Filed: Nov. 29, 2018
Latest Update: Mar. 03, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 17-2112 PULTE HOME CORPORATION; SHILOH FARM INVESTMENTS LLC, Plaintiffs - Appellants, v. MONTGOMERY COUNTY, MARYLAND; MARYLAND-NATIONAL CAPITAL PARK AND PLANNING COMMISSION, Defendants - Appellees. Appeal from the United States District Court for the District of Maryland, at Greenbelt. George Jarrod Hazel, District Judge. (8:14-cv-03955-GJH) Argued: September 25, 2018 Decided: November 29, 2018 Before WILKINSON and AGEE, Circuit
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 17-2112 PULTE HOME CORPORATION; SHILOH FARM INVESTMENTS LLC, Plaintiffs - Appellants, v. MONTGOMERY COUNTY, MARYLAND; MARYLAND-NATIONAL CAPITAL PARK AND PLANNING COMMISSION, Defendants - Appellees. Appeal from the United States District Court for the District of Maryland, at Greenbelt. George Jarrod Hazel, District Judge. (8:14-cv-03955-GJH) Argued: September 25, 2018 Decided: November 29, 2018 Before WILKINSON and AGEE, Circuit ..
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 17-2112
PULTE HOME CORPORATION; SHILOH FARM INVESTMENTS LLC,
Plaintiffs - Appellants,
v.
MONTGOMERY COUNTY, MARYLAND; MARYLAND-NATIONAL
CAPITAL PARK AND PLANNING COMMISSION,
Defendants - Appellees.
Appeal from the United States District Court for the District of Maryland, at Greenbelt.
George Jarrod Hazel, District Judge. (8:14-cv-03955-GJH)
Argued: September 25, 2018 Decided: November 29, 2018
Before WILKINSON and AGEE, Circuit Judges, and James P. JONES, United States
District Judge for the Western District of Virginia, sitting by designation.
Affirmed by published opinion. Judge Jones wrote the opinion, in which Judge
Wilkinson and Judge Agee joined.
ARGUED: Deborah Jean Israel, WOMBLE BOND DICKINSON (US) LLP,
Washington, D.C., for Appellants. Howard Ross Feldman, WHITEFORD, TAYLOR &
PRESTON, LLP, Baltimore, Maryland, for Appellees. ON BRIEF: Louis J. Rouleau,
Lela M. James, Pascal F. Naples, WOMBLE BOND DICKINSON (US) LLP,
Washington, D.C., for Appellants. Marc P. Hansen, John P. Markovs, Patricia P. Via,
Paul F. Leonard, Jr., OFFICE OF THE COUNTY ATTORNEY, Rockville, Maryland;
Erek L. Barron, Bethesda, Maryland, Cara C. Murray, Baltimore Maryland, John J.
Hathway, WHITEFORD, TAYLOR & PRESTON, LLP, Washington, D.C., for Appellee
Montgomery County, Maryland. Adrian R. Gardner, William C. Dickerson, Elizabeth L.
Adams, MARYLAND-NATIONAL CAPITAL PARK AND PLANNING
COMMISSION, Riverdale, Maryland; Aaron L. Casagrande, Patrick D. McKevitt,
WHITEFORD, TAYLOR & PRESTON, LLP, Baltimore, Maryland, for Appellee
Maryland-National Capital Park and Planning Commission.
2
JONES, District Judge:
In this case involving a land use dispute, Pulte Home Corporation and Shiloh Farm
Investments LLC (collectively “Pulte”) ask us to revive their dismissed federal and state
constitutional claims and wade into the waters of local government decisions and zoning
regulations. That we decline to do. This court has stated repeatedly in similar cases, and
as recently as last year, that federal courts are not the appropriate forum to challenge local
land use determinations. We again conclude that the landowner has failed to state viable
constitutional claims against local entities based on zoning actions. Because Pulte had no
constitutional property interest in developing its land as it had contemplated, and the local
authorities had a plausible, rational basis for their actions, we affirm the district court’s
entry of judgment on the pleadings.
