JOHN W. deGRAVELLES, District Judge.
This matter is before the Court on the Motion for Summary Judgment Pursuant to Fed. R. Civ. P. 56 Filed by City of Baton Rouge/Parish of East Baton Rouge (Doc. 62) submitted by the Defendants, the City of Baton Rouge/Parish of East Baton Rouge ("City/Parish") and the Planning and Zoning Commission for the City of Baton Rouge/East Baton Rouge Parish ("Planning Commission") (collectively, the "Defendants"). The Plaintiffs George W. Robinson, Jr., and Demetra Parson Robinson (collectively, the "Plaintiffs") oppose the motion. (Doc. 73.) Oral argument is not necessary.
Having carefully considered the law, facts in the record, and arguments of the parties, the motion is granted in part and denied in part.
The Plaintiffs are real estate developers who attempted to develop a subdivision within the City/Parish. Pursuant to state and local law, they submitted a preliminary plat for approval to the City/Parish's Planning Commission. The Planning Commission denied approval. This suit ensued.
The Plaintiffs claim they suffered a number of violations of their federal and state constitutional rights. Specifically, the Plaintiffs assert (1) an inverse condemnation claim under the Fifth and Fourteenth Amendments; (2) an unconstitutional taking claim under Article I, Section 4 of the Louisiana Constitution; (3) a substantive due process claim under the Fourteenth Amendment; (4) a claim for denial of procedural due process under the Fourteenth Amendment; and (5) a claim under 42 U.S.C. § 1983 under Monell v. Department of Social Services, 436 U.S. 658, 98 S. Ct. `, 56 L. Ed. 2d 611 (1978). The Defendants seek to have each of these claims dismissed.
The Court has carefully reviewed the briefs and evidence submitted by the parties as well as the applicable law. Having done so, the Court makes the following rulings:
The Court grants the Defendants' motion with respect to the substantive due process claim. The Court finds that all reasonable jurors would conclude that the reasons for the Planning Commission denying approval of the preliminary plat were the commissioners' concerns about issues like fill mitigation/elevation, flooding, and drainage. The Court further finds that, as a matter of law, these reasons were rationally related to legitimate governmental interests like public health, safety, and the general welfare. As a result, the Plaintiffs' substantive due process claim fails.
The Court also grants the Defendants' motion with respect to the procedural due process claim. The key issue here is whether, as a matter of state law, the Plaintiffs' had a legitimate claim of entitlement to approval of their preliminary plat. This question turns on whether the Planning Commission had discretion, which turns on whether it was very likely or certain the Plaintiffs would receive approval. State law recognizes that the Planning Commission has discretion if it does not act arbitrarily and capriciously and bases its decision on legitimate reasons. Since this Court has determined that the Planning Commission did not act arbitrarily and capaciously and did in fact base its decision on legitimate reasons, the Planning Commission had discretion to deny approval. That is, as a matter of state law, it was not certain or very likely the Plaintiffs would receive approval, so they had no legitimate claim to entitlement. Consequently, the Plaintiffs cannot prevail on their procedural due process claim.
The takings claims are ripe. A takings claim is not ripe (1) until the relevant governmental unit has reached a final decision as to what will be done with the property, and (2) until the plaintiff has sought compensation through whatever adequate procedures the state provides. As to the first requirement, the Planning Commission reviewed the Plaintiffs' preliminary plat, sought additional information, was provided same, and then rendered a final decision denying approval. The Defendants have not identified an avenue (be it through regulation or law) that the Plaintiffs should have pursued but did not. The Defendants argue the Plaintiffs should have sought judicial review, but the Plaintiffs did in fact seek a mandamus, which this Court denied. Thus, The Plaintiffs obtained a final decision from the Planning Commission. As to the second ripeness requirement, the Defendants have waived any objection to it by removing the Plaintiffs' state court inverse condemnation proceeding to this Court. Accordingly, the Defendants' ripeness arguments are rejected.
However, the Court grants the Defendants' motion with respect to the Plaintiffs' categorical takings (Lucas) claim. To prevail, the Plaintiffs must show that they lost all value in the property. In short, they did not. The Plaintiffs sold their property for over one million dollars. No reasonable juror would find that they lost all value. Further, even if the relevant question was whether the Plaintiffs had any economic use of their property, their claim would still fail. It is undisputed they obtained preliminary plat approval to build a subdivision on part of the property at issue. Thus, under either standard, the Plaintiffs' claim fails.
Nevertheless, the Court finds that there are genuine issues of material fact precluding summary judgment on the Plaintiffs' as applied takings claim. The viability of this claim depends on the factors set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L. Ed. 2d 631 (1978), which include (1) the economic impact of the regulation, (2) the extent to which the regulation has interfered with distinct investment backed expectations, and (3) the character of the government action. The Plaintiffs have submitted evidence such that a reasonable juror could find that the first two factors weigh in their favor. While the third factor weighs in favor of the Defendants, this merely demonstrates how this fact-intensive question is best decided by a jury.
The Court also denies the Defendants' motion with respect to the Monell claim. Under Fifth Circuit case law, a plaintiff may establish a policy based on an isolated decision if the decision was made by an authorized policymaker in whom final authority rested regarding the action ordered. Here, the Planning Commission was a policymaker for § 1983 purposes, and its decision to reject that Plaintiffs' preliminary plat constituted a policy under the above standard. Further, this action was the driving force of the surviving alleged constitutional violation. Accordingly, the Monell claim survives.
Lastly, the Court denies summary judgment as to the state law takings claim. Under Louisiana law, a regulatory taking occurs when a regulation destroys a major portion of the property's value or eliminates the practical economic uses of the property. Here, the Plaintiffs have submitted evidence demonstrating that their property lost about $1.3 million worth of value. A reasonable juror could conclude, even with the sale of most of the property, that the Plaintiffs were denied a major portion of the property's value.
Plaintiffs George W. Robinson, Jr., and Demetra Parson Robinson are real estate developers who have developed numerous subdivisions in East Baton Rouge Parish and the surrounding parishes over the past thirty-five years. (See Doc. 73-10 at 1.) The Plaintiffs owned a 101.96 acre tract of land within the City/Parish. (See id. at 2.)
The Defendant Planning Commission is an entity created pursuant to Louisiana Revised Statute 33:101 et seq. (Doc. 62-2 at 1; Doc. 73-1 at 1.) The Planning Commission is charged with, among other things, the responsibility to review and approve of subdivision plats. (Doc. 62-2 at 1; Doc. 73-1 at 1.)
In 1996, the East Baton Rouge Parish Metropolitan Council, which is the governing authority for the City/Parish, adopted the Unified Development Code ("UDC"), which consolidated into one volume all existing regulations related to land development within the Parish of East Baton Rouge. (Doc. 62-2 at 1; Doc. 73-1 at 1-2.) While not facts per se, the Court finds that an overview of the UDC will be useful in framing the issues of this ruling.
The UDC provides in its opening paragraph:
(UDC § 1.1, Doc. 73-2 at 1, also available at
(UDC § 3.04(B), Doc. 73-2 at 5.)
Section 4.102 of the UDC is entitled "Subdivision Review and Procedures." (Doc. 73-2 at 9.) Under this regulation, an applicant first presents prints of a proposal to staff at a pre-application conference, and the staff "informs the applicant of procedures and required items necessary to complete the application package and review Preliminary Plat Checklist items." (UDC § 4.102(A), Doc. 73-2 at 9.) The UDC then provides the following concerning preliminary plans:
(UDC § 4.102(B), Doc. 73-2 at 9.)
The Planning Commission "shall hold a public hearing on all major subdivisions and minor subdivisions with waivers." (UDC § 4.102(C), Doc. 73-2 at 9.) "Upon approval by the Planning Commission, the Planning Director or his designee will return to the applicant an approved copy of the preliminary plan." (Id.)
The applicant must confer with the Department of Public Works and the Parish Health unit "to determine the standards and specifications, which shall govern proposed improvements." (UDC § 4.102(D), Doc. 73-2 at 10.) After approval of the preliminary plat by the Planning Commission, he must submit "complete construction plans for the first or initial development of the area given preliminary approval" along with other information to the Department of Public Works "for their review and approval." (Id.) No construction work can be done until the completed construction plans have been approved by the Department of Public Works, and "a reasonable time must be allocated for the proper study of the plans submitted." (Id., Doc. 73-2 at 10-11.) Then, the applicant proceeds with preparation of a final plat. (Id.)
The UDC further provides:
(UDC § 4.102(F), Doc 73-2 at 11.) After a preconstruction meeting with the Department of Public Works, a permit is issued, and construction can begin. (UDC § 4.102(G), Doc 73-2 at 11.)
After construction is complete, the improvements are accepted and approved by the Department of Public Works and the Secretary of the Planning Commission. (UDC § 4.102(H), Doc. 73-2 at 13-14.) The final plat is then checked for conformity with the preliminary plans and Section 4.6 of the UDC (governing final plats), and it cannot be approved until there has been compliance with all stipulations of the Planning Commission and Department of Public Works. (UDC § 4.102(I), Doc. 73-2 at 14.) After approval, the final plat is filed to the Director of the Planning Commission. (UDC § 4.102(J), Doc. 73-2 at 14.)
Section 4.03 of the UDC specifically addresses preliminary plats. This section provides:
(UDC § 4.03, Doc. 73-2 at 21.) The preliminary plat normally includes the title under which the proposed subdivision is to be recorded; boundary lines and existing improvements; designation of lots; names of all abutting subdivisions; features of the proposed subdivision; sewers, water lines, and storm water management; the location of all existing and proposed servitudes and public utilities, streets, special use areas such as proposed parks, playgrounds, and churches; a north point, scale, and date; a vicinity map; flood elevation data, all public servitudes and all private servitudes intended for public use; a storm water management plan; and a drainage impact study; and a water quality study. (Id., Doc. 73-2 at 21-24.)
Additionally, UDC § 4.103 provides in part:
(UDC § 4.103(A)(2), Doc 73-2, at 15.) The UDC then has specific provisions concerning drainage improvements. (UDC § 4.103(A)(2)(e), Doc 73-2, at 15-16.) As one Planning Commission member testified, the Department of Public Works makes recommendations to the Planning Commission with respect to drainage, traffic, and sewer impact. (Doc. 73-5 at 3.)
On October 11, 2012, the Plaintiffs submitted a preliminary plat to the Planning Commission for a proposed cluster subdivision to be developed on approximately 57.5 acres of their larger 101.96 acre tract. (Doc. 62-2 at 2; Doc. 73-1 at 9; Doc. 73-10 at 2.) This proposed cluster subdivision was named Mallard Trails. (Doc. 62-2 at 2; Doc. 73-1 at 9.)
Plaintiffs have submitted evidence highlighting the ways in which the preliminary plat complied with UDC and other requirements. The property was zoned for rural, and the Mallard Trails would have complied with those zoning requirements. (Doc. 73-4 at 18; Doc. 73-5 at 4, 7; Doc. 73-6 at 6.) Moreover, the Planning Commission staff recommended that Plaintiffs' preliminary plat be approved and felt that it met all the requirements of the UDC. (Doc. 73-4 at 20, 41; Doc. 73-5 at 6; Doc. 73-7 at 19.) The Department of Public Works recommended approval, provided that its comments were addressed and written into the Planning Commission approval; however, these items were not going to be done prior to the Planning Commission's vote. (Doc. 73-5 at 6; Doc. 73-6 at 8.) One Planning Commission member even admitted that the project "exceeded all of the UDC requirements" and that there were no requirements that the developers did not meet with respect to this preliminary subdivision plat. (Doc. 73-5 at 18-19.)
Pursuant to the UDC, the public hearing regarding the application for the Mallard Trails preliminary plat was placed on the agenda for the November 13, 2012, meeting of the Planning Commission. (Doc. 62-2 at 2; Doc. 73-1 at 9.) The hearing was postponed several times.
On January 22, 2013, a public hearing regarding the application for Mallard Trails' preliminary plat was held and attended by the Plaintiffs as well as members of the public. (Doc. 62-2 at 3; Doc. 73-1 at 2.) The following commissioners attended the hearing: Tara Wicker, Darius Bonton, Sarah Holiday-James, Laurie Marien, Steven Perret, John Price, and Martha Tassin. (Doc. 62-2 at 3; Doc. 73-1 at 2.)
Several individuals spoke in favor of approving the preliminary plat application. (Doc. 62-2 at 3-5; Doc. 73-1 at 10.) Among other things, the Plaintiffs' engineer, G. Wayne Sledge, made the following statements:
(Doc. 62-2 at 3-4; Doc. 73-1 at 10.)
Plaintiff George Robinson also participated in the hearing and spoke in favor of approving the preliminary plat application. (Doc. 62-2 at 4; Doc. 73-1 at 10.) While setting forth his reasons as to why the project should be approved, he stated the following:
(Doc. 62-2 at 4-5; Doc. 73-1 at 11.)
