Filed: August 1, 2013
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 12-1538 (2:10-cv-00029-D)
TRUSTEE ROC F. SANSOTTA, Trustee and Executor for Estate of Father Joseph Klaus; ROC F. SANSOTTA, Individually; RALPH S. TOMITA; GLORIA H. TOMITA; CAROLE A. SHACKELFORD; JAMES BREGMAN; LINDA ATSUS; GEORGE D. RUSIN,
Plaintiffs – Appellants,
v.
TOWN OF NAGS HEAD,
Defendant – Appellee,
and
TIMOTHY WILSON, Individually,
Defendant.
O R D E R
The Court amends its opinion filed July 25, 2013, as
follows:
On page 15, first full paragraph, line 1 -- the word
“as” is corrected to read “was.”
For the Court – By Direction
/s/ Patricia S. Connor Clerk PUBLISHED
No. 12-1538
TRUSTEE ROC F. SANSOTTA, Trustee and Executor for Estate of Father Joseph Klaus; ROC F. SANSOTTA, Individually; RALPH S. TOMITA; GLORIA H. TOMITA; CAROLE A. SHACKELFORD; JAMES BREGMAN; LINDA ATSUS; GEORGE D. RUSIN,
Appeal from the United States District Court for the Eastern District of North Carolina, at Elizabeth City. James C. Dever III, Chief District Judge. (2:10-cv-00029-D)
Argued: May 17, 2013 Decided: July 25, 2013
Before SHEDD, DAVIS, and DIAZ, Circuit Judges.
Affirmed in part, reversed in part, and remanded by published opinion. Judge Shedd wrote the opinion, in which Judge Davis and Judge Diaz joined. ARGUED: J. David Breemer, PACIFIC LEGAL FOUNDATION, Sacramento, California, for Appellants. Benjamin Marshall Gallop, HORNTHAL, RILEY, ELLIS & MALAND, LLP, Nags Head, North Carolina; John D. Leidy, HORNTHAL, RILEY, ELLIS & MALAND, LLP, Elizabeth City, North Carolina, for Appellee. ON BRIEF: William J. Brian, Jr., Keith P. Anthony, Research Triangle Park, North Carolina, for Appellants.
2 SHEDD, Circuit Judge:
The owners of six beachfront cottages sued the Town of Nags
Head, North Carolina, in state court after the Town declared
their cottages to be in violation of its nuisance ordinance.
After the Town removed the case to federal court, the district
court granted summary judgment to the Town on the owners’
procedural due process and equal protection claims and dismissed
the owners’ takings claim as unripe. The cottage owners now
appeal the district court’s decision. For the following
reasons, we affirm the district court’s grant of summary
judgment, reverse the district court’s decision to dismiss the
takings claim, and remand the case for further proceedings. 1
I.
A.
Nags Head (“the Town”) is located along the North Carolina
Outer Banks on the Atlantic Ocean. Roc Sansotta, Ralph and
Gloria Tomita, Carole Shackelford, James Bergman, Linda Atsus,
George Rusin, and the estate of Joseph Klaus own six cottages on
Seagull Drive in the Town. Roc Sansotta manages these cottages. 2
1 Although this case arises out of the same general facts as Toloczko v. Town of Nags Head, -- F.3d -- (4th Cir. 2013), this case involves different plaintiffs and different legal claims. 2 For simplicity, we refer to the Plaintiff-Appellants collectively as “the Owners.”
3 Like many parts of North Carolina’s Outer Banks, the Town’s
beaches have eroded in recent decades, some of them at a rate of
approximately two feet per year for over two decades. The
beaches near Seagull Drive have eroded much faster, at a rate of
approximately eight feet per year during these decades. As the
beaches have eroded, cottages that were once landward of the
first line of stable, natural vegetation are now seaward of this
line and on the beach itself, between the vegetation line and
the Atlantic Ocean. Since 2001, the six cottages involved in
this case have been seaward of the vegetation line. Being
located directly on the beach creates greater potential for
damage to the cottages during severe storms, so Sansotta has
taken measures to protect the cottages, including extending the
pilings supporting the cottages 25 feet into the ground and
putting extra sand around the cottages before storms.