I.
Pulte is a residential real estate developer. Between November 2004 and January
2006, Pulte purchased or contracted to purchase 540 acres of real property in Clarksburg,
Maryland, which is located in Montgomery County (“County”). At the time Pulte
purchased the land, development of it was governed by the 1994 Clarksburg Master Plan
& Hyattstown Special Study Area (“1994 Master Plan”). The 1994 Master Plan divided
development of Clarksburg into four stages. In the fourth stage, the part of Clarksburg
containing Pulte’s land was to be developed into residential communities at specified
densities.
Pulte’s land was designated as a receiving property for Transferable Development
Rights (“TDR”). The land was zoned to allow for one dwelling unit per acre, but Pulte
3
could increase the allowable density to two units per acre by purchasing TDRs from
agricultural properties in a different area of Montgomery County. The purchase of the
TDRs would place a covenant on the agricultural property that would restrict its ability to
be developed in the future. In essence, the TDR process was adopted by the County in
order to encourage residential development in some areas while discouraging it in others.
Pulte invested more than twelve million dollars to purchase several hundred
TDRs. It recorded its ownership of the TDRs. Its intention was to use the TDRs to build
between 954 and 1,007 detached homes and townhomes on the land it had purchased in
the TDR receiving area.
Under the 1994 Master Plan, there were several prerequisites for the
commencement of Stage 4 development. These included a baseline biological
assessment of the Little Seneca Creek and Ten Mile Creek watersheds; the issuance of at
least 2,000 building permits in the areas that were to be developed in Stages 2 and 3; and
the release of a report analyzing water quality management practices in analogous
developments in similar watersheds and recommending best practices for water quality
management and mitigation of potential environmental damage. All necessary triggers
had occurred by 2009.
The 1994 Master Plan stated that “[i]ndividual developments within [Stage 4] can
proceed once public agencies and the developer have complied with all of the
implementing mechanisms.” J.A. 311 n.2. One of the listed implementing mechanisms
was that once all of the prerequisite conditions had been met, “the County Council will
consider Water and Sewer Plan amendments that would permit the extension of public
4
facilities to the Ten Mile Creek area.”
Id. at 311. Another listed implementing
mechanism was that “[p]roperties in this stage are subject to . . . approval by the Planning
Board.”
Id.
Pulte submitted its Water and Sewer Category Change Request application for
review by the County and the Maryland-National Capital Park and Planning Commission
(“Commission”) in May 2009, along with a required ten thousand dollar filing fee. The
County, however, has never acted on Pulte’s application. In September 2010, the County
returned the filing fee and told Pulte that it would review the application in the spring of
2011. But 2011 came and went, and the County did not consider the application. Pulte
resubmitted its application and filing fee in 2012, along with a water quality management
plan, but the County still took no action on it.
In December 2012, Pulte submitted a Pre-Application Concept Plan to the
Commission as required by the County Subdivision Ordinance. Pulte contends that the
plan fully conformed with the governing Zoning Ordinance, yet the Commission rejected
the plan as not ripe for review. The County and Commission refused to meet with Pulte
to discuss the plan and stopped responding to Pulte’s detailed letters and other
communications.
Rather than proceeding with Stage 4 development, the County and Commission
reopened the 1994 Master Plan to study the Ten Mile Creek watershed, in which Pulte’s
land is located. The 1994 Master Plan stated: “Master plans . . . are intended to be
updated and revised about every 10 years. It is recognized that circumstances will
change following adoption of a plan and that the specifics of a master plan may become
5
less relevant over time.”
Id. at 527. Regarding water and sewer change applications, the
Master Plan provided that the County Council may undertake several alternative actions
after completing assessments, including to “[d]efer action on a Water and Sewer Plan
category change, pending further study or consideration as deemed necessary and
appropriate by the Council” or to “[c]onsider such other land use actions as are deemed
necessary.”
Id. at 312.