Vera Martin, a local resident, spoke in favor of the approval. (Doc. 62-2 at 5; Doc. 73-1 at 11.) Martin stated that she "feel[s] that they should be able to go ahead with their property." (Doc. 62-2 at 5; Doc. 73-1 at 11.)
However, five other local residents spoke in opposition to the approval. (Doc. 62-2 at 5; Doc. 73-1 at 11.) Fred Matthews lives on Hoo Shoo Too Road, and he expressed concerns about detrimental flooding, poor drainage, and dangerous traffic. (Doc. 62-2 at 5; Doc. 73-1 at 11.)
Brent Rhodes is a local real estate developer who developed the Mallard Lakes subdivision, which was across from Plaintiffs' proposed subdivision. (Doc. 62-2 at 5; Doc. 73-1 at 11.) Rhodes opined that the Plaintiffs' proposed subdivision was a bad development and expressed concerns about poor drainage and dangerous traffic. (Doc. 62-2 at 5; Doc. 73-1 at 11.)
Pepper Allgood lives on Hoo Shoo Too Road. (Doc. 62-2 at 5; Doc. 73-1 at 11.) He stated that approval should fail because no drainage impact study was provided with the submission of the preliminary plat in accordance with the UDC. (Doc. 62-2 at 5; Doc. 73-1 at 11.) He also expressed concerns about poor drainage, detrimental flooding, fill mitigation (i.e. placing fill in the flood plain), questionable impervious coverage, the character of the project, and dangerous traffic. (Doc. 62-2 at 5; Doc. 73-1 at 11.)
The final two members of the public were Angel McCarstle and Jerry Chapman. (Doc. 62-2 at 5; Doc. 73-1 at 11.) Angel McCarstle, a local resident, expressed concerns about the low elevation, poor drainage, dangerous traffic, and a possible subdivision restriction that burdened the property. (Doc. 62-2 at 5-6; Doc. 73-1 at 11.) Chapman, who lives on Hoo Shoo Too Road, expressed concerns about a possible subdivision restriction that burdened the property. (Doc. 62-2 at 6; Doc. 73-1 at 11.)
The Plaintiffs contend that there was no technical data or expert analysis presented adverse to the Plaintiffs' application. The Plaintiff George Robinson attests to this fact. (Doc. 73-10 at 3.) Commissioners Price, Perret, and Marien appear to confirm this. (See, infra.) However, the Plaintiff's engineer appeared to make some statements (referenced above) that were in fact adverse. This issue will be more fully explored below.
Four commissioners expressed the following concerns at the hearing: Commissioner Price, about fill mitigation/elevation and flooding; Commissioner Perret, about drainage and flooding; Commissioner Tassin, about accessibility and traffic and about drainage and flooding; and Commissioner Marien, about connectivity. (Doc. 62-2 at 6; Doc. 73-1 at 11.)
After making a lengthy statement about the approval process, Commissioner Darius Bonton moved to approve the Plaintiffs' application; however, none of the other six (6) commissioners seconded his motion; therefore, it died for lack of a second. (Doc. 62-2 at 6; Doc. 73-1 at 12.) Commissioner Price moved to defer the application, and this motion was seconded by Commissioner Bonton. (Doc. 62-2 at 6-7; Doc. 73-1 at 12.) Commissioner Tassin moved to deny the application, and this motion was seconded by Commissioner Marien. (Doc. 62-2 at 7; Doc. 73-1 at 12.) Commissioner Price stated that the application "didn't look like it was going to be approved tonight, and rather than have it die today" allowed Plaintiffs an opportunity to alleviate the panel's concerns. (Doc. 62-2 at 7; Doc. 73-1 at 12.) Thus, a vote on the preliminary plat was deferred for sixty (60) days on the motion of the commissioners. (Doc. 62-2 at 7; Doc. 73-1 at 2.)
On April 22, 2013, the preliminary plat came back before the Planning Commission wherein the approval of the preliminary plat failed for lack of five affirmative votes. (Doc. 62-2 at 7; Doc. 73-1 at 3.) Four planning commissioners voted in favor of approval. (Doc. 62-2 at 7; Doc. 73-1 at 3.) Four planning commissioners voted against approval, and these included Laurie Marien, Steven Perret, John Price, and Martha Tassin. (Doc. 62-2 at 7; Doc. 73-1 at 3.) One commissioner was absent. (Doc. 62-2 at 7; Doc. 73-1 at 3.) The basis for the decision of those members who voted against approval will be addressed in more detail below.
The Defendants dispute the significance of certain issues related to the Plaintiffs' conduct after the denial of the preliminary plat but before suit was filed. First, after the denial, the Plaintiffs did not submit any other proposed preliminary applications. (Doc. 62-2 at 7.) Plaintiffs admit this is true but maintain it is irrelevant. (Doc. 73-1 at 12.)
Second, the Defendants assert that Plaintiffs failed to seek judicial review pursuant to La. Rev. Stat. § 49:964 of Louisiana's Administrative Procedure Act, La. Rev. Stat. § 49:950 et seq. (Doc. 62-2 at 7.) The Plaintiffs argue that this is a legal conclusion and is irrelevant, for reasons discussed below. (Doc. 73-1 at 5.)
On May 7, 2013, Plaintiffs filed suit in state court against the Defendants, along with the four individual Planning Commission members. (Doc. 1-2 at 1.) On June 12, 2013, the Defendants removed the action to this court. (Doc. 1.)
In the Petition, in addition to the other claims discussed above, the Plaintiffs sought a writ of mandamus requiring the Planning Commission to approve the preliminary plat. (Doc. 1-2 at 6-7.) This Court denied the Plaintiffs' mandamus claim in its ruling on the Defendants' motion to dismiss. (Doc. 36 at 10-11.)
Additionally, after suit was filed and beginning in September 2013, in about eight separate transactions, the Plaintiffs sold a majority of the 57.5 acres that would have comprised Mallard Trails. (Doc. 62-2 at 8-10; 73-1 at 8-9.) The Defendants submit evidence that the Plaintiffs received at least $1.2 million for these sales and that this was profit. (Doc. 62-2 at 8-10.)
The Plaintiffs do not dispute receiving that amount from selling portions of the 57.5 acres as vacant and undeveloped tracts, but they do dispute the interpretation and significance of these amounts. (Doc. 73-1 at 7-8; Doc. 73-10 at 3.) The Plaintiffs argue that the Defendants have submitted no evidence supporting the conclusion that the above amount was net profit (i.e., gross profit minus costs). (Id.) The Plaintiffs also submit evidence that, had the project been allowed to proceed, they would have earned a net profit of about $1.3 million above and beyond the value of the vacant land — that is, net profit from the sale of residential lots. (Doc. 73-10 at 3; Doc 72-7 at 22.)
Lastly, the parties do not dispute that, in November 2013, the Plaintiffs submitted to the Planning Commission for approval a preliminary plat for a subdivision that contained part of the land encompassing the proposed Mallard Trails subdivision. (Doc. 62-2 at 8; Doc. 73-1 at 8.) In January 2014, the Plaintiffs' preliminary plat for a subdivision received unanimous approval from the Planning Commission. (Doc. 62-2 at 8; Doc. 73-1 at 8.) The parties dispute the significance of this fact, and the Court will discuss it in more detail below.
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). If the mover bears his burden of showing that there is no genuine issue of fact, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts . . . [T]he nonmoving party must come forward with `specific facts showing that there is a genuine issue for trial.'" See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L. Ed. 2d 538 (1986) (internal citations omitted). The non-mover's burden is not satisfied by "conclusory allegations, by unsubstantiated assertions, or by only a `scintilla' of evidence." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations and internal quotations omitted). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita Elec. Indus. Co., 475 U.S. at 587. Further:
International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263 (5th Cir. 1991).
The Defendants describe the Plaintiffs' allegations of a substantive due process violation as "unequivocally baseless." (Doc. 62-1 at 13.) The Defendants are specifically referring to the Plaintiffs' claim that the Planning Commission relied solely on public opposition in making their decision and that the Defendants' reasons for denying the preliminary plat were arbitrary and capricious and an unreasonable exercise of police power.
The Defendants argue that the rational relationship test should be applied and that, at the public hearing, the commissioners voting against the project "collectively expressed concerns about drainage, flooding, fill mitigation/elevation, traffic, emergency vehicle accessibility, and connectivity, which are all legitimate reasons that bear a substantial relationship to the public's health, safety, morals, and general welfare." (Doc. 62-1 at 14.) The Defendants contend this is confirmed by the depositions of these commissioners. Moreover, the Defendants assert that, "[d]uring his deposition, Plaintiff, Mr. Robinson, acknowledged that the Planning Commission raised legitimate concerns about his project" and that he "repeatedly conceded that the Commissioners concerns were well placed." (Doc. 62-1 at 14.) The Defendants conclude by stating that the reasons cited by the Defendants at the "public hearing bear no hint of arbitrary and capricious conduct," are in fact "substantially related to the general welfare of the community[,] and "undoubtedly provide a `conceivable legitimate governmental objective that is at least debatable.'" (Doc. 62-1 at 15.)
The Plaintiffs first rely on this Court's holding on the Defendants' motion to dismiss (Doc. 36) and claim that, if the Planning Commission's decision were based solely on public opposition, such a decision would be arbitrary and capricious and thus offend substantive due process. The Plaintiffs assert that one of the commissioners who voted to deny the project agreed:
(Doc. 73 at 10 (quoting Doc. 73-6 at 16).)
The Plaintiffs contend that the Defendants cite only to "(1) statements made by the public at the hearing, and (2) the subjective `concerns' expressed by the [Planning Commission] about flooding, drainage, and traffic in the vicinity of the Mallard Trails Project." (Doc. 73 at 10-11.) The Plaintiffs argue that the testimony of the commissioners who voted to deny the project demonstrates that the only basis for their subjective beliefs was public opposition and that no technical or expert analysis or other objective data supported their decision. Plaintiffs claim that these "concerns" did not stop the Defendants from approving of other subdivisions near the Mallard Trails project.
The Plaintiffs assert that, "Defendants' apparent contention is that superficially well-meaning concerns about legitimate issues, even if based upon nothing more than personal opinion and public opposition and even though not applied consistently to all projects considered by Defendants, is enough to justify Defendants' action." (Doc. 73 at 11.) Again relying on the Court's previous ruling, the Plaintiffs contend that the Planning Commission must base its decision on "data presented to" it and that "such `data' cannot consist solely of public opposition." (Id.) The Plaintiffs claim that the only "data" presented by the Defendants is "statements of lay opponents of the Mallard Trails Project." (Id.) The Plaintiffs assert that a reasonable juror could find in their favor on this claim.
The Defendants dispute the Plaintiffs' contention that the Planning Commission needed to rely on "technical or expert analysis or other objective data" in making its decision, and the Defendants dispute the Plaintiffs' interpretation of the cited case law.
Rather, the key question is "whether a rational relationship exists between the [policy] and a conceivable legitimate governmental objective. If the question is at least debatable, there is no substantive due process" violation. (Doc. 76 at 6 (citing FM Properties Operating Co. v. City of Austin, 93 F.3d 167, 175 (5th Cir. 1996)).) The Defendants argue that the Planning Commission need not consider expert analysis or technical data but must rather, under state and federal law, act with purpose of "promot[ing] the health, safety, morals, or the general welfare of the community." (Id. (citing La. Rev. Stat. § 33:107; FM Properties, 93 F.3d at 174-75).)
The Defendants further contend that "data" need not be defined to mean only scientific or technical information, and, in any event, the Planning Commission considered the following "data": "The public's opposition, the recommendations from the Planning Commission staff, their personal visits to the site of the proposed project, their in-person meetings with the property owners, their requests for further studies to be conducted and, their request for a secondary access road for emergency vehicle access." (Doc. 76 at 6 (citing Doc. 62-10).) Defendants thus maintain that they did not rely on public opposition alone but rather a "plethora of legitimate reasons." (Id. at 6 n. 9.)
The Defendants finally say that the approval of other subdivisions is irrelevant; there is no information provided as to the similarities of those approved subdivisions.
The Plaintiffs respond by attacking the list of "data" considered by the Defendants. The Plaintiffs claim that "the only evidence [the Defendants] cite in support of these various `factors' is Exhibit `H' to their motion, the minutes of the January 2013 meeting in which action on the project was deferred, and these minutes reflect only `public opposition' to the development." (Doc. 80 at 4.) Thus, according to the Plaintiffs, "these new `factors' are unsubstantiated by the record and cannot comprise a basis for summary judgment." (Id.)