On November 12, 2009, a major storm hit the Town, damaging
multiple beachfront cottages. During the storm, the ocean
breached Seagull Drive and washed out part of the road. Town
officials then set up a barricade and ordered Sansotta and the
contractors that he had hired to help protect the cottages to
stop working on the cottages and leave the beach. Sansotta and
his contractors ultimately complied with this order. Despite
Sansotta’s efforts to protect the six cottages that he managed,
4 the storm washed away much of the sand from around the cottages,
resulting in their septic tanks being exposed and other damage.
The Town’s Nuisance Ordinance provides three bases for
declaring a building to be a nuisance as a result of storm or
erosion damage. It states:
The existence of any of the following conditions associated with storm-damaged or erosion-damaged structures or their resultant debris shall constitute a public nuisance.
(a) Damaged structure in danger of collapsing;
(b) Damaged structure or debris from damaged structures where it can reasonably be determined that there is a likelihood of personal or property injury;
(c) Any structure, regardless of condition, or any debris from damaged structure which is located in whole or in part in a public trust area or public land. 3
3 The public trust doctrine is the principle, rooted in Roman civil law and English common law, that the public has the right to access and use navigable waters and the state will protect that right. In the United States, this doctrine is a matter of state law. PPL Montana, LLC v. Montana, 132 S. Ct. 1215, 1234–35 (2012).
The Town and the Owners strongly disagree about the scope of the public trust in North Carolina. They agree that “wet beach”—that is, the beach seaward of the mean high water mark— may not be privately owned but that “dry beach”—that is, the beach between the mean high water mark and the first line of stable vegetation—may be privately owned. See Appellant’s Br. at 6; Appellee’s Br. at 20. They disagree, however, on whether both of these parts of the beach are part of the public trust. (Continued) 5 Nags Head, N.C., Code § 16-31(6) (emphasis added).
On November 30, 2009, Town Manager Cliff Ogburn notified
the Owners by letter that the Town was declaring the cottages to
be nuisances under subsections (b) and (c) of § 16-31(6). The
letter informed the Owners that if the nuisance was not abated
within 18 days, the Town would impose civil fines of $100 per
day per cottage. Based on the Town’s reliance on subsection
(c), the only way that the Owners could abate the nuisance was
to remove the cottages. Because demolishing the cottages was
the only way to abate the nuisance, the nuisance declaration
informed the Owners that no development permits would be issued
for the cottages. 4 The cottages remained standing in late
January 2010, at which time the Town began imposing the fines.
The Town views the public trust as encompassing the entire beach, both the “wet beach” and the “dry beach.” See Appellee’s Br. at 21. The Owners, on the other hand, contend that only the “wet beach” is part of the public trust. See Appellant’s Br. at 8–9. Ultimately, despite the vigor with which the parties dispute this issue, we need not address it because that issue is irrelevant to the legal analysis required here. 4 Eventually, the Town changed its no-permit policy, and it granted permits to other cottage owners. Sansotta claims he was never told of this change in policy, and based on his belief that the Town would not issue permits, he never applied to the Town for a permit for any of the cottages he managed.
Relatedly, in July 2010, the Town amended its ordinances to prohibit the issuance of permits for any structure that had been declared a nuisance under § 16-31(6)(c). The July 2010 (Continued) 6 In addition to these six cottages, the Town had also
declared 20 other cottages nuisances, four before the November
12 storm and 16 after. Although the owners of some cottages
demolished their cottages based on the declaration, other owners
have fought the declaration, resulting in litigation in both
state and federal court. See, e.g., Toloczko, -- F.3d –-; Town
of Nags Head v. Cherry, Inc., 723 S.E.2d 156 (N.C. Ct. App.
2012).
B.
In May 2010, approximately four months after the Town began
imposing these fines, the Owners filed suit against the Town in
state court. The Town timely removed the case to the federal
district court in the Eastern District of North Carolina. After
various motions in the district court, the Owners’ second
amended complaint asserted 14 claims against the Town, stating
claims under both federal and state law. 5 The Town asserted four
ordinance was the subject of separate litigation between the Owners and the Town, but it is not relevant to the legal analysis here. See Sansotta v. Town of Nags Head (“Sansotta II”), 2:11-CV-3-D, 2012 WL 2919895 (E.D.N.C. July 17, 2012). 5 The Owners brought five federal claims: (1) a declaratory judgment that the Town’s actions deprived the Owners of their substantive due process rights; (2) a declaratory judgment that the Town’s actions deprived the Owners of their procedural due process rights; (3) a declaratory judgment that the Town’s actions deprived the Owners of equal protection under the law; (4) a § 1983 claim based on the constitutional violations; and (Continued) 7 counterclaims, three of which sought an order of abatement, each
on a different legal basis, and one of which sought recovery of
the civil penalties that the Town had imposed.