In October 2013, the Commission’s Montgomery County Planning Board
(“Planning Board”) submitted to the County a draft amendment to the 1994 Master Plan,
which the County extensively revised and approved (“Amendment”). Pulte asserts that
the Amendment was aimed specifically at Pulte’s land and was based on pretextual and
faulty science regarding the proposed development’s impact on water quality. The
Amendment implemented a variety of regulatory changes that severely reduced the
number of dwellings Pulte could build on its land and placed additional costly burdens on
Pulte, such as a requirement to dedicate parkland.
Pulte had submitted its own expert reports to counter those of the experts retained
by the Commission. Pulte’s evidence indicated that the planned development would
implement state-of-the-art environmental site design measures that would not only satisfy
all state and local laws and regulations to protect water quality, but would actually
improve the water quality of Ten Mile Creek over its pre-development condition.
According to Pulte, the County ignored Pulte’s expert reports entirely, failing to discuss
them at all during work sessions on the proposed Amendment. Pulte has alleged that the
County instead bowed to political pressure from environmental groups and set out to
6
develop whatever evidence it could to support the actions it had already determined it
would take. After the public record had closed, the County solicited new testimony in an
effort to justify the changes it intended to make to the draft Amendment.
The County approved a version of the Amendment that departed significantly
from what the Commission had proposed. The Commission then adopted the version of
the Amendment that the County had approved. The adopted version of the Amendment
imposed a six percent cap on impervious surface cover and an eighty percent open space
requirement on Pulte’s land. On April 1, 2014, the same day that the Commission
adopted the Amendment, the County suspended the erstwhile twice-per-year schedule for
consideration of water and sewer applications and declared that any such pending
applications would be reviewed together at an unspecified future time. Pulte contends
that this announcement established a de facto moratorium on water and sewer change
requests.
The County then enacted the Clarksburg West Environmental Overlay Zone in the
Zoning Ordinance, which imposed the same low impervious cap and high open space
requirement on Pulte’s development of its land along with additional environmental
requirements, while implementing a higher fifteen percent impervious cap on other
properties in the Ten Mile Creek watershed. Soon thereafter, the Planning Board
amended its Environmental Guidelines to require additional buffer zones and forest
conservation plans and to otherwise greatly restrict the future use and development of
Pulte’s land. At the behest of the Commission, the County downzoned Pulte’s land to an
agricultural classification. Meanwhile, other properties in the Ten Mile Creek watershed
7
either retained their existing zoning classification or were upzoned. The County also
enacted the Ten Mile Creek Special Protection Area, imposing further requirements on
Pulte’s development of its land. As a result of these new requirements and limitations,
Pulte has alleged that it can now develop at most seventeen percent of its land, or ninety-
three acres.
In response to what it perceived as an arbitrary and capricious targeting of its land,
Pulte commenced a suit against the County and Commission in state court in November
2014. Pulte’s Complaint asserted due process, equal protection, and regulatory taking
claims under the United States and Maryland Constitutions as well as an additional state
constitutional claim. The County removed the action to federal district court. After the
parties had engaged in some discovery, but before any depositions had been taken or
experts identified, the County and Commission moved for entry of judgment on the
pleadings pursuant to Federal Rule of Civil Procedure 12(c), and the district court granted
their motion. Pulte now asks us to reverse.
II.
We review the district court’s decision de novo, applying the same standard that
applies to a dismissal under Federal Rule of Civil Procedure 12(b)(6). People for the
Ethical Treatment of Animals v. U.S. Dep’t of Agric.,
861 F.3d 502, 506 (4th Cir. 2017).
We “accept[] as true all well-pleaded allegations in the plaintiff[s’] complaint and draw[]
all reasonable factual inferences in the plaintiff[s’] favor.” Belmora LLC v. Bayer
Consumer Care AG,
819 F.3d 697, 705 (4th Cir. 2016). A motion for judgment on the
pleadings is properly granted if “it appears certain that the plaintiff cannot prove any set
8
of facts in support of [its] claim entitling [it] to relief.” Priority Auto Grp., Inc. v. Ford
Motor Co.,
757 F.3d 137, 139 (4th Cir. 2014) (internal quotation marks and citation
omitted).