The Plaintiffs also argue that the record evidence concerning these factors "actually supports Plaintiffs' case." (Doc. 80 at 4 n. 4.) For instance, the Plaintiffs note that the "Defendants neglect to mention that the Planning Commission's `request for a secondary access road for emergency vehicle access' was granted by Plaintiffs, who amended their preliminary plat to include the requested access road after the January 2013 meeting." (Id. (citing Doc. 73-4 at 21).) Further, the Defendants "neglect to mention" that the Planning Commission staff recommended that the project be approved. (Doc. 80 at 4 n. 4 (citing Doc. 73 at 2 n. 5).) Nevertheless, the Defendants' denied Plaintiffs' preliminary plat application in April of 2013.
The first issue that must be addressed is the appropriate standard. The Fifth Circuit has explained:
Bush v. City of Gulfport, Miss., 454 F. App'x 270, 276 (5th Cir. 2011). Thus, the correct standard turns on whether the Planning Commission's decision about a preliminary plat is legislative or adjudicative.
The Court finds that it is adjudicative. In Homeowner/Contractor Consultants, Inc. v. Ascension Parish Planning and Zonning Commission, 32 F.Supp.2d 384 (M.D. La. 1999), this Court directly addressed the present question in the context of whether to grant individual commissioners absolute immunity. After reviewing case law from the Supreme Court and First Circuit, the Court cited the test articulated in Hughes v. Tarrant County Texas, 948 F.2d 918 (5th Cir. 1991), which stated:
Homeowner/Contractor, 32 F. Supp. 2d at 389 (citing Hughes, 948 F.2d at 920). Applying this test, the Homeowner/Contractor court concluded:
Id. While the Homeowner/Contractor court used the term "administrative" in its immunity analysis, it later used this term synonymously with "adjudicative" in its due process analysis. Id. at 391. Thus, this Court has already determined that the Planning Commission's decision to deny preliminary plat approval is adjudicative, and the Court does not disagree with that conclusion.
Accordingly, the Court will apply the standard for adjudicative decisions. "The adjudicative mode of analysis asks not whether there was some conceivable rational basis for the challenged decision, but requires a finding as to what actually motivated the decision, and then asks whether this is rationally related to a legitimate governmental purpose." Vineyard Inv., LLC v. City of Madison, Miss., 757 F.Supp.2d 607, 617 (S.D. Miss. 2010), aff'd sub nom. Vineyard Inv., L.L.C. v. The City Of Madison, Miss., 440 F. App'x 310 (5th Cir. 2011). After the actual interest is identified, the Court applies "traditional rational basis review to the action." Vineyard Inv., L.L.C., 440 F. App'x at 314. The Court first determines whether the Defendants' interest is considered a legitimate governmental interest. Vineyard Investments, L.L.C., 440 F. App'x at 314. The Court then examines whether the Government action advanced its legitimate goal. Id. As long as "the existence of a rational relationship" between the government action and the goal "is at least debatable," there is no constitutional violation. Id. (quoting FM Props., 93 F.3d at 175.)
The Court now turns to the evidence presented by the parties to determine the true purpose of the Government's action. As stated above, at the January 22, 2013, public hearing, four commissioners expressed the following concerns: Commissioner Price, about fill mitigation/elevation and flooding; Commissioner Perret, about drainage and flooding; Commissioner Tassin, about accessibility and traffic and about drainage and flooding; and Commissioner Marien, about connectivity. (Doc. 62-2 at 6; Doc. 73-1 at 11.)
At his deposition, Price testified at length about the basis for his denying the project. Price stated that he voted against the project because he "listened and heard the people who lived on Hoo Shoo Too come forth and present direct evidence of the flooding and drainage issues that they had experienced" there. (Doc. 73-4 at 22.) Price stated that he "lived in Baton Rouge for 40 years, so [he has] personal knowledge of Hoo Shoo Too Road. [He has] been out there at times when it's not flooded. [He's] been out there when [he] couldn't get all the way down to the end of the road because it flooded." (Id.) Price also said he heard information from other developments brought before the Planning Commission involving Hoo Shoo Too Road. (Id.) He was present at those other meetings and listened to arguments involving traffic and the danger of traffic accidents and water-back up. (Id. at 23.)
Price further stated that the "drainage issues that [Plaintiffs'] engineers proposed — and I'm not an engineer — sounded kind of corky to [him]." (Id. at 24.) He referenced pictures being passed around at the hearing that "basically showed a sea, and [he] had grave concerns about what another development out there would do with regard to drainage." (Id.) Price also said he was concerned about the fact that there were wetlands on the Plaintiffs' property. (Id.) Price stated that his "personal knowledge of draining out there, drainage out there, and experience led [him] to question the impact study that had been presented by [Plaintiffs] with regard to how they would handle drainage[.]" (Id. at 25.) He listened to what was presented at the hearing and "saw evidence of flooding." (Id.) He admitted that he could not recall seeing evidence of technical data contradicting the drainage impact study provided by the Plaintiffs. (Id. at 25-26.)
Price reviewed one traffic study done by the Department of Public Works, but it was done in connection with Hoo Shoo Too Road and not specifically for Mallard Trails. (Id. at 31.) He also heard arguments about an access road. (Id.)
Price stated that he visited the Plaintiffs' property; first he said there was nothing about that visit that factored into his denial, but he later stated that he based his denial on "the fact of where it was located on Hoo Shoo Too Road, the topography of the land[,] [and] . . . its relative closeness to Bayou Manchac." (Id. at 39.)
Price also testified about materials that are provided to the commissioners in connection with his consideration of a preliminary subdivision plat. Specifically, the commissioners received:
(Doc. 73-4 at 9-10.) That is, the commissioners get a "homework packet," which is "basically the application that's submitted, and what [the commissioners] are going to look at in connection with that." (Id. at 9-10.) The commissioners have access to any other documents if they choose to pursue them with the staff. (Id.)
If the commissioners have questions on issues, they "have the ability as a Planning Commission member, to go back and ask the Planning Commission staff for additional information." (Id. at 14.) The staff in turn has other agencies like the Department of Public Works to address the issues. (Id. at 14-15.) Here, the staff recommended approval. (Id. at 21.)
Price may have also spoken to individuals at the Department of Public Works with various questions. (Id. at 17.) Price did not recall speaking with anyone at the city. (Id. at 37-40.)
Price also testified that the Plaintiffs provided a drainage impact study that he reviewed and that concluded that the Mallard Trails development "would have a minimal adverse impact on drainage in this area based on the analysis requirements, Unified Development Code, and Department of Public Works and is acceptable as proposed." (Doc. 73-4 at 26-27.) He did not recall whether he received any drainage impact studies or engineering report that opposed that study or conflicted with it. (Id. at 27-28.)
Perret also testified at his deposition about why he voted against the project. When asked directly, Perret stated:
(Doc. 73-5 at 8.) Perret testified that he was provided with one document in particular that was "a site plan that showed elevations and the proposed development." (Id. at 8-9.) Perret said this document concerned in that "in the elevations that were — was a very — was a low elevation of 10, 11, 12 feet coming in, building up to the elevation of 21 feet across a wetland and low areas where flooding occurs." (Id. at 9.) Perret admitted that he was not presented with "any technical information related to this elevation issue that supported [his] concern about the flooding issue[.]" (Id. at 10; see id. at 11.) Perrett said this issue was based on his "review of the project that was being presented to the Planning Commission and for [him] to consider." (Id.) He stated he had no "background in dealing with these types of issues[.]" (Id.)
Ultimately, Perret's primary reasons for voting against the project were flooding and drainage. (Id. at 11.) However, he did state that there was "significant public opposition to this particular project." (Id. at 17.)
Perrett also testified about the Enhanced Drainage Impact Study. (Id. at 15.) The conclusion of that document was that "this development will have minimal adverse impact on drainage in this area based on the analysis requirements of the [UDC] and Department of Public Works, and is acceptable as proposed." (Id. at 15-16.) Perret, like Price, did not recall being provided with any reports or technical information that contradicted the findings of that report. (Id. at 16.)
Perret discussed the elevations at the Planning Commission public hearings, and he had a conversation with Shannon Dupont "to kind of help [him] understand the map better and the . . . document." (Id. at 9.) Dupont is with the Department of Public Works. (Id.) Perret acknowledged that the Department of Public Works recommended approval of the project. (Id. at 10.) Perret discussed with Dupont "the plat, . . . the elevations, . . . [and] drainage issues from surrounding properties that drain onto this property[.]" (Id. at 10.)
Perret also testified:
(Id. at 18.)
Laurie Marien testified at her deposition about her reasons for rejecting the project. She stated that she did not speak to anyone who was not present at the meeting about the traffic issues that came up in connection with the project. (Doc. 73-6 at 10.) She also did not recall speaking to anyone prior to the meeting about the project, and she did not recall any representative of the City presenting any engineering or technical information related to the project. (Id. at 11.) She also did not recall whether she received the Enhanced Drainage Impact Study or whether it was something she considered. (Id. at 12.) She did recall there being "some" public opposing from neighboring landowners." (Id.) She said she did not recall the "details of this application, just the general stuff." (Id. at 14.) She could not specifically answer why she voted no to the project:
(Id. at 73-6 at 14-15.) She also did not recall receiving any documents or any specific technical information related to traffic regarding this project; she may have, but she did not remember receiving specific documents. (Id. at 26.) She did recall a "major flooding incident" that was "all over the parish," but it was not specific to that area. (Id. at 27.)
While Marien did not know of the reason why she voted no, she did state that a reason was needed:
(Doc. 73-6 at 15-16.)
Lastly, Price admitted that the Planning Commission voted to approve other subdivisions in that same area since the Plaintiffs' project. (Doc. 73-4 at 40.) Perret testified to the same. (Doc. 73-5 at 13-14.)
To reiterate, "[t]he adjudicative mode of analysis asks not whether there was some conceivable rational basis for the challenged decision, but requires a finding as to what actually motivated the decision, and then asks whether this is rationally related to a legitimate governmental purpose." Vineyard Inv., LLC, 757 F. Supp. 2d at 617. After the actual interest is identified, the Court applies "traditional rational basis review to the action." Vineyard Inv., L.L.C., 440 F. App'x at 314. The Court first determines whether the Defendants' interest is considered a legitimate governmental interest. Vineyard Investments, L.L.C., 440 F. App'x at 314. The Court then examines whether the Government action advanced its legitimate goal. Id. As long as "the existence of a rational relationship" between the government action and the goal "is at least debatable," there is no constitutional violation. Id. (quoting FM Props., 93 F.3d at 175.)
Having carefully considered the law and the evidence in the record, the Court finds that summary judgment is appropriate on this claim. In short, no reasonable juror would conclude that the Planning Commission lacked a legitimate reason. That is, all reasonable jurors would conclude that the reasons for the denial of the preliminary plat were the commissioners' concerns about issues like fill mitigation/elevation, flooding, and drainage. It is undisputed that these were the issues specifically mentioned at the public hearing by the commissioners who voted against the project. Moreover, Price testified at his deposition that he based his decision on, among other things, the fact that he has seen flooding on Hoo Shoo Too Road, his opinion that the Plaintiffs' engineer's discussion of drainage issues sounded "corky" to him, and the project's proximity to Bayou Manchac. Similarly, Perret testified that he based his decision on concerns about the elevation of the project, which in part were based on a particular document. Perret also said that he based his decision in part on testimony at the hearing, and it is uncontested that the Plaintiffs' engineer said at that hearing (1) that a significant portion of the project lies in the 100-year flood plain and that the property was really close to Bayou Manchac, and (2) much of the property and the adjoining property drains poorly. On top of all of this were the concerns expressed by the public about these very issues. Having found that the reasons for the denial were issues like fill mitigation/elevation, flooding, and drainage, the Court further finds that, as a matter of law, these reasons were rationally related to legitimate governmental interests like public health, safety, and the general welfare.
The Plaintiffs argue that the decision was arbitrary and capricious because they were based solely on (1) public opposition and (2) subject concerns unsupported by technical evidence. But the lack of technical or expert information does not automatically mean the commissioners lacked legitimate concerns. Moreover, under the Plaintiffs' logic, there would be a substantive due process violation every time the Planning Commission acted without technical or expert evidence or chose to reject an applicant's expert. This is unsupported by the case law. See FM Props., 93 F.3d at 174 ("`[t]he power to decide, to be wrong as well as right on contestable issues, is both privilege and curse of democracy.' Ergo, `the due process clause does not require a state to implement its own law correctly[, nor does] [t]he Constitution . . . insist that a local government be right.'" (citations omitted)).
The Plaintiffs are correct that, in Christopher Estates, Inc. v. East Baton Rouge Parish, 413 So.2d 1336 (La. App. 1 Cir. 1982), the Court found an arbitrary and capricious denial of a plat in part on the fact that, as in the instant action, "no expert testimony was elicited at the hearing as to whether the proposed plat would adversely affect the health, safety, or general welfare of the public." Id. at 1340. But this case also notes that "there was no evidence during the public hearing presented to the commission that the proposed plat was unacceptable for reasons relating to health or safety of the public." Id.
