Gerald Ostipow v. William Federspiel

• Court: Court of Appeals for the Sixth Circuit
• Decided: September 29, 2023
• Docket: 22-1414
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 23a0416n.06

Case No. 22-1414 FILED UNITED STATES COURT OF APPEALS Sep 29, 2023 FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk

) GERALD S. OSTIPOW, individually and as ) Personal Representative of the Estate of ) Royetta L. Ostipow, ) ON APPEAL FROM THE UNITED Plaintiff-Appellant, ) STATES DISTRICT COURT FOR ) THE EASTERN DISTRICT OF v. ) MICHIGAN ) WILLIAM L. FEDERSPIEL, ) OPINION Defendant-Appellee. ) )

BEFORE: BATCHELDER, GIBBONS, and READLER, Circuit Judges.

CHAD A. READLER, Circuit Judge. Fifteen years ago, Saginaw County officials seized

Gerald and Royetta Ostipow’s property. Despite invoking both state and federal remedies, plaintiff

Gerald Ostipow, individually and on behalf of Royetta’s estate, has yet to be compensated for that

seizure. Previously, we held that Ostipow’s recourse was through the Michigan state system, not

the federal courts. Back before us, Ostipow again faults Sheriff William Federspiel for failing to

provide Ostipow the compensation he says is due. This prolonged denial, Ostipow claims,

amounts to fresh violations of the Takings Clause as well as substantive due process. We disagree

and affirm the district court’s decision awarding summary judgment to Federspiel.

I.

The facts of this case are mostly as they were before. See Ostipow v. Federspiel

(“Ostipow I”), 824 F. App’x 336, 338–40 (6th Cir. 2020). The crux of the dispute is the state’s No. 22-1414 Ostipow v. Federspiel

seizure of the Ostipows’ farmhouse and property. Id. at 338. Seemingly unbeknownst to his

parents, the Ostipows’ son had converted the farmhouse into a grow house. Id. Eventually, the

police arrested him, resulting in various drug-crime convictions and leading prosecutors to seize

the family property. Id. at 338–39. The Saginaw County Circuit Court entered an order of

forfeiture, pursuant to which the seized property was sold. Id. at 339. After multiple state court

appeals, the Ostipows received a judgment entitling them to some proceeds from the sale. Id.

With that judgment in hand, and with no payment forthcoming, the Ostipows previously

pursued Takings Clause and substantive due process claims, among others, against Federspiel in

the district court. Id. The district court granted summary judgment to Federspiel, id. at 339–40, a

decision we affirmed. Id. at 347. Instructive there was Bennis v. Michigan, 516 U.S. 442, 452–

53 (1996), which, we noted, held that “a state’s seizing and retaining property as part of a criminal

investigation is not a ‘taking’ for a ‘public purpose’ under the Fifth Amendment.” Ostipow I, 824

F. App’x at 341. Nor, we observed, is there a “right to instantaneous satisfaction of a judgment

when a governmental entity is involved.” Id. at 345. Accordingly, we directed Ostipow and

Federspiel to use the state law mechanisms available to them in the hopes of “expeditiously”

resolving their dispute. Id. at 344.

Our hopes seemingly were just that. Eight months passed without much change to the

status quo. Then, Gerald Ostipow returned to state court, filing a new suit against Federspiel, one

Federspiel removed to federal court. Ostipow realleged federal takings and substantive due

process violations and added two state law claims. Relying mainly on our Ostipow I opinion, the

district court granted Federspiel summary judgment and declined to exercise supplemental

jurisdiction. Ostipow timely appealed.

2 No. 22-1414 Ostipow v. Federspiel

II.

On balance, we agree that Federspiel is entitled to summary judgment. Ostipow’s takings

claim is foreclosed by our earlier decision, and his substantive due process claim fails for many of

the same reasons. We take the issues in turn.

A.

The legal backdrop for this long-running dispute is the Fifth Amendment’s bar

(as incorporated against the states through the Fourteenth Amendment) on the government’s taking

private property for public use without just compensation. U.S. CONST. amends. V & XIV;

see also Chicago, B. & Q.R. v. City of Chicago, 166 U.S. 226, 241 (1897). When a government

taking occurs, a property owner may invoke 42 U.S.C. § 1983 to “sue the government . . . in federal

court” to ensure that the property owner does in fact get paid. Knick v. Township of Scott, 139 S.