A.
We first consider the district court’s dismissal of Pulte’s claims under the Due
Process Clause of the Fourteenth Amendment. The district court held that Pulte could
not prevail on its substantive or procedural due process claims because it had no
constitutional property interest to develop its land under the 1994 Master Plan or to have
its Water and Sewer Category Change Request processed in light of the discretion
reserved to the local authorities under the 1994 Master Plan. We agree.
To succeed on a due process claim, whether procedural or substantive, a
landowner must first show that it had a constitutional property interest and that the state
deprived it of that interest. Quinn v. Bd. of Cty. Comm’rs,
862 F.3d 433, 443 (4th Cir.
2017). One has a constitutionally protected property interest only if it has a “legitimate
claim of entitlement,” rather than a mere “abstract need or desire” or “unilateral
expectation.” Town of Castle Rock v. Gonzalez,
545 U.S. 748, 756 (2005) (internal
quotation marks and citation omitted). Entitlements subject to due process protections
are not created by the Fourteenth Amendment, but arise from and are defined by
independent sources, including state law.
Id. We therefore look first to state law to
determine whether Pulte had a constitutional property interest in developing its land as it
had contemplated under the 1994 Master Plan.
The Court of Appeals of Maryland has consistently stated,
9
Generally, in order to obtain a vested right in an existing zoning use that
will be protected against a subsequent change in a zoning ordinance
prohibiting that use, the owner must initially obtain a valid permit.
Additionally, in reliance upon the valid permit, the owner must make a
substantial beginning in construction and in committing the land to the
permitted use before the change in the zoning ordinance has occurred.
Md. Reclamation Assocs., Inc. v. Harford Cty.,
994 A.2d 842, 868 (Md. 2010) (citations
omitted). It is undisputed that Pulte had neither obtained a permit nor begun construction
at the time the Amendment was adopted. 1 And it is clear that Maryland law does not
create any constitutional right to water or sewer service. Neifert v. Dep’t of Env’t.,
910
A.2d 1100, 1122 (Md. 2006); see also
Quinn, 862 F.2d at 439-40; Front Royal & Warren
Cty. Indus. Park Corp. v. Town of Front Royal,
135 F.3d 275, 286-87 (4th Cir. 1998).
Moreover, under a long line of this court’s precedent, the considerable discretion
afforded to the County and Commission by the 1994 Master Plan undermines Pulte’s due
process claims. See, e.g.,
Biser, 991 F.2d at 104; Gardner v. City of Balt. Mayor & City
Council,
969 F.2d 63, 64 (4th Cir. 1992). Just last year, in Siena Corp. v. Mayor & City
Council of Rockville, Maryland,
873 F.3d 456, 463 (4th Cir. 2017), this court reiterated
the longstanding rule that any “significant discretion” left to “zoning authorities defeats
the claim of a property interest.” Siena involved a zoning change that prohibited the
1
While there is some suggestion that Maryland might be willing to apply the
doctrine of zoning estoppel in certain circumstances, Md. Reclamation
Assocs., 994 A.2d
at 875, Pulte cannot show that it relied in good faith on any government action — an
essential element of zoning estoppel — because the 1994 Master Plan expressly stated
that it would likely be revised and that the County could defer action on water and sewer
change applications. But even if zoning estoppel applied here, it would not create a
constitutional property interest. Biser v. Town of Bel Air,
991 F.2d 100, 104 (4th Cir
1993).
10
construction of self-storage facilities near a school. We noted, as we had many times
before, that zoning is inherently discretionary.
Id. at 462. Because the zoning authority
retained discretion to grant or deny applications for building permits, the landowner’s
claims under the Fourteenth Amendment failed.