Here, unlike Christopher Estates, Inc., the decision was based in part on evidence at the hearing related to public health and safety. The above commissioners based their decisions in part on (1) the fact that the commissioners disbelieved the testimony about drainage given by the Plaintiffs' engineer at the public hearing, (2) pictures of flooding in the area presented at the hearing, and (3) concerns about elevation which were gleamed from a particular document furnished for the hearing. This does not even take into account the information gleaned from other hearings, which is still "data presented" to the Planning Commission.
The Plaintiffs are also correct that they have presented evidence of other developments being approved in the area. But the Defendants are correct that there is minimal evidence of the similarities of these developments to the Plaintiffs' project. Without more, the Plaintiffs cannot create an issue of fact, even drawing inferences in their favor.
Accordingly, the Court grants the Defendants' motion for summary judgment on this issue. The Plaintiffs' substantive due process claim is dismissed.
As this Court previously explained, a procedural due process claim requires that the Plaintiff "identify a life, liberty, or property interest protected by the Fourth Amendment." (Doc. 36 at 22 (quoting Blackburn v. City of Marshall, 42 F.3d 925, 935 (5th Cir. 1995)).). The Plaintiff must then "identify a state action that resulted in a deprivation of that interest." (Id. (quoting Blackburn, 42 F.3d at 935).)
Here, the Defendants attack the first requirement. The Defendants argue that the Plaintiffs must first show a "`legitimate claim of entitlement' to the issuance of a license or certificate (or in this case, approval of a preliminary plat)." (Doc. 62-1 at 15 (citing Yale Auto Parts, Inc. v. Johnson, 758 F.2d 54, 58 (2d Cir. 1985)).) The Defendants maintain that this question depends on "whether, absent the alleged denial of due process, there is either a certainty or a very strong likelihood that the application would have been granted." (Doc. 62-1 at 16.)
The Defendants assert that "compliance with the objective requirements of the UDC are pre-conditions which must be met before a development can be considered for site plan approval, and do not, as Plaintiffs argue, entitle the developer to said approval." (Id.) The Defendants argue that the Planning Commission must ensure that developments comply with "the general public interest" and do not "create undue congestion of streets and traffic access or overcrowding of land or overburden on public facilities such as transportation, sewage, drainage, schools, parks, and other public facilities." (Id.) The Plaintiffs' compliance with the regulations merely gave them a subjective expectancy, and the decision ultimately rested on the Planning Commission's "exercise of judgment." (Id.)
The Plaintiffs were also not entitled to approval merely because the Planning Commission staff recommended approval; the regulations do not require the Planning Commission to follow this recommendation.
The Defendants conclude by stating:
(Doc. 62-1 at 17.)
The Plaintiffs only briefly respond to the Defendants' argument on this issue. They state that Defendants contend there is no "legitimate claim of entitlement" to approval "because such a `claim of entitlement' requires `either a certainty or a strong likelihood that the application could have been granted.'" (Doc. 73 at 12.) The Plaintiffs then state, "Even though it is undisputed that all requirements imposed by law on Plaintiffs were met, Defendants assert that Louisiana law does not establish such a `strong likelihood' that the application could have been granted." (Id.) The Plaintiffs then quote the Court's prior ruling on the Defendants' motion to dismiss:
(Doc. 73 at 12 (quoting Doc. 36 at 25 (citations omitted) (emphasis added).)
The Defendants respond that "Plaintiffs did not have a `legitimate claim of entitlement' to preliminary plat approval because La. R.S. 33:101.1 provides Defendants with
The Defendants note that the cases relied upon in the Court's earlier ruling on the motion to dismiss are state law cases that "do not establish the `protected property interested created under state or local law' as contemplated by federal jurisprudence and do not employ the same standard as what has been established under federal law." (Id. at 7 n. 11.) The Defendants argue that the "state cases reviewed the property owner's alleged deprivation based on a `use by right' and used a strict scrutiny standard. " (Id.) The Defendants claim this standard is not used in federal due process cases. (Id. (citing Urban Hous. of Am., Inc. La. v. City of Shreveport, No. 09-0317, 2013 WL 587900, at n. 6 (W.D. La. Feb. 13, 2013).
Lastly, Defendants maintain that, even if they did have a legitimate claim to entitlement, they suffered no deprivation of that interest. According to the Defendants, the Plaintiffs received all the process that was due; they had a hearing, an opportunity to present evidence, and a fair and impartial consideration of their application.
The Plaintiffs' surreply states that the Defendants' reply is nothing more than a motion to reconsider the Court's prior ruling on the motion to dismiss. The Plaintiffs argue that the Defendants do not satisfy the legal grounds for a motion to reconsider. The Plaintiffs assert that the "Court should decline to reconsider its prior well-considered ruling and reject the new arguments which rely upon such reconsideration." (Doc. 80 at 2.)
Again, "[i]n a section 1983 cause of action asserting a due process violation, a plaintiff must first identify a life, liberty, or property interest protected by the Fourteenth Amendment and then identify a state action that resulted in a deprivation of that interest." Blackburn, 42 F.3d at 935. The Fifth Circuit has explained:
Id. at 936-37 (citation omitted).
Furthermore, "[a]lthough the underlying substantive interest is created by `an independent source such as state law,' federal constitutional law determines whether that interest rises to the level of a `legitimate claim of entitlement' protected by the Due Process Clause." Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, 757, 125 S.Ct. 2796, 2803-04, 162 L. Ed. 2d 658 (2005) (emphasis in original). The Supreme Court has recognized that "a benefit is not a protected entitlement if government officials may grant or deny it in their discretion." Id., 545 U.S. at 756, 125 S. Ct. at 2803.
Louisiana Revised Statutes § 33:101.1 provides in pertinent part:
(emphasis added). Thus, as the Court recognized in its earlier ruling on the Defendants' motion to dismiss, the Planning Commission has discretion, but it is limited in that it must be "based upon data presented to it" and it must, among other things, comport with due process.
In Homeowner/Contractor Consultants, this Court cited with approval the standard announced in Yale Auto Parts v. Johnson, 758 F.2d 54, 59 (2d Cir. 1985) regarding the property interest in issuances of licenses and certificates by local land regulators. 32 F. Supp. 2d at 391-92. Under that standard, in order to have a legitimate claim of entitlement to the issuance of a license or certificate, there must have been "either a certainty or a very strong likelihood that the application would have been granted." Id. (citation omitted). The Homeowner/Contractor court also recognized:
Id. (quoting Bituminous Materials v. Rice County, 126 F.3d 1068, 1070 (8th Cir.1997).
Thus, the central question here is whether, under state law, the Planning Commission did in fact have discretion to deny the preliminary plat; that is, was the Planning Commission's "discretion . . . so narrowly circumstanced that approval" was a "certainty," a "very strong likelihood," or "virtually assured"? The Plaintiffs argue that this was decided in the earlier ruling on the motion to dismiss, and the Defendants urge that it was not and that, to the extent it was, the earlier ruling was incorrect.
Having carefully considered the law and facts in the record, the Court finds that its earlier ruling does not control the outcome of this ruling. That is, despite the Court's decision on the Defendants' motion to dismiss, the Defendants are still entitled to summary judgment here.
In its earlier ruling on the motion to dismiss, the Court found:
Plaintiffs have stated that they complied with all laws, and conformed to additional demands from Defendants. (R.Doc. 1-2, ¶ 10-11). Assuming this is true, and considering Louisiana's policy that land-use in these cases are presumptively valid, there was at least a "very strong likelihood" that Plaintiffs' application would be approved. Therefore, Plaintiffs had a legitimate claim to entitlement to approval of their preliminary plat, regardless of Defendants' discretion to grant or deny preliminary plat approval.
(Doc. 36 at 25.) In essence, the parties dispute in their motion whether the rule from D'Argent and Urban Housing controls.
The Court finds that this question must be determined in light of GBT Realty Corp. v. City of Shreveport, 50,104 (La. App. 2 Cir. 9/30/15), 180 So.3d 458 writ denied, 2015-2002 (La. 1/8/16); 184 So.3d 693, which is a case rendered by the Louisiana Second Circuit after D'Argent and Urban Housing and after this Court rendered its earlier ruling on the motion to dismiss. GBT Realty provides guidance in how to interpret D'Argent and Urban Housing. GBT Realty also demonstrates how the Planning Commission had discretion to act in this case, thereby defeating the Plaintiffs' due process claim.
Before turning to GBT Realty, the Court will summarize Urban Housing, which contains a discussion of D'Argent. In Urban Housing, the plaintiff appealed the action of the city council in denying approval of a subdivision plan. Id., 26 So. 3d at 227. The plaintiff developer consulted with the planning commission officials, incorporated all their suggested into the plan, and complied with all zoning and use ordinances. Id. at 228. The plan was approved by the planning commission, but the city council later overturned the decision. Id.
At trial, "[a]ll agreed that the second subdivision plan met all zoning and use criteria." Id. The city argued that the city code and La. Rev. Stat. 33:101.1 gave them broad powers and discretion in approving of the proposed subdivision. Id. at 229. A resident testified who had voiced opposition. Id. The trial court issued an opinion that found that the city had "virtually boundless discretion" that was not violated in the case. Id.
On appeal, the plaintiff's first assignment of error was that the city had acted arbitrary and capriciously in denying the subdivision plan when they had complied with all applicable ordinances and when they had already approved two earlier phases of the subdivision. Id. at 230. The plaintiff contended they were denied the "use by right of its own property." Id. The Plaintiff argued that, to deny a use by right, the defendants must satisfy strict scrutiny. Id. The defendant responded by relying on the council's legislative discretion under the city ordinance and La. Rev. Stat. 33:101.1.
The Louisiana Second Circuit agreed with the plaintiff. The appellate court explained:
On appeal, however, this court found those authorities inapplicable:
Id. at p. 5, 15 So.3d at 340 (footnote omitted).
Id. at 231 (footnote omitted). The appellate court concluded:
Id. at 232. Thus, Urban Housing seems to suggest, like the Court found in its earlier ruling, that the Planning Commission lacked unlimited or broad discretion.
But Urban Housing must be read in light of the later GBT Realty, which provided guidance for interpreting it and more directly addresses the question of the Planning Commission's discretion for purposes of imposing liability. In GBT Realty, the Louisiana Second Circuit affirmed the rejection of a tort claim for denial of a building site plan. In GBT Realty, the plaintiffs were property developers who wanted to build a Dollar General store in Shreveport. Id. at 459. The plaintiffs submitted plans to the city planning commission, and the staff "found no problems with the submitted plans." Id. at 460.
A public hearing was held with the planning commission, which "expressed concerns about the similar store in operation across the street and about the building façade and the proposed landscaping." Id. The vote was deferred so that the developers could address those issues. Id.
The plaintiffs later returned before the planning commission with an improved plan that included an upgraded façade and landscape plan. Id. The planning commission ultimately rejected the plan because it (1) did not comply with recently proposed zoning suggestions to the city's master plan, and (2) the "consensus was that the site was too small to accommodate the proposed plan." Id.
The city council unanimously upheld the planning commission's decision. One councilman said that "the size of the property vis-à-vis the proposed use was a big problem" Id. He said that residents made some valid points. Id.
The plaintiffs later appealed and asked the district court to approve of the initial site plan. Id. The district court overturned the council's decision. Id.
The plaintiffs filed suit against the city and the planning commission. They claimed that the proposed site complied with the zoning law and that the stated reasons were "contrived." Id. at 461. At trial, the plaintiffs' engineer testified that "the proposed store was a use by right under the zoning for the property and that other Dollar General stores had been approved with the same basic design." Id. The city's witnesses acknowledged that there were no violations of city ordinances. Id.
The district court concluded that the plaintiffs could not recover because of Louisiana Revised Statute 9:2798.1, which provides in part that "Liability shall not be imposed on public entities or their officers or employees based upon the exercise or performance or the failure to exercise or perform their policymaking or discretionary acts when such acts are within the course and scope of their lawful powers and duties." La. Rev. Stat. § 9:2798.1(B). The trial court further found that "despite the use by right zoning for the property, the City had discretion to disapprove the site plan, particularly in light of the provisions of the Shreveport City Code governing the approval process that ensure a safe, efficient, attractive and well-ordered community." Id. The court concluded that the "the City merely exercised its discretion under the applicable rules and did so in light of the policymaking considerations cited by Councilman Jenkins." Id.
The GBT Realty thoroughly reviewed D'Argent and Urban Housing, as well as one additional case. The GBT Realty court explained that, "[a]lthough the instant case is a tort action and not a disapproval vel non case, jurisprudence involving disapproval of use by right is informative to determine the City's exposure to tort liability." Id. at 462. After this thorough review, the GBT Realty court concluded:
Id. at 463 (emphasis added). Turning to the facts, the Louisiana Second Circuit determined that the Plaintiffs were not entitled to recover:
Id. at 464-65.
