argues in passing — and the plaintiffs concede — that punitive damages are unavailable under 42 U.S.C. § 1983. Plaintiffs' punitive damages claim is therefore dismissed. Based on the foregoing, the City's Motion to Dismiss will be granted in part and denied in part.