Years earlier, in Sylvia Development Corp. v. Calvert County, Maryland,
48 F.3d
810 (4th Cir. 1995), we considered a dispute involving transferable rights similar to those
at issue in this case. The property at issue in Sylvia had not yet been designated as a
receiving area for transferable rights, but the developer had argued that it possessed a
property interest in obtaining such a designation because it had met all the requirements
listed in the applicable ordinances. In ruling against the developer, we stated that
although the developer may have “believe[d] that if it satisfied the stated criteria, it would
receive” a transfer zone district designation allowing it to build with increased density,
“that belief [was] at best a mere unilateral expectation, because the question of whether
criteria are met must be resolved by the exercise of judgment.”
Id. at 826 (internal
quotation marks and citation omitted). Because the developer in Sylvia had no legitimate
claim of entitlement to the transfer zone designation, its due process claim failed.
Here, too, Pulte cannot show that the County or Commission deprived it of any
constitutionally protected property interest. The 1994 Master Plan placed large discretion
in the hands of the local authorities, as is to be expected when it comes to zoning, an
“inescapably [] political function.”
Id. at 828. The 1994 Master Plan plainly apprised all
who read it that it was intended to be revised about every ten years and that even after
prerequisites had been satisfied, the County could delay action on water and sewer
11
change applications, conduct further studies, or take whatever land use actions it deemed
necessary. It is hard to imagine a land use plan granting greater discretion to local
officials. Because the 1994 Master Plan gave the appellees discretion to adopt the
Amendment and to take the other actions they took with respect to Pulte’s land, Pulte’s
procedural and substantive due process claims are not viable. 2
B.
We turn next to Pulte’s equal protection claim. Pulte has not alleged it was
deprived of a fundamental right or subjected to discrimination based on a suspect
classification. Therefore, we will uphold the distinctions drawn by the County and
Commission if they were “rationally related to a legitimate state interest.”
Siena, 873
F.3d at 465 (internal quotation marks and citation omitted). Under this standard, a
government entity “need not actually articulate at any time the purpose or rationale
supporting its classification,” and it is not required to produce evidence showing the
rationality of its classification. Heller v. Doe,
509 U.S. 312, 320 (1993) (internal
quotation marks and citation omitted). Choices like those challenged here are “not
subject to courtroom fact-finding and may be based on rational speculation unsupported
by evidence or empirical data.” FCC v. Beach Commc’ns, Inc.,
508 U.S. 307, 315
(1993). The zoning authorities’ decision “must be upheld against equal protection
2
In light of our conclusion that Pulte had no constitutional property interest in
developing its land as it had contemplated or in having its water and sewer change
application processed, we need not reach Pulte’s argument that the lower court erred in
dismissing Pulte’s substantive due process claim on the ground that the appellees acted
rationally and the Amendment was not arbitrary and capricious.
12
challenge if there is any reasonably conceivable state of facts that could provide a rational
basis for the classification.”
Id. at 313. The test is not a subjective one.
Siena, 873 F.3d
at 465. “The actual motivation for the [local government’s] actions [is] irrelevant.” Tri-
Cty. Paving, Inc. v. Ashe Cty.,
281 F.3d 430, 439 (4th Cir. 2002).
Pulte first argues that the district court should not have considered the Amendment
and statements contained therein in deciding the Motion for Judgment on the Pleadings
because the Amendment was neither attached to nor integral to the Complaint, and the
fact that it was prepared by the defendants renders it untrustworthy. That argument is
unavailing. In Goines v. Valley Community Services Board,
822 F.3d 159 (4th Cir.
2016), we discussed in detail when it is appropriate for a district court to accept as true
statements in documents attached to or incorporated into a complaint. “[B]efore treating
the contents of an attached or incorporated document as true,” we admonished, “the
district court should consider the nature of the document and why the plaintiff attached
it.”
Id. at 167. “[I]n cases where the plaintiff attaches or incorporates a document for
purposes other than the truthfulness of the document, it is inappropriate to treat the
contents of that document as true.”
Id.
The purpose for which the document is offered is particularly
important where the document is one prepared by or for the defendant.