While slightly distinguishable, the Court finds GBT Realty instructive. GBT Realty specifically recognizes that Urban Housing ultimately "establish[es] that a municipality has the discretion to act within the ambit of the zoning ordinances so long as that discretion is not exercised arbitrarily and capriciously." Id. at 463. As in GBT Realty, this Court has already determined in the above substantive due process section that the Planning Commission did not act arbitrarily and capriciously in its denial of the preliminary plat. Thus, as a matter of state law, the Planning Commission did have discretion to deny the Plaintiffs' preliminary plat.
Given that discretion, the Plaintiffs cannot prevail on their due process claim. First, they cannot demonstrate that there was a "very strong likelihood" of approval. Again, as this Court has explained:
Homeowner/Contractor Consultants, 32 F.Supp.2d 392 (quoting RRI Realty Corp. v. Inc. Vill. of Southampton, 870 F.2d 911, 918 (2d Cir. 1989)). As demonstrated above in the substantive due process section, the Plaintiffs have not demonstrated that approval was "virtually assured."
Second, the "strong likelihood" standard is merely intended to answer the larger question of whether there was discretion. See Town of Castle Rock, Colo., 545 U.S. at 756, 125 S. Ct. at 2803 ("a benefit is not a protected entitlement if government officials may grant or deny it in their discretion."). Here, GBT Realty demonstrates that, as a matter of state law, the Planning Commission had discretion to deny the preliminary plat under the circumstances. For this additional reason, the Plaintiffs have no property interest, and their due process claim fails. See RRI Realty Corp., 870 F.2d at 918 ("When a local regulator's discretionary decision to deny an application is not arbitrary or capricious, the plaintiff will usually be deemed not to have a sufficient entitlement to constitute a protected property interest.").
This ruling is also consistent with the Court's earlier ruling on the motion to dismiss. In the Plaintiffs' Petition, they stated that the "individual commissioners all voted against approving the Preliminary Plat using criteria that is contrary to law" and the Planning Commission's "reason for . . . denial was on account of the opposition to the Preliminary Plat by local landowners who desired for the Property to remain undeveloped." (Doc. 1-2 at 5.) They further alleged that the rejection was "on grounds of public outcry." (Id. at 11.)
At the motion to dismiss stage, the Court was required to assume the truth of these allegations. Based on those allegations, the Court properly determined that the Planning Commission lacked discretion and that there was a very strong likelihood the preliminary plat would be approved.
The difference here is that the Defendants' motion must be decided on the factual record submitted by the parties. As discussed above in the substantive due process section, here the record demonstrates that the Planning Commission did in fact base its decision on legitimate reasons and on data submitted at this hearing and others. Thus, while the motion to dismiss may have been properly denied because of the allegations of the Petition, here the record demonstrates that, in fact, the Planning Commission did have discretion and that approval was not a "certainty" or "virtually assured."
In sum, for the above reasons, the Court finds that summary judgment is appropriate on this issue. Accordingly, the Plaintiffs' procedural due process claim is dismissed with prejudice.
The Defendants claim that "[a] takings claim under the Fifth Amendment to the United States Constitution and Article I, § 4 of the Louisiana Constitution is not ripe until the claimant has unsuccessfully attempted to obtain just compensation through the procedures provided by the state for obtaining such compensation." (Doc. 62-1 at 4 (citing Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 193-94, 105 S.Ct. 3108, 3120, 87 L. Ed. 2d 126 (1985)).)
The Defendants correctly assert that, under Fifth Circuit law, "[a] takings claim is not ripe until (1) the relevant governmental unit has reached a final decision as to what will be done with the property and (2) the plaintiff has sought compensation through whatever adequate procedures the state provides." Sandy Creek Inv'rs, Ltd. v. City of Jonestown, Tex., 325 F.3d 623, 626 (5th Cir. 2003).
The Defendants argue that, under the first prong, a case is not ripe (1) "when a case involves a matter that has not been finally decided[,]" and (2) "when the property owner has `ignored or abandoned some relevant form of review or relief, such that the taking decision cannot be said to be final.'" (Doc. 62-1 at 4 (quoting Urban Developers, LLC v. City of Jackson, 468 F.3d 281, 293 (5th Cir. 2006)).) According to the Defendants, the Plaintiffs here have ignored the Louisiana Administrative Procedure Act procedure set forth in La. Rev. Stat. 49:964(G). The Defendants contend that the Plaintiffs failed to avail themselves of state law remedies, so the matter is unripe.
The Defendants also state that, under the second prong, "a movant must . . . show that compensation for the alleged taking has duly been sought and denied via all available administrative procedures." (Doc. 62-1 at 5 (citing Williamson Cty., 473 U.S. at 186-87).) The Defendants assert that, "[i]f 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." (Doc. 62-1 at 5-6 (citing Williamson Cty., 473 U.S. at 186-87).) According to the Defendants, the "Fifth Circuit has interpreted this requirement as meaning that a plaintiff asserting a takings claim must first `present its inverse condemnation action to the state court in a posture such that the state court could rule on [the] claim,' before coming to federal court." (Doc. 62-1 at 6 (quoting Liberty Mut. Ins. Co. v. Brown, 380 F.3d 793, 798 (5th Cir. 2004)).)
Similarly, the Louisiana Supreme Court has recognized an inverse condemnation action under Louisiana law. According to the Defendants, the Plaintiffs must use this procedure before coming to federal court.
The Defendants then argue:
(Doc. 62-1 at 6.)
The Plaintiffs argue that "[t]he Williamson County ripeness requirement is prudential, not jurisdictional, and thus may be waived." (Doc. 73 at 3 (citations omitted).) Further, the Plaintiffs argue that this "ripeness requirement does not apply to actions brought in state court, since a state court may hear `simultaneously a plaintiff's request for compensation under state law and the claim that, in the alternative, the denial of compensation would violate the Fifth Amendment of the Federal Constitution.'" (Doc. 73 at 4 (citation omitted).) Plaintiffs state that this is exactly what they did when they filed suit in state court.
The Plaintiffs also note that the Defendants are wrong to say that they could have sought review of "agency" action under La. Rev. Stat. 49:964. According to the Plaintiffs, "this provision does
The Plaintiffs thus contend:
(Doc. 73 at 4 (footnotes omitted).)
The Defendants reply that the "Supreme Court has determined that when a ripeness question in a particular case is prudential, it may be raised on the Court's own motion, and `cannot be bound by the wishes of the parties.'" (Doc. 76 (quoting Regional Rail Reorganization Act Cases, 419 U.S. 102, 138, 95 S.Ct. 335, 356, 42 L. Ed. 2d 320 (1974)).) The Defendants argue they are not manipulating litigation; rather, the Plaintiffs "have actually had years to recognize that their inverse condemnation claim should have been remanded to state court for proper adjudication." (Doc. 76 at 2.) Lastly, the Defendants argue that "courts of judicial review have repeatedly deferred and recognized the necessity of an intermediary court exercising appellate review of an agency adjudication." (Id. (footnote omitted).)
As stated above, "[a] takings claim is not ripe until (1) the relevant governmental unit has reached a final decision as to what will be done with the property and (2) the plaintiff has sought compensation through whatever adequate procedures the state provides." Sandy Creek Inv'rs, Ltd., 325 F.3d at 626. The Court will address each in turn.
The first issue is whether there was a "final decision" by the "relevant governmental unit" concerning the property. Id. The Fifth Circuit has stated:
Urban Developers LLC v. City of Jackson, Miss., 468 F.3d 281, 293 (5th Cir. 2006) (quoting Williamson County, 105 S.Ct. at 3118-19 (citations omitted)). The Fifth Circuit then explained:
Id. (emphasis added). Thus, in Urban Developers LLC, the Fifth Circuit found that the first prong was not satisfied because:
Id. at 293-94 (emphasis added).
Here, it is uncontested that the Planning Commission discussed and evaluated the Plaintiffs' preliminary plat at the January 2013 public hearing. The Planning Commission decided to delay a final decision and give the Plaintiffs an opportunity to make certain changes to the plan. The Plaintiffs did so, yet, despite this, the Planning Commission eventually voted in April to deny approval for the preliminary plat. Importantly, the Defendants have identified no specific permit, variance, or administrative appeal process that the Plaintiffs should have pursued but did not. The Defendants only point to one: relief from the courts, either through the Louisiana Administrative Procedure Act or through some other general review process.
Putting aside the former,
However, unlike the plaintiffs in Mercan and Urban Developers LLC, the Plaintiffs here did provide "an opportunity to rectify the alleged . . . [mis]conduct" because it "pursued [a] mandamus" against the Planning Commission in which they sought approval of the preliminary plat. (See Petition, Doc. 1-2 at 6-7.) Moreover, there has even been a final decision on that writ of mandamus; in ruling on the Defendants' motion to dismiss, this Court found that the Plaintiffs' claim was moot because they had sold the property. (Doc. 36 at 10-11.) Thus, unlike the above cases, the Planning Commission's decision with respect to the Plaintiffs' preliminary plat is certain and final.
The Defendants point to an (unauthenticated) email in support of their argument that there was no final decision. In the email, dated April 23, 2013 (the day after the Plaintiffs' preliminary plat was denied by the Planning Commission), counsel for the Plaintiffs emailed Troy Bunch, former Director of the Planning Commission asking, "Should I file suit or so [sic] you think there is an alternative course of action?" (Doc. 62-13.) Bunch replied, "Your future action is up to you and your client. There is no waiting period to re-apply or your client could modify the application or follow the existing rules and regulations." (Id.)
Even if the Court were to consider this unauthenticated document, the Court finds that it does not support the Defendants' position. The email provides virtually no answer to the Plaintiffs' question of what the Plaintiffs should have done next to obtain review. To the extent it does, the email suggests that filing suit would be an appropriate next step. This is precisely what the Plaintiffs did. Finally, by the Defendants' logic, no taking claim could ever be ripe, because modification or reapplication is theoretically always available for an applicant.
Accordingly, the Court finds that the first prong of the Williamson County analysis is satisfied. The Court will now proceed to the second.
This Court has explained:
Bienville Quarters, LLC v. E. Feliciana Par. Police Jury, No. 07-158, 2010 WL 2653317, at *2 (M.D. La. June 25, 2010). The Defendants acknowledge that the Plaintiffs filed an inverse condemnation claim in state court, but they argue that their own removal of the action to federal court somehow makes the claim unripe.
The Court rejects the Defendants' argument. The Plaintiffs are correct that "the Supreme Court has . . . explicitly held that Williamson County's ripeness requirements are merely prudential, not jurisdictional, so although a court may raise them sua sponte, it may consider them waived or forfeited as well." Rosedale Missionary Baptist Church v. New Orleans City, 641 F.3d 86, 88-89 (5th Cir. 2011) (citations omitted).
The Plaintiffs are also correct that "Williamson County [does not] prohibit[] plaintiffs from advancing their federal claims in state courts." San Remo Hotel, L.P. v. City & Cty. of San Francisco, Cal., 545 U.S. 323, 346, 125 S.Ct. 2491, 2506, 162 L. Ed. 2d 315 (2005). The Supreme Court has explained:
Id. Thus, the Plaintiffs acted properly in bringing in state court their federal takings claim with their inverse condemnation claim.
The Court is persuaded by Sansotta v. Town of Nags Head, 724 F.3d 533 (4th Cir. 2013), which was also cited by the Plaintiffs. There, the appellate court held that the district court erred in dismissing the plaintiffs' takings claim as unripe because the town had waived this requirement by removing the case to federal court. Id. at 544.
The Sansotta court began by explaining how, under Williamson County, a plaintiff must first seek compensation from the state via the procedures that the state has established before suing the state in federal court and how, "[b]ased on this requirement, a plaintiff cannot simultaneously bring a claim for compensation under state law and a claim under the Takings Clause in federal court; rather, the plaintiff must first pursue his state-law claim for compensation." Id. (citations omitted). The Court then recognized the above rule from San Remo Hotel, L.P. that a state court can hear simultaneously a claim for compensation under state law and an alternative claim for denial of compensation under the Fifth Amendment. Id. (citing San Remo Hotel, L.P., 545 U.S. at 346, 125 S. Ct. at 2506).
The Court stated that "the Williamson County state-litigation requirement involves only prudential considerations," so the Court "may determine that in some instances, the rule should not apply and we still have the power to decide the case." Id. at 545 (citations omitted). The Sansotta court then found that "[t]his case is such an instance. Allowing the Town to invoke the Williamson County state-litigation requirement after removing the case to federal court would fail to fulfill the rationale for this prudential rule and would create the possibility for judicially condoned manipulation of litigation." Id.