Ct. 2162, 2170 (2019). As with other § 1983 suits, however, the governmental defendant may

invoke qualified immunity to favorably resolve the suit before trial. Ostipow I, 824 F. App’x at

341. That is the tack Federspiel takes here.

Under the familiar qualified immunity framework, Ostipow must show both that Federspiel

took his private property for public use without just compensation and that it was clearly

established that his actions ran afoul of the Fifth Amendment at the time they occurred. See

Pearson v. Callahan, 555 U.S. 223, 231–32 (2009). Critically, we do not write on a clean slate.

And that history largely forecloses Ostipow’s taking claim. Ostipow I, 824 F. App’x at 340–44.

As we previously explained, “a state’s seizing and retaining property as part of a criminal

investigation is not a ‘taking’ for a ‘public purpose’ under the Fifth Amendment, and thus does not

give rise to a claim for just compensation.” Id. at 341.

3 No. 22-1414 Ostipow v. Federspiel

That decision has preclusive force today. Parties who receive a final merits decision by a

court of competent jurisdiction are precluded from relitigating claims that were or could have been

raised in the earlier proceeding. Allen v. McCurry, 449 U.S. 90, 94 (1980); Bittinger v. Tecumseh

Prods. Co., 123 F.3d 877, 880 (6th Cir. 1997). Our prior holding resolved in Federspiel’s favor

the merits question of whether Ostipow could prove Federspiel’s actions violated the Fifth

Amendment. Ostipow I, 824 F. App’x at 342. Settled principles bar Ostipow from relitigating

that question today.

That said, we previously emphasized that Ostipow possessed a state court judgment

entitling him to compensation related to the seizure. We left it to the parties to ensure the

judgment’s enforcement. Id. at 343–44 (noting that Ostipow could pull the available Michigan

law levers to “ensure the satisfaction of [the] judgment.”). Yet relief does not appear to be

forthcoming.

Ostipow attributes that delay to Federspiel’s “chang[ing] [his] mind after Ostipow I” about

his commitment to compensate Ostipow. Appellant’s Br. at 21–22. Even if true, that development

does not alter our Fifth Amendment analysis. Both then and now, Ostipow at bottom seeks just

compensation for the retention of the family’s farmhouse and its contents seized as part of

a criminal investigation. See McCarthy v. City of Cleveland, 626 F.3d 280, 284 (6th Cir. 2010)

(“A physical taking occurs when the government physically intrudes upon a plaintiff’s property.”)

(quotation omitted). We have already said that those events alone do not give rise to a federal

claim for compensation. Ostipow I, 824 F. App’x at 342. Now, as before, “a judgment against a

government entity is not a right to payment at a particular time.” Id. at 343. At day’s end, Ostipow

still holds a judgment entitling him to payment—one unconnected to his Takings Clause claim—

that he can enforce in state court. But so far, at least, he has seemingly chosen against doing so.

4 No. 22-1414 Ostipow v. Federspiel

Instead, Ostipow continues to believe his remedies are in this federal forum. For support,

he cites two out-of-circuit cases holding that retention of property seized according to the state’s

police powers can itself be a taking, if those powers no longer justify the retention. See Jenkins

v. United States, 71 F.4th 1367, 1373 (Fed. Cir. 2023) (“While the United States’ police power

may insulate it from liability for an initial seizure, there is no police power exception that insulates

the United States from takings liability for the period after seized property is no longer needed for

criminal proceedings.”); Frein v. Pa. State Police, 47 F.4th 247, 252–53 (3d Cir. 2022) (“[T]he

government is permitted to seize evidence for use in investigation and trial, but that such property

must be returned once criminal proceedings have concluded, unless it is contraband or subject to

forfeiture.”) (citation omitted). Assuming these recent cases correctly identify the contours of the

Fifth Amendment, Ostipow was late to raise the point. The police power, after all, would have

ceased to justify Federspiel’s retention of his property once Ostipow’s son’s criminal proceedings

concluded, a point that had already passed by the time of Ostipow I. Yet by and large, Ostipow

never argued in our earlier case—nor in this case (until his reply brief on appeal)—that his son’s

conviction marked the moment the police power could no longer be relied on to justify retention

of the Ostipows’ property. In other words, both preclusion and forfeiture principles likely bar the

argument Ostipow makes now. See Bragg v. Flint Bd. of Educ., 570 F.3d 775, 776 (6th Cir. 2009)

(claim preclusion); Buetenmiller v. Macomb Cnty. Jail, 53 F.4th 939, 946 (6th Cir. 2022)

(forfeiture).