Such unilateral documents may reflect the defendant’s version of contested
events or contain self-serving, exculpatory statements that are unlikely to
have been adopted by the plaintiff. Treating the contents of such a
document as true simply because it was attached to or relied upon in the
complaint, even though the plaintiff relied on it for purposes other than
truthfulness, would be contrary to the concept of notice pleading and would
enable parties to hide behind untested, self-serving assertions.
Id. at 168 (internal quotation marks and citation omitted).
13
In this case, the district court did not accept the Amendment’s assertions as true
for purposes of ruling upon Pulte’s equal protection claim. It had no need to consider the
truth of the Amendment’s statements because their truthfulness was beside the point. The
district court was right to look to the Amendment because Pulte had alleged that the
Amendment, a legislative document of public record, violated its constitutionally
protected rights. If the Amendment reveals any rational reason for its adoption, it passes
rational basis review even if its purported rationale was not the actual motivation behind
it.
The Amendment articulates in detail environmental concerns that are specific to
Pulte’s property and gives reasons for imposing a low impervious cap and a high open
space requirement on Pulte’s land alone. Pulte’s disagreement with those reasons and the
science underlying them does not give rise to an equal protection claim. Pulte contends
that it was treated differently from the other parcels of land in the Ten Mile Creek
watershed, which it maintains were similarly situated. But in the Council and
Commission’s estimation, Pulte’s land differed from these other parcels in important
ways, including size, location, and the fact that several particularly sensitive tributaries of
Ten Mile Creek originate on and flow through Pulte’s land. These are rational
distinctions, even if they were not the real reasons for treating Pulte’s land differently.
It is not this court’s place to second-guess the wisdom of elected local officials in
making inherently discretionary zoning decisions. As the Supreme Court has explained,
There are some forms of state action, however, which by their nature
involve discretionary decisionmaking based on a vast array of subjective,
individualized assessments. In such cases the rule that people should be
14
‘treated alike, under like circumstances and conditions’ is not violated
when one person is treated differently from others, because treating like
individuals differently is an accepted consequence of the discretion granted.
In such situations, allowing a challenge based on the arbitrary singling out
of a particular person would undermine the very discretion that such state
officials are entrusted to exercise.
Engquist v. Or. Dep’t of Agric.,
553 U.S. 591, 603 (2008). Local land use decisions are a
quintessential example of subjective and individualized action by decisionmakers vested
with the discretion needed to balance competing interests.
“When those who appear similarly situated are nevertheless treated differently, the
Equal Protection Clause requires at least a rational reason for the difference . . . .”
Id. at
602. The County and Commission provided rational reasons for treating Pulte’s land
differently, and that is the end of our inquiry. Pulte has not carried its “heavy burden of
negating every conceivable basis which might reasonably support the challenged
classification.” Van der Linde Housing, Inc. v. Rivanna Solid Waste Auth.,
507 F.3d 290,
293 (4th Cir. 2007). The district court properly entered judgment on the pleadings in
favor of the County and Commission on Pulte’s equal protection claim.
C.
The district court also concluded that Pulte could not demonstrate that the actions
of the County and Commission amounted to a compensable regulatory taking of Pulte’s
property under the Fifth Amendment to the United States Constitution. The Takings
Clause of the Fifth Amendment prohibits the taking of private property without just
compensation. Lingle v. Chevron U.S.A., Inc.,
544 U.S. 528, 536 (2005). Pulte has not
15
alleged a total or per se taking of its land by the government, but rather a regulatory
burden on its property that it contends rises to the level of a taking.
Just last year, the Supreme Court reiterated the standard for analyzing a regulation
that does not deprive an owner of all economic use of its property. Murr v. Wisconsin,
137 S. Ct. 1933, 1943 (2017). In assessing whether the regulation effects a taking, courts
consider “(1) the economic impact of the regulation on the claimant; (2) the extent to
which the regulation has interfered with distinct investment-backed expectations; and (3)
the character of the governmental action.”