As to the first reason, the Fourth Circuit explained that the purpose behind the state-litigation requirement is that state courts have more experience than federal courts in the factual and legal issues surrounding zoning and land-use regulations. Id. (citations omitted). However, federal courts remain capable of deciding the issues, and defendants implicitly recognize this when they remove such cases to federal court. Id. "Thus, the primary reason for the Williamson County state-litigation requirement no longer applies when the defendant removes a case." Id.
As to the second reason (manipulation of litigation), the Fourth Circuit analogized the case to the rule that a defendant who removes a case to federal court waives Eleventh Amendment immunity. Id. at 545-46 (citing Lapides v. Bd. of Regents of the Univ. Sys. of Ga, 535 U.S. 613, 122 S.Ct. 1640, 152 L. Ed. 2d 806 (2002)). In Lapides, Supreme Court explained:
Id. at 546 (quoting Lapides, 535 U.S. at 619, 122 S.Ct. 1640). According to the Fourth Circuit, "The Court was so intent on preventing any manipulation that it created a bright-line rule: any voluntary removal waives immunity." Id. (citation omitted). Turning to its own case, the Sansotta court explained:
Id. at 546-47.
The Fourth Circuit also expressly rejected the argument advanced by the Defendants here — that the Plaintiffs should have sought remand. The Fourth Circuit explained that the plaintiffs "had no basis to seek to have [the district] court remand any claims to the state court." Id. (citations omitted). After the case was removed, "federal jurisdiction was proper, and the district court was obligated to exercise that jurisdiction unless it had a legal basis, such as abstention, to refrain from exercising that jurisdiction." Id. at 547 (citation omitted).
The Court finds the Sansotta case highly persuasive. All of the reasons cited by the Sansotta court appear sound and reasonable. Most relevant, the Court finds the Defendants' efforts on this issue stink of litigation manipulation. For these reasons, the Court will apply Sansotta and find that the Defendants have waived any objection to this Williamson County requirement. Thus, Williamson County does not preclude the Plaintiffs' takings claims, and they are ripe for adjudication.
The Defendants acknowledge that the Plaintiffs are asserting a regulatory taking and admit that, in ruling on the Defendants' motion to dismiss, the Court identified the correct factors in determining whether such a taking has occurred. These facts are (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." (Doc. 62-1 at 7 (citing Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 124, 98 S.Ct. 2646, 2659, 57 L. Ed. 2d 631 (1978)).)
The Defendants argue that the first factor weighs against the Plaintiffs. The Defendants assert that the Plaintiffs have sold much of their 57.7 acres for over one million dollars. According to the Defendants, "a diminution in value does not establish a taking." (Doc. 62-1 at 8 (citing Jackson Court Condominiums, Inc. v. City of New Orleans, 874 F.2d 1070, 1080 (5th Cir. 1989)).) Moreover, the Defendants reject the Plaintiffs' argument that they suffered economic hardship because their profits from the proposed subdivision would have gone toward paying various judgments; the Defendants state, "Plaintiffs' poor financial decisions and legal troubles do not vitiate the fact that they made a substantial profit. The law does not contemplate any losses or financial obligations incurred by Plaintiffs as a result of their personal decision to default on loans or breach contracts with third-parties." (Doc. 62-1 at 8.)
Concerning the second Penn Central factor, the Defendants argue that investment-backed expectations "must be more than a unilateral expectation or an abstract need," that the Plaintiffs must show that they were "denied the ability to exploit a property interest that they heretofore had believed was available for development," and that "[o]ne who buys with knowledge of a restraint assumes the risk of economic loss." (Doc. 62-1 at 9 (citations and quotations omitted).) The Defendants argue that the Plaintiffs were familiar with the discretionary nature of the approval process for subdivision plats and that this familiarity means that they had no reasonable investment-backed expectations:
(Doc. 62-1 at 10.)
Concerning the third Penn Central factor, the Defendants contend that "Penn Central noted that a taking is more readily found when the interference is a physical invasion than when the interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good." (Doc. 62-1 at 10 (citing Penn Central, 438 U.S. at 124).) The Defendants contend that, since the taking here was regulatory, "there is no governmental intrusion whatsoever." (Id.) The Defendants state that, "[t]he challenged action in this case is the failed approval of a preliminary plat for a proposed subdivision, which squarely falls under the authority of local ordinances, and specifically the [UDC]. The regulation does not deprive Plaintiffs of absolute use or ownership of their property." (Id. at 10-11.) Thus, under the Penn Central factors, no taking has occurred.
The Plaintiffs begin by referring to the Court's ruling on the Defendants' motion to dismiss. In that ruling, the Court found that, by alleging that the Planning Commission had deprived the Plaintiffs of "all economically beneficial use" of the Property, the Plaintiffs had stated a claim for a per se or "categorical" taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 12 S.Ct. 2886, 120 L. Ed. 2d 798 (1992). (Doc. 73 at 5 (citing Doc. 36 at 14).) The Plaintiffs contend that the Defendants did not address this claim in their motion, so it survives summary judgment.
The Plaintiffs continue by stating that, even if the issue had been raised, it would survive summary judgment. The Plaintiffs argue:
(Doc. 73 at 5.) The Plaintiffs argue that the Defendants have submitted no evidence that the Plaintiffs had another economically viable "use" of the property after the Planning Commission's action. Rather, the Defendants focus solely on property values, which is not the appropriate inquiry here. While the Plaintiffs (like the plaintiff in Lucas) were free to sell the property, they were not free to use the property in any economically beneficial way.
The Plaintiffs also devote considerable attention to the Penn Central analysis. The Plaintiffs begin by citing to numerous cases for the proposition that Courts are generally reluctant to decide Penn Central issues at the summary judgment stage because they are so fact-intensive. (Doc. 73 at 6 (citations omitted).)
After listing factors to consider in assessing the economic effect on the claimant, the Plaintiffs assert that the Defendants' focus on the fact that the property was sold for a gross profit is misplaced; the key is "how the regulation impacted the value of the Property, i.e., what the Property might have sold for before the [Planning Commission] foreclosed the highest and best use of that Property." (Id.) The Plaintiffs' evidence demonstrates the "`before and after' effect of the Planning Commission's action on its property and investment-backed profit expectations"; the Defendant's evidence simply shows that property appreciates over time. (Id. at 7-8.) "Plaintiffs could have sold the Property, vacant and undeveloped, at any time; it was the fact they were prevented from using their Property as permitted by law, i.e., developing the Property into the low-density subdivision . . . that is the basis of Plaintiffs' complaint." (Id. at 8.)
Concerning the reasonableness of the investment-backed expectations, the Plaintiffs contend that the "law requires an objective, but fact-specific inquiry into what, under all the circumstances, [the Plaintiffs] should have anticipated." (Id. (citations omitted).) According to the Plaintiffs, the sole contention by the Defendants on this point is that, because the subdivision required approval by the Planning Commission, it was not reasonable for the Plaintiffs to have any expectations." Relying on case law, the Plaintiffs assert that the existence of laws and regulations does not per se prevent expectations for the development; rather, this is a factor in the analysis. (Id. (citations omitted).) The key question is whether a reasonable person would have considered it probable that the project would be approved. The Plaintiffs maintain that they have satisfied this standard.
Finally, concerning the final Penn Central factor (the character of the governmental action), the Plaintiffs argue that this factor is either neutral or weighs in their favor. They contend they were denied a use of right protected by Louisiana law.
The Defendants first claim that they are in fact challenging whether the Plaintiffs have a Lucas taking and that the Plaintiffs cannot prove that they were deprived of "all economically beneficial use" of their property. The Defendants argue that, in Tahoe—Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 303 (2002), the Supreme Court noted that "Lucas was carved out for the `extraordinary case' in which a regulation
Concerning the as applied takings claim, the Defendants argue that the Plaintiffs were not "economically deprived in any manner." (Doc. 76 at 4.) In a footnote, they cite to the numerous sales of property and to the approval of a smaller subdivision on the subject property that the Plaintiffs sold.
Moreover, the Defendants contend that they dispute that the Plaintiffs would gain $1.3 million in profit from the subdivision development. The Defendants also contend that there were no reasonable expectations because the property at issue was being foreclosed upon. According to the Defendants, there can be no reasonable expectation that the development would have been completed without an adversary action as a result of the foreclosure, and the "Plaintiffs were only able to stop the foreclosure actions with the proceeds from the sales of the property." (Doc. 76 at 5 n. 6.) Thus, according to the Defendants, the Plaintiffs lost not because of the Planning Commission but through "their own doing via the satisfaction of any and all foreclosure judgments rendered against them." (Id.)
Concerning the categorical taking (Lucas) claim, the Plaintiffs argue that the Defendants cannot implicitly challenge this claim and rely on their assertion that "Lucas clearly does not apply." Rather, the Defendants had to expressly raise the issue in their motion, and they failed to do so.
Concerning the merits of the Lucas claim, the Plaintiffs reiterate that there is a difference between a land's "use" and its "value," and "it is the deprivation of any `economically beneficial
Concerning the Penn Central factors, the Plaintiffs argue that there are no facts that dispute their claim that the Plaintiffs would have earned $1.3 million in profits (beyond the value of the land).
In Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 125 S.Ct. 2074, 2080, 161 L. Ed. 2d 876 (2005), the Supreme Court explained:
Id., 544 U.S. at 536-37, 125 S. Ct. at 2080. "The paradigmatic taking requiring just compensation is a direct government appropriation or physical invasion of private property." Id., 544 U.S. at 537, 125 S. Ct. at 2081 (citations omitted). "Beginning with Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L. Ed. 322 (1922)], however, the Court recognized that government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct appropriation or ouster-and that such `regulatory takings' may be compensable under the Fifth Amendment." Id. The Supreme Court then explained:
Id., 544 U.S. at 538-40, 125 S. Ct. at 2081-82. Thus, "a plaintiff seeking to challenge a government regulation as an uncompensated taking of private property may proceed. . . by alleging a "physical" taking, a Lucas-type "total regulatory taking," [or] a Penn Central taking[.]"
Here, Lucas and Penn Central takings claims have been made. The Court will address each in turn.
The categorical takings claim requires an analysis of a procedural issue and a substantive issue. The first issue is whether the claim is properly before the Court. The Court finds that it is. The second issue is whether, assuming the claim can be considered, summary judgment is warranted. The Court finds that it is because no reasonable juror could conclude that the Plaintiffs suffered a "complete elimination of [the] property's value."
The Plaintiffs contend that the Lucas claim should not even be addressed because the Defendants did not argue the issue in their original memorandum in support. The Plaintiffs point to Baker v. Metropolitan Life Insurance Co., 364 F.3d 624 (5th Cir. 2004), which held that, "a district court may not grant summary judgment sua sponte on grounds not requested by the moving party." Id. (citations omitted). The Defendants claim that the issue was implicitly raised and obvious.
The Court finds that it will consider the issue. The Court bases its decision on Atkins v. Salazar, 677 F.3d 667 (5th Cir. 2011).
In Atkins, the Fifth Circuit explained that, "[d]istrict courts are widely acknowledged to possess the power to enter summary judgments sua sponte, so long as the losing party was on notice that she had to come forward with all of her evidence." Id. at 678 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 326, 106 S.Ct. 2548, 91 L. Ed. 2d 265 (1986)). "Put simply, `[s]ummary judgment is improper if "[t]here was no reason for the [nonmoving party] to suspect that the court was about to rule on the motion."'" Atkins, 677 F.3d at 678 (quoting Resolution Trust Corp. v. Sharif-Munir-Davidson Dev. Corp., 992 F.2d 1398, 1402 (5th Cir.1993)). "Under this standard, `[the Fifth Circuit has] vacated summary judgements [sic] and remanded for further proceedings where the district court provided no notice prior to granting summary judgment sua sponte, even where summary judgment may have been appropriate on the merits.'" Atkins, 677 F.3d at 678 (quoting Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 28 F.3d 1388, 1398 (5th Cir.1994)).
The facts of Atkins are particularly noteworthy. There, the Fifth Circuit found that the district court did not err in granting summary judgment on the basis of a particular defense, despite the fact that the defendant did not raise the issue in its opening brief, because (1) the "[plaintiff] himself raised the . . . defense in his summary judgment response brief"; (2) the defendant "made repeated references to facts relevant to the . . . defense in its opening brief"; and (3) though the defendant raised the defense in its reply brief, the plaintiff filed a surreply addressing it, thereby eliminating the concern that the defendant would have the "final word" on the issue. Atkins, 677 F.3d at 679-81 (emphasis in original). The Fifth Circuit concluded:
Id. at 681.
The Court finds Atkins directly on point. As in Atkins, the Plaintiffs themselves raised the Lucas claim in their original opposition. The Defendant's original brief contains considerable evidence about the economically beneficial use of the Plaintiff's property, as that overlaps with the Penn Central analysis. Finally, the Plaintiff got the last word by filing a surreply. According, the Court will decide this claim.