While this litigation was ongoing, in early 2011 the Town
obtained permission from the U.S. Army Corps of Engineers to
undertake a massive $36 million beach renourishment project. By
August 2011, the part of the renourishment project near the six
cottages was completed, resulting in 200 feet of new beach in
front of the cottages. Based on the new beach, the Town
withdrew the nuisance declaration based on § 16-31(6)(c) in
September 2011; the Town claimed that the cottages were still in
the public trust but that they “no longer impermissibly or
unacceptably restrict or obstruct the use of and access to the
(5) a regulatory takings claim under the Fifth Amendment. They also brought nine state-law claims: (1) a declaratory judgment that cottages are not in public trust area; (2) a declaratory judgment that § 16-31(6)(c) exceeds the Town’s authority; (3) a declaratory judgment that the Town’s actions violated N.C. Gen. Stat. §§ 160A-441 et seq.; (4) a declaratory judgment that the Town lacks the authority to declare structures on the “dry beach” to be nuisances; (5) a declaratory judgment that § 16- 31(6)(c) does not authorize the Town to declare structures on the “dry beach” to be nuisances; (6) a declaratory judgment that the Town’s restricting access to the cottages was unlawful; (7) an inverse condemnation claim; (8) a negligence claim based on the Town’s restricting access to the cottages on the day of the storm and the Town’s failing to inspect the cottages before issuing the nuisance declaration; and (9) a claim for preliminary and permanent injunctions against the Town’s efforts to demolish the cottages, assess civil penalties, or prevent the Owners from protecting the cottages.
8 ocean beach.” J.A. 784. The Town also invited the Owners to
apply for permits to repair the cottages. The nuisance
declaration based on § 16-31(6)(b), however, remained in effect.
C.
Both parties moved for partial summary judgment. The
district court granted summary judgment to the Town on the
Owners’ procedural due process claim because the Town never
deprived the Owners of a property right, or alternatively,
because the Owners had a postdeprivation remedy through an
inverse condemnation proceeding. The court granted summary
judgment to the Town on the equal protection claim because the
Town’s decision to declare only some cottages on the beach to be
nuisances was rationally related to ensuring easy access for
emergency vehicles along the beach. 6 In addition to granting
summary judgment on these claims, the district court dismissed
the takings claim as unripe. Having disposed of the Owners’
federal claims, the district court remanded the Owners’ state-
law claims, as well as the Town’s four counterclaims, to state
court. See Sansotta v. Town of Nags Head (“Sansotta I”), 863 F.
Supp. 2d 495 (E.D.N.C. 2012). The Owners timely appealed, and
we have jurisdiction pursuant to 28 U.S.C. § 1291.
6 The district court also granted summary judgment to the Town on the Owners’ substantive due process claim, a decision the Owners have not appealed.
9 II.
We first address the Owners’ claims under the Due Process
Clause and Equal Protection Clause.
We review a grant of summary judgment de novo and apply the
same legal standards as the district court. Hardwick ex rel.
Hardwick v. Heyward, 711 F.3d 426, 433 (4th Cir. 2013). Under
Federal Rule of Civil Procedure 56, summary judgment should be
granted if “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law,”
based on the “materials in the record.” Fed. R. Civ. P. 56. In
conducting our review, we must view all evidence in the light
most favorable to the nonmoving party. Hardwick ex rel.
Hardwick, 711 F.3d at 433. At this stage, “we do not ‘weigh the
evidence,’ but rather we only determine ‘whether there is a
genuine issue for trial.’” Id. (quoting Gray v. Spillman, 925
F.2d 90, 95 (4th Cir. 1991)); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986).
The Owners contend that the Town violated their procedural
due process right by taking their money and property rights in
the cottages without providing any predeprivation process. We
disagree.