Id. (reciting the factors set forth in Penn Cent.
Transp. Co. v. City of New York,
438 U.S. 104, 124 (1978)).
The Supreme Court has said that where a due process claim is unsuccessful, “it
would be surprising indeed to discover the challenged statute nonetheless violat[es] the
Takings Clause.” Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr.
for S. Cal.,
508 U.S. 602, 641 (1993) (internal quotation marks and citation omitted); see
also Henry v. Jefferson Cty. Comm’n,
637 F.3d 269, 276 (4th Cir. 2011) (“[W]e are
reluctant to push the notion that the denial of a permit in which one has no property
interest can somehow amount to an unconstitutional taking.”). Having already concluded
that Pulte had no property interest in having its water-sewer application processed or
developing its land as it had contemplated, we begin our application of the Penn Central
factors with a skeptical eye toward Pulte’s takings claim. In prior land use cases, this
court has stated that an interest in obtaining sewer service “is nothing but an inchoate
interest in the conferral of a benefit to enhance market value,” Front
Royal, 135 F.3d at
286, and that “[t]he Takings Clause simply does not create an affirmative obligation for
16
local governments to make good on speculative private investments or to increase
property owners’ land value,” Quinn,
862 F.3d 439-40.
As to the first Penn Central factor, Pulte did not plead the exact diminution in
value it alleges its property has suffered as a result of the Amendment and the local
authorities’ other actions. It concedes, however, that it can still develop approximately
seventeen percent of its land, or 93 of its 540 acres. Even if we assume that Pulte has
suffered an eighty-three percent diminution in the value of its property, that is not enough
on its own to establish a taking. The Supreme Court has stated that “mere diminution in
the value of property, however serious, is insufficient to demonstrate a taking.” Concrete
Pipe, 508 U.S. at 645; see also MHC Fin. Ltd. P’ship v. City of San Rafael,
714 F.3d
1118, 1127 (9th Cir. 2013) (holding that an eighty-one percent diminution in value was
not sufficient to constitute a regulatory taking). We have said that “[a] regulation is not a
taking merely because it prohibits the most beneficial use of the property.”
Quinn, 862
F.3d at 442 (internal quotation marks and citation omitted). While the challenged zoning
actions might prevent Pulte from building the lucrative development it envisioned, it is
undisputed that Pulte remains able to construct a sizeable residential community on its
land. Pulte also remains free to sell its unused TDRs to another developer for use in
another location, allowing it to recoup at least some portion of its twelve million dollar
TDR investment.
Regarding the second Penn Central factor, Pulte purchased undeveloped land that
did not have water and sewer access at the time of the purchase. It may have wished to
build a certain number of dwellings on the land, but the plain language of the 1994
17
Master Plan informed Pulte that there was no guarantee that the land would maintain its
existing zoning classification or that a water and sewer change application would be
granted. The text of the 1994 Master Plan stated that the County could take certain steps
to “protect the environmentally fragile Ten Mile Creek watershed” and could, in its
discretion, defer action on pending applications to allow further studies. J.A. 312. It was
no secret that Pulte’s land was not only within the Ten Mile Creek watershed but that
tributaries to Ten Mile Creek originated on and flowed through Pulte’s land. If Pulte
expected to easily obtain approval to construct approximately one thousand homes there,
that expectation was not reasonable in light of the text of the 1994 Master Plan. Pulte had
only a hope, not a legally cognizable expectancy. Pulte’s purchase here was no less
speculative than the purchase in Quinn, where we held that the landowner had failed to
establish a compensable regulatory
taking. 862 F.3d at 439-40.
Turning to the third Penn Central factor, this court recently noted that
“[m]anaging the density of development — even if it disappoints a particular developer
— is thus a crucial goal of land use planning” and generally does not amount to a taking.