The next issue is whether the Lucas claim should be dismissed on the merits. The Court finds that it should.
A review of Lucas is appropriate at the outset. In Lucas, the petitioner paid almost a million dollars for two residential lots on an island. 505 U.S. at 1006-07, 112 S. Ct. at 2889. He intended to build homes there. Id. Two years later, the state legislature enacted a statute "which had the direct effect of barring [him] from erecting any habitable structures on his two parcels." Id., 505 U.S. at 1007, 112 S. Ct. at 2889. He filed suit alleging a taking without just compensation. Id., 505 U.S. at 1007, 112 S. Ct. at 2890.
The Court recognized that it found "categorical treatment appropriate . . . where regulation denies all economically beneficial or productive use of land." Id., 505 U.S. at 1015-16, 112 S. Ct. at 2893-94 (citations omitted). The Court explained that "the Fifth Amendment is violated when land-use regulation "denies an owner economically viable use of his land." Id., 505 U.S. at 1016, 112 S. Ct. at 2894 (emphasis in original).
In explaining the reason for this rule, the Court explained that it was "[p]erhaps" because "total deprivation of beneficial use is, from the landowner's point of view, the equivalent of a physical appropriation. For what is the land but the profits thereof?" Id., 505 U.S. at 1017, 112 S. Ct. at 2894 (citations, alterations, and quotations omitted). Further:
Id., 505 U.S. at 1018-19, 112 S. Ct. at 2894-95 (emphasis in original) (citations and quotations omitted).
Writing for the majority, Justice Scalia also responded to an objection by the dissent, stating:
Id., 505 U.S. at 1019 n. 8, 112 S. Ct. at 2895. The Supreme Court concluded that, because the trial court found that the petitioner's lots had been rendered "valueless," he was entitled to compensation under this theory. Id., 505 U.S. at 1020, 112 S. Ct. at 2896. The Court later held that the state supreme court committed error when it applied the "harmful or noxious uses" principle in the case and ultimately remanded for the state court to determine if common law principles (like nuisance) would have prevented the building of "any habitable or productive improvements on petitioner's land." Id., 505 U.S. at 1031-32, 112 S. Ct. at 2901-02.
Thus, Lucas recognizes that a regulation "denies all economically beneficial or productive use of land" when there is "the equivalent of a physical appropriation," 505 U.S. at 1017, 112 S. Ct. at 2894, when land is effectively "pressed into some form of public service," 505 U.S. at 1018, 112 S. Ct. at 2895, when the landowner "has been called upon to sacrifice all economically beneficial uses in the name of the common good," 505 U.S. at 1019, 112 S. Ct. at 2895, when he must "leave his property economically idle," id., and when he "suffers a complete elimination of value," 505 U.S. at 1019 n. 8, 112 S. Ct. at 2895.
Thus, Lucas is somewhat ambiguous and does not appear to answer the question of whether a categorical takings claim survives if the owner is able to sell his property for a million dollars. As one federal appellate court noted, the Lucas court "used the term `use' synonymously with the term `value.'" Lost Tree Vill. Corp. v. United States, 787 F.3d 1111, 1115 (Fed. Cir. 2015) (citing Lucas, 505 U.S. at 1019 n. 8, 112 S .Ct. 2886).
However, the Supreme Court provided guidance on how to interpret Lucas in Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 122 S.Ct. 1465, 152 L. Ed. 2d 517 (2002). There, "[t]he question presented [was] whether a moratorium on development imposed during the process of devising a comprehensive land-use plan constitutes a per se taking[.]" Tahoe-Sierra, 535 U.S. at 306, 122 S. Ct. at 1470. The Supreme Court held that it was not. In doing so, the Court stated:
Tahoe-Sierra, 535 U.S. at 330, 122 S. Ct. at 1483. The Court further explained that the categorical taking cases, including Lucas, "make clear that the categorical rule in Lucas was carved out for the `extraordinary case' in which a regulation permanently deprives property of all value; the default rule remains that, in the regulatory taking context, we require a more fact specific inquiry." Id., 535 U.S. at 332, 122 S. Ct. at 1484 (emphasis added).
Dissenting, Chief Justice Rehnquist took the position now advanced by the Plaintiffs. He criticized the Court for interpreting Lucas to mean only value, writing:
Tahoe-Sierra, 535 U.S. at 350, 122 S. Ct. at 1493 (Rehnquist, C.J., dissenting). However, as demonstrated above, the Tahoe-Sierra majority clearly rejected this position.
Similarly, in Lingle, the Supreme Court again interpreted Lucas, explaining that:
544 U.S. at 538, 125 S. Ct. at 2081. The Court further stated, "In the Lucas context, of course, the complete elimination of a property's value is the determinative factor. See Lucas, supra, at 1017, 112 S.Ct. 2886 (positing that "total deprivation of beneficial use is, from the landowner's point of view, the equivalent of a physical appropriation")." Lingle, 544 U.S. at 539-40, 125, S. Ct. at 2082. Thus, both Tahoe-Sierra and Lingle indicate that value is the key inquiry in a Lucas claim.
The Court found conflicting circuit case law on whether a plaintiff can bring a Lucas claim when he is able to sell his property. Compare Hawkeye Commodity Promotions, Inc. v. Vilsack, 486 F.3d 430 (8th Cir. 2007) (affirming trial court's holding that, even if Lucas applied to real property, the plaintiff did not suffer a loss of all economically beneficial use of his gaming machines when it "could sell [the] machines (e.g. salvage value) or reconfigure the . . . machines for a different use"), with Lost Tree Vill. Corp. v. United States, 787 F.3d 1111, 1113 (Fed. Cir. 2015) ("When there are no underlying economic uses, it is unreasonable to define land use as including the sale of the land. Typical economic uses enable a landowner to derive benefits from land ownership rather than requiring a landowner to sell the affected parcel.").
The Court also found several district court cases holding that there was no Lucas claim when the owner could sell his property. See Brian B. Brown Const. Co. v. St. Tammany Par., 17 F.Supp.2d 586, 590 (E.D. La. 1998) ("plaintiff's sale to an outside investor [after the commission and police jury's decision denying approval to develop its property] would appear to negate any claim that it has been denied all economically beneficial uses of its property."); Prewitt v. City of Rochester Hills, 105 F.Supp.2d 724, 729-30 (E.D. Mich. 2000), vacated in part, 54 F. App'x 817 (6th Cir. 2002) ("plaintiffs' [taking] claims . . . are defeated because plaintiffs are bound by the administrative findings that the property in question has not been rendered valueless. . . . In the present case, the state board adopted the administrative law examiner's finding that plaintiffs' house, even in its current condition, could be sold to a purchaser interested in doing the restoration work if plaintiffs would reduce their asking price and/or intensify their marketing efforts. This finding conclusively establishes that the denial of the demolition permit has not resulted in the loss of all reasonable beneficial use of plaintiffs' house"); Rzadkowolski v. Twp. of Metamora, No. 14-12480, 2016 WL 2756518, at *6 (E.D. Mich. May 12, 2016), order vacated in part on reconsideration sub nom. Rzadkowolski v. Metamora Twp., No. 14-12480, 2016 WL 3230535 (E.D. Mich. June 13, 2016) (finding that Plaintiff could not demonstrate that he was deprived of all economically beneficial value or productive use of the land "because it is undisputed that his property still retains economic value, per a letter from the township tax assessor who stated on August 25, 2015 that the property has a true cash value of $8,000, which is only $200 less than what Plaintiff paid for it."); Nammari v. Town of Winfield, No. 2:07-CV-306, 2008 WL 4757334, at *11 (N.D. Ind. Oct. 29, 2008) ("as Plaintiffs admit that they sold their ownership interest in Doubletree Estate, it is implausible that they were denied `all economically beneficial' use of the land.").
Having carefully considered both sides of the issue, the Court finds that the appropriate question is whether the Plaintiffs were deprived of all value in the property. Regardless of any ambiguity in Lucas, later Supreme Court cases make clear that, to prevail on a categorical taking claim, the property must lose all value. See Tahoe-Sierra, 535 U.S. at 332, 122 S. Ct. at 1484; Lingle, 544 U.S. at 539-40, 125, S. Ct. at 2082. Further, Hawkeye Commodity and the other district court cases are persuasive on this point.
Applying that standard to the facts in the record, the Court finds that the Plaintiff's Lucas claim fails. The Plaintiffs sold much of the property for over a million dollars, and this demonstrates that they were not deprived of all value in their property. No reasonable juror could conclude otherwise. Thus, the Plaintiffs' Lucas claim is dismissed.
Finally, even assuming that the question was whether the Plaintiffs had an economically viable use in their property (as opposed to value), the Court finds that summary judgment would still be warranted. Here, it is uncontested that, after the Planning Commission denied approval of the Mallard Trails subdivision, the Plaintiffs submitted and obtained approval of another subdivision that contained parts of the original Mallard Trails subdivision. (Doc. 62-2 at 8; Doc. 73-1 at 7-8.). Based on this fact, no reasonable juror could conclude that the Plaintiffs were denied all economic beneficial use of their entire 57.5 acres. See Tahoe-Sierra, 535 U.S. at 330, 122 S. Ct. at 1483 ("But our holding in Lucas was limited to the extraordinary circumstance when no productive or economically beneficial use of land is permitted. The emphasis on the word `no' in the text of the opinion was, in effect, reiterated in a footnote explaining that the categorical rule would not apply if the diminution in value were 95% instead of 100%.") (citations and quotations omitted)); Keystone Bituminous Coal Association v. DeBenedictis, 480 U.S. 470, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987) (owner was not deprived of economically beneficial use of its property where regulation at issue still allowed the owner to mine 50 percent of the value of its coal).
Accordingly, summary judgment is warranted on the Plaintiffs' categorical takings claim. This claim is dismissed.
The Court must now examine the Penn Central factors. These factors include (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," Penn Cent., 438 U.S. at 124, 98 S. Ct. at 2659 (citations omitted). Regulatory takings "necessarily entails complex factual assessments of the purposes and economic effects of government actions." Tahoe-Sierra, 535 U.S. at 323, 122 S. Ct. at 1479. Having carefully weighed these factors and the facts in the record, the Court finds that genuine issues of material fact preclude summary judgment on this claim.
Concerning the first factor, the "test for regulatory taking requires [Courts] to compare the value that has been taken from the property with the value that remains in the property[.]" Keystone Bituminous Coal Ass'n, 480 U.S. at 497, 107 S. Ct. at 1248. That is, they examine changes in market value. See Hodel v. Irving, 481 U.S. 704, 714-15, 107 S.Ct. 2076, 2082-83, 95 L. Ed. 2d 668 (1987). However, "[t]he Fifth Amendment prohibition against taking without compensation does not guarantee the most profitable use of property, and a diminution in value, standing alone, does not establish a taking." Jackson Court Condominiums, Inc. v. City of New Orleans, 874 F.2d 1070, 1080 (5th Cir. 1989) (citations omitted). Additionally, the Court can consider for this factor other economic benefits that the owner can derive from his property. Andrus v. Allard, 444 U.S. 51, 66, 100 S.Ct. 318, 327, 62 L. Ed. 2d 210 (1979). However, "[w]hen analyzing the economic impact of a regulation, the `loss of anticipated gains or potential future profits' is typically not considered." Hackbelt 27 Partners, L.P. v. City of Coppell, No. 15-11109, 2016 WL 5396660, at *5 (5th Cir. Sept. 27, 2016) (applying Texas law and citing Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 935 (Tex. 1998), which in turn relied upon Andrus v. Allard, 444 U.S. at 66); see also Rose Acre Farms, Inc. v. United States, 559 F.3d 1260, 1268 (Fed. Cir. 2009) (stating that "the vast majority of takings jurisprudence examines, under Penn Central's economic impact prong, not lost profits but the lost value of the taken property" and collecting cases on same).
Here, the Plaintiffs have submitted evidence demonstrating that they were deprived of the ability to build the subdivision of their choice on their property, which is a loss in value. They also provided the Plaintiffs' affidavit, which reflects a $1.3 million loss in profits. (Doc. 73-10 at 3.) As stated above, the Court cannot consider this fact for this prong. Lastly, the Plaintiffs filed an expert report indicating that the property at issue diminished in value in the amount of roughly $1.3 million. (Doc. 73-7 at 22.) This would tend to support the Plaintiffs' argument. However, that report also demonstrates that the land actually increased in value after the denial and that the $1.3 million calculation is based on lost profits. (Doc. 73-9 at 10.) This would tend to undercut the expert's conclusions. Under these circumstances, including the conflicts in the expert's report, the Court finds this factor neutral at this time.