10 The Due Process Clause of the Fourteenth Amendment
provides, “No State shall . . . deprive any person of life,
liberty, or property, without due process of law.” U.S. Const.
amend. XIV, § 1. Procedural due process simply ensures a fair
process before the government may deprive a person of life,
liberty, or property, Wolf v. Fauquier Cnty. Bd. of Supervisors,
555 F.3d 311, 323 (4th Cir. 2009), but “does not require certain
results,” Tri Cnty. Paving, Inc. v. Ashe Cnty., 281 F.3d 430,
436 (4th Cir. 2002).
To succeed on a procedural due process claim, a plaintiff
must satisfy three elements. First, he must demonstrate that he
had a constitutionally cognizable life, liberty, or property
interest. Iota Xi Chapter Of Sigma Chi Fraternity v. Patterson,
566 F.3d 138, 145 (4th Cir. 2009). Second, he must show that
the deprivation of that interest was caused by “some form of
state action.” Id. (quoting Stone v. Univ. of Md. Med. Sys.
Corp., 855 F.2d 167, 172 (4th Cir. 1988)). That deprivation can
be by physical appropriation, Loretto v. Teleprompter Manhattan
CATV Corp., 458 U.S. 419, 435 (1982), or by a regulation that
deprives an owner of all economically valuable uses of the land,
Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992).
Third, he must prove “that the procedures employed were
constitutionally inadequate.” Patterson, 566 F.3d at 145.
11 Here, the Owners’ claim fails because they cannot show that
the Town deprived them of any constitutionally cognizable
property right. They assert two property interests: (1) the
money that would be used to pay the fines imposed by the Town;
and (2) the right to use and enjoy the cottages as part of their
fee simple ownership. Although each of these interests is a
constitutionally protected property right and thus meets the
first element of the claim, the Owners fail to satisfy the
second element because the Town never deprived them of these
interests.
First, although money is clearly a cognizable property
interest, see, e.g., Bd. of Regents of State Colleges v. Roth,
408 U.S. 564, 571–72 (1972) (including money in the list of
quintessential property rights protected by the Constitution),
the Town never deprived the Owners of any money because the
Owners never actually paid the fine. The Town’s imposition of
fines is not the equivalent of actually taking the Owners’
money. Cf. Sniadach v. Family Fin. Corp. of Bay View, 395 U.S.
337, 340–42 (1969) (holding that garnishment of wages is a
deprivation). 7 The Owners thus have suffered no deprivation, so
7 Because the Owners refuse to pay the fine, the Town is unable to collect the fine—and thereby deprive the Owners of their money—until the Town has prevailed in a civil action. See N.C. Gen. Stat. § 160A-175(c); see also Nags Head, N.C., Code § 1-6(c)(6) (authorizing the Town to impose fines of no more than (Continued) 12 their interest in their money cannot be the basis of a
successful procedural due process claim.
Second, the right to use and enjoy the cottages as part fee
simple ownership is also a cognizable property interest. See,
e.g., United States v. James Daniel Good Real Prop., 510 U.S.
43, 53–54 (1993) (observing that a person’s “right to maintain
control over his home, and to be free from governmental
interference, is a private interest of historic and continuing
importance”). The Owners appear to assert two theories of how
this property interest was taken. First, they argue that the
nuisance declaration clouded their title, thereby limiting their
ability to dispose of the property. 8 Second, they contend that
the Town’s actions deprived them of the ability to use and enjoy
the cottages, which they claim is an inherent part of fee simple
$500 per day for violations of Chapter 16, Article II of the Town Code); id. § 1-6(f) (authorizing the Town to seek a court order to enforce the Town’s ordinances). 8 Although we resolve this issue by focusing on the Town’s authority to enforce its nuisances ordinances, we note that the nuisance declaration did not cloud the Owners’ title. Compare Connecticut v. Doehr, 501 U.S. 1, 12 (1991) (observing that “attachments, liens, and similar encumbrances . . . are sufficient [deprivations] to merit due process protection”) with Kirby Forest Indus., Inc. v. United States, 467 U.S. 1, 15 (1984) (holding that a lis pendens does not result in a deprivation).
13 ownership. 9 Although the Town limited their ability to use and
enjoy the cottages, that limitation was not a deprivation of any
property right.
