RLR Investments, LLC v. City of Pigeon Forge, Tennessee

CourtDistrict Court, E.D. Tennessee
DecidedNovember 30, 2020
Docket3:19-cv-00279
StatusUnknown

This text of RLR Investments, LLC v. City of Pigeon Forge, Tennessee (RLR Investments, LLC v. City of Pigeon Forge, Tennessee) is published on Counsel Stack Legal Research, covering District Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RLR Investments, LLC v. City of Pigeon Forge, Tennessee, (E.D. Tenn. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE at KNOXVILLE

RLR INVESTMENTS, LLC, ) ) Plaintiff, ) ) No. 3:19-CV-279 v. ) ) Judge Collier CITY OF PIGEON FORGE, TENNESSEE, ) Magistrate Judge Poplin ) Defendant. )

M E M O R A N D U M

Before the Court are a motion to dismiss (Doc. 16) and a supplemental motion to dismiss (Doc. 25) filed by Defendant, the City of Pigeon Forge, Tennessee (the “City”), seeking dismissal of the claims of Plaintiff, RLR Investments, LLC (“RLR”). Plaintiff responded in opposition to each motion (Docs. 22, 29), and Defendant replied (Docs. 23, 30). The Court will GRANT Defendant’s motion to dismiss (Doc. 16) on the grounds that the Court lacks subject-matter jurisdiction and will DISMISS RLR’s action WITHOUT PREJUDICE. I. BACKGROUND Plaintiff owns two neighboring tracts of real property within the boundaries of the City. One tract (“Tract 1” or the “Hotel Property”) contains a private resort hotel for the use of RLR’s employees, and, until the events at issue here, contained parking spaces for the hotel. The other tract (“Tract 2” or the “Duplex Property”) contains a duplex building. Both tracts border the Little Pigeon River. Although the two tracts share a border and are currently under common ownership, they are not unified lots and are not bound to each other in any way. In 2015, the City undertook the construction of a pedestrian walkway (the “Greenway”) along the Little Pigeon River. As part of the Greenway project, in June 2015, the City filed a petition for condemnation (the “Petition”) against RLR in the Circuit Court for Sevier County, Tennessee (the “Circuit Court”). The Petition sought a permanent easement along the river frontage of both tracts for the planned Greenway. The permanent easement on the Hotel Property required the destruction of some or all of the hotel’s parking spaces. In addition to the permanent easements, the Petition sought temporary construction

easements on both tracts. The temporary easement on the Duplex Property consisted of 5,210 square feet on which the City intended to construct parking spaces for the hotel to replace the spaces on the Hotel Property the City would destroy for the Greenway. When the City filed its Petition, federal law did not allow a property owner to bring a federal takings claim in federal court until after a state court had denied the property owner’s claim for just compensation. Knick v. Twp. of Scott, Penn., 139 S. Ct. 2162, 2167 (2019) (describing then-current state of federal law on takings proceedings under Williamson Cnty. Reg’l Plan. Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985)). In a legal Catch-22, however, once a state court did rule on compensation, the state court’s decision would generally have

preclusive effect in any later federal action. Id. (citing San Remo Hotel, L.P. v. City & Cnty. of S.F., 545 U.S. 323 (2005)). A property owner at that time was thus generally limited to whatever remedies could be obtained in state court for a violation of the owner’s federal rights. Having no viable cause of action in federal court at the time, RLR objected to the Petition in the Circuit Court on two grounds. First, RLR objected to the amount of compensation the City was offering. Second, it challenged the City’s right to take any part of the Duplex Property to build parking spaces to benefit the Hotel Property. RLR argued such a taking was unconstitutional, in that it was for private, rather than public, use. RLR therefore also sought damages for the injury suffered by the Hotel Property in losing its parking places and for the injury suffered by the Duplex Property in having parking spaces built on it to benefit the Hotel Property. On May 31, 2016, after a hearing, the Circuit Court issued an order (the “Order of Possession”) granting the City the right to take the property described in the Petition, including the temporary easement for construction of the replacement parking spaces. The City then took

possession of the property identified in the Order of Possession. The matter remained pending in the Circuit Court to value the takings for compensation purposes. The City completed construction of the part of the Greenway crossing RLR’s two tracts in August 2018. It did not, however, construct replacement parking for the Hotel Property on the Duplex Property. RLR characterizes this refusal as the City’s effort to avoid RLR’s claim for damages related to the impermissible private purpose of the taking. On May 30, 2018, RLR filed a motion in the Circuit Court to enforce the terms of the Order of Possession. RLR argued that under Tennessee Law, once an order of possession is entered, a government cannot “give back” any part of the condemned property. RLR argued the City must,

instead, dismiss its original Petition and file a new petition seeking condemnation only of the property necessary for the public purpose of the Greenway. At a hearing on the motion, counsel for the City admitted, “[t]his is parking on private land that does not benefit the public purpose of the Greenway.” (Doc. 1 ¶ 26.) In September 2018, the Circuit Court issued an order finding that the construction of parking for the Hotel Property on the Duplex Property was not for a public purpose. The Circuit Court held, however, that the City was not required to build the replacement parking, and that the City’s failure to build the parking was not an abandonment of the project. On March 4, 2019, RLR filed a motion for summary judgment in the Circuit Court. RLR argued the City’s admission and the Circuit Court’s finding that part of the taking was not for a public purpose was a fatal flaw requiring dismissal of the Petition. The City’s response to the motion for summary judgment again admitted the proposed parking spaces on the Duplex Property did not benefit the Greenway’s public purpose. At the hearing on the motion on June 17, 2019, the Circuit Court also again acknowledged the parking spaces were not for a public purpose, but declined to dismiss the Petition and stated it would let the valuation proceedings continue.

On June 21, 2019, four days after the Circuit Court’s hearing on RLR’s motion for summary judgment, the Supreme Court of the United States issued its decision in Knick, 139 S. Ct. 2162. The Supreme Court overruled the state-litigation requirement of Williamson County, holding that “[a] property owner may bring a takings claim [in federal court] under [42 U.S.C.] § 1983 upon the taking of his property without just compensation by a local government.” Id. at 2179. Citing Knick, RLR filed its current federal action on July 17, 2019. (Doc. 1 (the “Complaint”) ¶ 6.) Count One of the Complaint asserts a claim for unlawful taking under 42 U.S.C. § 1983 and the Fifth and Fourteenth Amendments to the U.S. Constitution. (Id. ¶¶ 36–41.) Count Two of the Complaint1 seeks a declaratory judgment that the City “may not take RLR’s

land without a proper public purpose pursuant to any legal authority” and may not abandon the improper part of its taking just to avoid paying RLR just compensation for the improper taking. (Id. ¶¶ 42–46.) The prayer for relief requests, among other remedies: a declaration that the Order of Possession is unconstitutional in that the City took RLR’s property without a proper public purpose; an injunction against the City preventing the City from “exercising any ownership rights in RLR’s property pursuant to the Order of Possession and from enforcing the Order of

1 The Complaint asserts two causes of action. (Doc.

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Bluebook (online)
RLR Investments, LLC v. City of Pigeon Forge, Tennessee, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rlr-investments-llc-v-city-of-pigeon-forge-tennessee-tned-2020.