The Court now turns to the second factor, interference with investment-backed expectations. "The existence of a regulatory regime does not per se preclude all investment-backed expectations for development." Palm Beach Isles Assocs. v. United States, 231 F.3d 1354, 1364 (Fed. Cir. 2000). Rather, "the regulatory regime in place at the time the claimant acquires the property at issue helps to shape the reasonableness of those expectations." Palazzolo, 533 U.S. at 633, 121 S. Ct. at 2466 (O'Connor, J., concurring). As one federal circuit court explained:
Cienega Gardens v. United States, 331 F.3d 1319, 1345-46 (Fed. Cir. 2003) (citations omitted).
Applying these standards, the Court finds that this factor weighs strongly in favor of the Plaintiffs. The Court recognizes that, above, it held that the Plaintiffs have not shown that it was "certain" that they would obtain approval. But the question here is not whether there was a "certainty." The question is whether a reasonable juror could conclude that, given (1) the Plaintiffs' compliance with the UDC and the Planning Commission's additional requests, and (2) the recommendation of the Planning Commission staff and the Department of Public Works, the Plaintiffs should have reasonably anticipated obtaining approval. The Court thinks that the Plaintiffs meet this standard, at least enough to survive summary judgment. The line is fine, but the Court believes it appropriate here.
Further, the Plaintiffs have submitted evidence that they would have earned a profit of over $1.3 million dollars if Mallard Trails had been developed. (Doc. 73-10 at 3.) The Court agrees with the Plaintiffs that the Defendants have presented no evidence demonstrating that this amount was unreasonable or incorrect. The fact that the property may have been in foreclosure does not mean, as a matter of law, these expectations were unreasonable. In sum, this factor weighs in favor of the Plaintiffs.
The final factor is the character of the government action. The Supreme Court has advised that, "[a] `taking' may more readily be found when the interference with property can be characterized as a physical invasion by government than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good." Penn Cent., 438 U.S. at 124, 98 S. Ct. at 2659.
Preliminarily, the Court notes that there is "a clear distinction between substantive due process analysis and Fifth Amendment takings analysis." Rose Acre Farms, Inc., 559 F.3d at 1276 (citing Lingle, 544 U.S. at 540, 125 S.Ct. 2074). See also Robert G. Dreher, Lingle's Legacy: Untangling Substantive Due Process From Takings Doctrine, 30 Harv. Envtl. L. Rev. 371, 402 (2006) ("[Lingle] rejects any normative component to takings law based on considerations of the efficacy or wisdom of the government's actions."). "We can no longer ask whether the means chosen by government advance the ends or whether the regulation chosen is effective in curing the alleged ill. All those concerns, albeit relevant concerns in many cases dealing with governmental regulations, are now confined to a substantive due process inquiry." Rose Acre Farms, Inc., 559 F.3d at 1278 (citing Equity Lifestyle Props., Inc. v. County of San Luis Obispo, 548 F.3d 1184, 1194 n. 17 (9th Cir. 2008) ("Due process violations cannot be remedied under the Takings Clause . . . ." (citing Lingle, 544 U.S. at 543, 125 S.Ct. 2074)). Thus, the Court's finding in the substantive due process section is not dispositive here.
Thus, for this factor, courts should consider "the actual burden imposed on property rights, or how that burden is allocated." Id. at 1278 (citing Lingle, 544 U.S. at 543, 125 S.Ct. 2074). The Court also examines "the magnitude or character of the burden that a particular regulation imposes upon private property rights" as well as "how any regulatory burden is distributed among property owners." Id. at 1279 (emphasis in original). Moreover, Courts should examine the "harm-preventing purpose of a regulation" — that is, whether the "restrictions were directed at the protection of public health and safety." Id. at 1281 (citations omitted).
Analyzing the relevant considerations for this factor, the Court finds that it likely weighs in favor of the Defendants. The restrictions appear directed at least in part at public safety. While there was a burden placed on the Plaintiffs' ability to build on their property, the regulatory burden of the Planning Commission is distributed equally across the community; as stated above, without more information about the nature of other projects in the area that were approved, the Court cannot determine at this time whether the Plaintiffs were singled out.
Given the findings on the three Penn Central factors, the Court concludes that this fact-intensive inquiry is best left to a jury. For these reasons, the Court denies the Defendants' motion on this issue.
The Defendants' next argument centers on whether the Plaintiffs have established municipal liability under 42 U.S.C. § 1983. As Defendants correctly assert, "municipal liability under section 1983 requires proof of three elements: a policymaker; an official policy; and a violation of constitutional rights whose `moving force' is the policy or custom." Piotrowski v. City of Houston, 237 F.3d 567, 578 (5th Cir. 2001) (citing Monell v. Dep't. of Soc. Servs., 436 U.S. 658, 694, 98 S. Ct. `, 2037, 56 L. Ed. 2d 611 (1978)).
The Defendants appear to attack each requirement, though at times indirectly. Concerning the first, the Defendants state that the "Planning Commission members vote to approve each matter that comes before them; they are not a policy-making body." (Doc. 62-1 at 19.) Concerning the second requirement, the Defendants contend that, for the following reasons, the Plaintiffs cannot prove an official policy: (1) because, by merely declining to approve of the preliminary plat, the Planning Commission made no statement of policy; (2) because this case involves solely state and local laws, so no federal laws were violated; and (3) because there is no evidence of deliberate indifference by any policymaker. Concerning the third Monell requirement, the Defendants maintain that, because the Plaintiffs' other constitutional claims fail, the Plaintiff's municipal liability claim also fails.
In response, the Plaintiffs argue that a policy can be established "based on an isolated decision made in the context of a particular situation if the decision was made by an authorized policymaker in whom final authority rested regarding the action ordered." (Doc. 73 at 12 (citing Cozzo v. Tangipahoa Par. Council—President Gov't, 279 F.3d 273, 289 (5th Cir. 2002)). The Plaintiffs state that this requirement is satisfied because state and local laws vest the Planning Commission with final decision making authority over approval of subdivision plats.
In reply, the Defendants claim that the Plaintiffs do "nothing more than assert conclusory allegations." (Doc. 76 at 9.) According to the Defendants, the Plaintiffs are subject to a heightened pleading requirement for allegations of a municipal custom. The Defendants assert that the Plaintiffs cannot prove any of the three Monell requirements and that their claims consequently fail.
In a surreply, the Plaintiffs argue that there is no heightened pleading requirement for Monell claims. The Plaintiffs reiterate that this Court already found that they stated a valid claim under Monell.
The Court finds that the Plaintiffs have demonstrated a genuine issue of fact precluding summary judgment on their Monell claim. The Fifth Circuit has explained:
Zarnow v. City of Wichita Falls, Tex., 614 F.3d 161, 167 (5th Cir. 2010).
Here, the Planning Commission is a policymaker. State law vests the Planning Commission with control over the authority and regulation of subdivision plats. The following statutes demonstrate this:
Each of these statutes supports the conclusion that planning commissions are policymakers within their jurisdictions with respect to the approval of subdivision plats.
Similarly, East Baton Rouge Parish has vested authority in the Planning Commission in accordance with state law. UDC § 1.1 provides the authority for and policy behind the adoption of the regulations contained in the code:
(Doc. 73-2 at 1). UDC § 1.2 states that, "Every subdivision of land or site or tract development . . . within the jurisdiction of the Parish . . . shall be shown upon a plat and submitted to the Planning Commission for approval or disapproval.") (Doc. 73-2 at 1). UDC § 3.04(B) also provide:
(Doc. 73-2 at 5); see also East Baton Rouge Plan of Government § 10.04(B), Doc 73-3 at 6, also available at
Thus, it is clear that, by formal act, the Planning Commission is the City/Parish's policymaker with respect to the approval of subdivision plats. The Planning Commission "takes the place of [the Parish] in [this] designated area of city administration," and it "decide[s] the goals for [this] particular city function and devise[s] the means of achieving those goals." Zarnow 614 F.3d at 167. Thus, the first requirement of Monell liability has been satisfied.
The second requirement has also been satisfied. The Fifth Circuit has recognized that an "[o]fficial policy is . . . [a] policy statement, ordinance, regulation, or decision that is officially adopted and promulgated by the municipality's lawmaking officers or by an official to whom the lawmakers have delegated policy-making authority." Bennett v. City of Slidell, 735 F.2d 861, 862 (5th Cir. 1984). Thus, "[a] plaintiff may also establish a custom or policy based on an isolated decision made in the context of a particular situation if the decision was made by an authorized policymaker in whom final authority rested regarding the action ordered." Cozzo v. Tangipahoa Par. Council—President Gov't, 279 F.3d 273, 289 (5th Cir. 2002) (citations omitted). Here, a reasonable jury could conclude that the Planning Commission members officially rendered a decision by disapproving of the Plaintiffs' preliminary plat and that this decision was made by an authorized policymaker with knowledge and final authority on the matter.
The Defendants cite to no law holding that this is insufficient to constitute a policy for summary judgment purposes. The Defendants are correct that, in the Fifth Circuit, "[t]he description of a policy or custom and its relationship to the underlying constitutional violation . . . cannot be conclusory; it must contain specific facts." Spiller v. City of Texas City, Police Dep't, 130 F.3d 162, 167 (5th Cir. 1997). But such facts are clear from the record: the rejection of the Plaintiffs' preliminary plat. Even if there were a heightened pleading requirement here, which is doubtful,
Finally, the Court has already determined that there are questions of fact as to whether the Defendants violated the Plaintiffs' Fifth Amendment right against unlawful takings. For similar reasons, the Court finds that a reasonable juror could conclude that the Planning Commission members' decision was the "moving force" of this constitutional violation, which clearly constitute violations of federal law.
Thus, the Plaintiffs' municipal liability claim survives. The Defendants' motion for summary judgment on this issue is denied.
The Defendants assert that, under state law, a "regulatory taking occurs when a regulation destroys a major portion of the property's value or eliminates the practical economic uses of the property." (Doc. 62-1 at 11 (emphasis omitted).) Here, according to the Defendants, the Plaintiffs were not deprived of a major portion of the property's value; the evidence shows that the Plaintiffs sold much of their property for over one million dollars. Additionally, the Plaintiffs were not deprived of all economically beneficial use, as they were able to develop their property.
The Plaintiffs respond that the appropriate test was laid out by the Louisiana Supreme Court, and it does not consider whether a "major portion" has been eliminated. Rather, this test looks at whether the government action has deprived a landowner of the property's "highest and best use." (Doc. 73 (citations omitted).) Further, the Defendants ignore that "value" includes the lost profits that they could have received from developing the property. Thus, the record evidence shows they lost more than half the value they might have expected to reap from their property.
The Defendants respond that the Plaintiffs' cited three-part test ignores the Court's previous ruling on the motion to dismiss. Further, even if profits were considered, the Plaintiffs have profited over $1 million from the sale of their property. Any additional damages would be a "windfall."
Article I, Section 4 of the Louisiana Constitution provides that "Every person has the right to acquire, own, control, use, enjoy, protect, and dispose of private property. This right is subject to reasonable restrictions and the reasonable exercise of the police power." La. Const. art. I, § 4. Section 4 further states, "Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation paid to the owner or into court for his benefit." Id.
As this Court explained in its ruling on the motion to dismiss, "[a]t issue here is a regulatory taking, which, under Louisiana law, `occurs when the regulation destroys a major portion of the property's value or eliminates the practical economic uses of the property.'" (Doc. 36 at 17 (citing State, Dept. of Soc. Servs. v. City of New Orleans, 95-1757 (La. App. 4 Cir. 5/29/96); 679 So.2d 149, 151; Layne v. City of Mandeville, 93-0046 (La. App. 1 Cir. 12/29/93); 633 So.2d 608, 612).)
While, in the briefing for this motion, the parties appear to dispute the appropriate standard to apply, that issue appears to be resolved in the Plaintiffs' proposed jury instructions. There, the Plaintiffs cite to State of Louisiana, Department of Social Services (as well as an additional case) and recite the above rule on this issue from the Court's ruling on the motion to dismiss. They also state that this is "an accurate recitation of the law." (Doc. 110 at 19-20.) Thus, the Court will consider the issue resolved.
Applying this standard, the Court finds that a question of fact exists as to whether a regulatory taking has occurred under Louisiana law. As stated above, the Plaintiffs have presented evidence demonstrating that their property suffered a $1.3 million dollar depreciation in value. (Doc. 73-7 at 22.) While the Court determined above that the Plaintiffs could not prove that they were deprived of all value, here the standard is whether they were deprived of a major portion of the property's value. The Court finds that, even considering the sale of the property, a reasonable juror could conclude that a $1.3 million dollar deprivation in value constitutes a deprivation of a major portion of the property's value. At the very least, this is a question best left for the jury. Accordingly, summary judgment on this issue is denied.
Accordingly,
Id., 135 S. Ct. at 346-347 (emphasis added). In any event, this is a ruling on a motion for summary judgment, not a motion to dismiss.