Id. at 441. Local zoning authorities must have the ability to protect important natural
resources and the interests of their local communities through reasonable land use
restrictions without being forced by federal courts to pay compensation to every
frustrated developer that had hoped to maximize its bottom line. Development
restrictions designed to protect a vulnerable watershed and source of drinking water are
an entirely appropriate form of local regulation, and they are unlikely to amount to a
18
regulatory taking particularly where, as here, the landowner is not left with a mere token
interest but instead can still develop its property.
The district court properly applied the Penn Central factors and concluded, in
accord with past decisions of this court, that Pulte was unable to establish that the
regulatory actions of the County and Commission amounted to a taking of Pulte’s
property under the Fifth Amendment. We agree with the district court’s analysis and will
affirm its ruling.
D.
Finally, Pulte complains that the lower court erred in dismissing its claim under
Article 19 of the Declaration of Rights of the Maryland Constitution. Article 19, entitled
“Relief for injury to person or property,” states
[t]hat every man, for any injury done to him in his person or property,
ought to have remedy by the course of the Law of the Land, and ought to
have justice and right, freely without sale, fully without any denial, and
speedily without delay, according to the Law of the Land.
Md. Const. art. 19. The article protects two rights: “(1) a right to a remedy for an injury
to one’s person or property; (2) a right of access to the courts.” Jackson v. Dackman Co.,
30 A.3d 854, 866 (Md. 2011) (internal quotation marks and citation omitted). “Article 19
. . . has no counterpart in the United States Constitution, and most of [the] opinions
interpreting and applying Article 19 have not relied on cases applying dissimilar
provisions of the United States Constitution.” Dua v. Comcast Cable of Md., Inc.,
805
A.2d 1061, 1071 (Md. 2002).
19
The district court concluded that because Pulte had no protected property interest,
it had no claim under the first right. As to the second right, the district court held that it
had not infringed upon Pulte’s access to the courts because it was not ruling that the
defendants were immune from suit or that Pulte failed to clear procedural hurdles to
access the courts. Rather, said the district court, Pulte had been granted access to the
courts, and its claims were considered and found to be deficient.
Pulte has alleged that the County and Commission violated Article 19 by actively
preventing Pulte’s rights from vesting, thereby thwarting its due process claims. By
delaying to act on Pulte’s water and sewer change application, Pulte argues that the
appellees essentially immunized themselves from suit. Pulte contends that Article 19 is
broader than the Due Process Clause, and that the lack of a constitutional property
interest is irrelevant to an Article 19 claim.
We can find no support for Pulte’s claim in Maryland jurisprudence. The County
and Commission did not immunize themselves from suit. They merely acted as the 1994
Master Plan permitted. Pulte asserted its claims and the district court considered and
dismissed them after applying controlling precedent. The local authorities did not violate
the Maryland Constitution simply by exercising the discretion vested in them by the 1994
Master Plan. To hold otherwise would place Maryland zoning authorities in an
impossible bind. The district court correctly dismissed Pulte’s Article 19 claim.
III.
“Resolving the routine land-use disputes that inevitably and constantly arise
among developers, local residents, and municipal officials is simply not the business of
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the federal courts.”
Gardner, 969 F.2d at 67. We recognize that Pulte originally filed
this case in state court, but by asserting federal constitutional claims, it practically
assured that the case would be removed to federal court. Pulte could have challenged the
local authorities’ actions through the applicable state administrative appeals process, and
it could have crafted its state court complaint in a way that would have avoided the
entirely predictable result here. Instead, Pulte, like many landowners and developers
before it, is attempting to use a bevy of federal constitutional claims to displace state law
and local decisionmaking.
Local zoning authorities must have the ability to respond to constantly changing
environmental, economic, and social conditions, and we are unwilling to tie their hands
by finding a constitutional property interest under the circumstances presented here, or
requiring them to treat every property in a vulnerable watershed identically, or forcing
them to pay compensation to every disappointed developer whose land has been
downzoned. To hold otherwise would be to invade the province of state law and render
local officials unable to make the important decisions they were elected to make.
We find no error in the district court’s rulings, and its judgment is therefore
AFFIRMED.
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