Ostipow faces a second, equally significant, hurdle. To overcome Federspiel’s assertion

of qualified immunity, the purported constitutional rule violated by the sheriff needed to be clearly

established in our circuit at the time of the violation. Pearson, 555 U.S. at 231–32; Campbell

v. Cheatham Cnty. Sheriff’s Dep’t, 47 F.4th 468, 481 (6th Cir. 2022) (“[W]e look to the law at the

5 No. 22-1414 Ostipow v. Federspiel

time of the officer’s conduct[.]”); Arrington-Bey v. City of Bedford Heights, 858 F.3d 988, 993

(6th Cir. 2017) (“We begin with, and could end with, the reality that [the plaintiff] points to no

Supreme Court or Sixth Circuit case” that clearly establishes an officer’s conduct was

unconstitutional). And the two opinions Ostipow highlights are neither ours nor the Supreme

Court’s. Nor, for that matter, could they reflect any manner of established law before the first one

issued just last year. So even without his preclusion and forfeiture problems, Ostipow could not

satisfy the clearly established prong of the qualified immunity test.

B.

That leaves Ostipow’s substantive due process claim. To prevail, he needs to demonstrate

a constitutionally protected interest that was infringed by arbitrary and capricious state action.

Golf Vill. N. v. City of Powell, 42 F.4th 593, 601 (6th Cir. 2022). In the context of this case, he

needs to show that the seizure and retention of the family property by the state was “so brutal and

offensive that [those actions] do not comport with traditional ideas of fair play and decency.” Id.

(brackets and quotations omitted) (quoting County of Sacramento v. Lewis, 523 U.S. 833, 847

(1998)). As already explained, any claims stemming from the initial seizure or retention of the

family property following their son’s conviction would be foreclosed by Ostipow I. Substantive

due process claims alleging that the continued retention of the Ostipows’ property was arbitrary

and capricious, however, present a distinct issue that would not be precluded by earlier litigation.

See Whole Woman’s Health v. Hellerstedt, 136 S. Ct. 2292, 2305 (2016); see also id. at 2335

(Alito, J., dissenting) (describing the proposition that “a prior judgment does not preclude new

claims based on acts occurring after the time of the first judgment” as “unremarkable”).

That begs the question whether Federspiel’s continued failure to even attempt to pay

Ostipow fits the latter description. To our minds, it does not. See Golf Vill. N., 42 F.4th at 602

6 No. 22-1414 Ostipow v. Federspiel

(denying substantive due process violation where plaintiff sought relief for defendant’s refusal to

act “without the benefit of complete information” because plaintiff did not do their part).

Remember that Federspiel is currently subject to a state court judgment that merely requires that

he give Ostipow whatever compensation is just. The judgment does not tell him the amount owed.

Nor does it (or, for that matter, our earlier order) necessarily task Federspiel with figuring out what

amount would be just. Federspiel left the Ostipows to decide whether (and, if so, how) to seek

reimbursement. While another state official may have acted in a different manner, Federspiel’s

purported inaction in the face of uncertainty is hardly extreme enough to constitute a violation of

substantive due process. See id.

Ostipow argues otherwise. Part of the egregiousness, he says, was Federspiel’s “duty (and

promise)” to “figure out how and how much to pay” him. But neither a duty nor a promise has

been established. The underlying state court order supposedly imposing that duty merely indicated

that it was Federspiel’s duty to pay the Ostipows what they were owed. The “how and how much”

questions were left to the parties jointly, with the order anticipating that the parties would resolve

the issue during settlement negotiations. And because we look only to events that happened after

Ostipow I, it is worth reiterating that, by order, the duty to iron out those details was assigned to

the parties jointly, not Federspiel alone. 824 F. App’x at 344. It does not shock the conscience to

hold off on paying another until it is clear how much is owed. See Golf Vill. N., 42 F.4th at 602.

* * * * *

We understand Ostipow’s frustration as his decade-and-a-half search for reparations

continues. But those efforts must pick back up elsewhere, perhaps with another look at Michigan’s

laws relating to the enforcement of its courts’ judgments. The district court’s judgment is affirmed.