The Town’s actions here were all legitimate government
actions intended simply to enforce its nuisance ordinances.
Such regulatory actions do not constitute a deprivation of
property because they represent limitations on the use of
property that “inhere in the title itself, in the restrictions
that background principles of the State’s law of property and
nuisance already place upon land ownership.” Lucas, 505 U.S.
at 1029. Abating public nuisances and protecting the public
trust have long been part of governmental authority in North
Carolina. See, e.g., Ward v. Willis, 51 N.C. 183, 185 (1858)
(discussing the public trust doctrine); Dunn v. Stone, 4 N.C.
241, 242 (1815) (recognizing that a private citizen cannot sue
to abate a public nuisance “unless he has received an
extraordinary and particular damage,” indicating that generally
9 The Owners appear to conflate fee simple ownership of the cottages with the right to use the property in certain ways. Although the right to use property is often considered part of the bundle of property rights associated with fee simple, those rights and fee simple ownership of property are not synonymous.
14 the government has the authority to act to abate such
nuisances). 10
By acting to abate what it believed was a nuisance, the
Town simply kept the Owners from using their property in a way
that was prohibited by law. Because the law prohibited such use
of property, the Owners had no right to use their property in
that way. The Town’s actions to abate a nuisance were
reasonable—if mistaken—uses of its police power that did nothing
to deprive the Owners of any property right, even if the
cottages were rendered valueless. See Keystone Bituminous Coal
Ass’n v. DeBenedictis, 480 U.S. 470, 492 n.22 (1987) (“Courts
have consistently held that a State need not provide
compensation when it diminishes or destroys the value of
property by stopping illegal activity or abating a public
nuisance.”).
Of course, as the North Carolina Court of Appeals has since
made clear, the Town does not have the authority to enforce the
public trust doctrine; that power that lies exclusively with the
state. See Cherry, Inc., 723 S.E.2d at 158–62. When the Town
10 Even if § 16-31(6)(c) was not adopted in its current form when the cottages were built, the authority to abate nuisances exists without a specific ordinance. See State v. Everhardt, 166 S.E. 738, 741-42 (N.C. 1932) (“A public nuisance exists wherever acts or conditions are subversive of public order, decency, or morals, or constitute an obstruction of public rights. Such nuisances always arise out of unlawful acts.”).
15 issued the nuisance declaration, however, North Carolina courts
had not definitively addressed this issue. 11 We presume that the
Town officials acted in good faith when issuing the nuisance
declarations under the belief that they had this authority.
See, e.g., Linan-Faye Const. Co., Inc. v. Hous. Auth. of City of
Camden, 49 F.3d 915, 924 (3d Cir. 1995) (observing that a “court
is required to presume good faith on the part of public
officials”). For purposes of a due process claim, we consider
the Town’s actions based on the circumstances at the time the
government acted, not with the benefit of later-developed law,
because the purpose of the Due Process Clause is to ensure that
the government treats its citizens fairly, a determination which
is best made by focusing on what government officials knew and
believed at the time they acted. See Carey v. Piphus, 435 U.S.
247, 262 (1978). Thus, for purposes of the Owners’
constitutional claim, that the Town ultimately lacked the
11 When the Town acted, the North Carolina Court of Appeals had decided Neuse River Found., Inc. v. Smithfield Foods, Inc., 574 S.E.2d 48 (N.C. Ct. App. 2002), and Fabrikant v. Currituck Cnty., 621 S.E.2d 19 (N.C. Ct. App. 2005), two decisions upon which the court relied in Cherry, Inc. but that had not conclusively resolved whether a political subdivision could enforce the public trust.
16 authority to declare the cottages to be nuisances based on the
public trust doctrine is of no import. 12
Because the Town never deprived the Owners of any property
interest, their procedural due process right was not violated.
The district court therefore properly granted summary judgment
to the Town on this claim.
We next address the Owners’ equal protection argument. The
Owners argue that the Town violated the Equal Protection Clause
when it declared their cottages nuisances because 14 other
cottages that were in the public trust area under the Town’s
definition were not declared nuisances. We disagree.
The Equal Protection Clause of the Fourteenth Amendment
provides, “No State shall . . . deny to any person within its
jurisdiction the equal protection of the laws.” U.S. Const.
amend. XIV, § 1. This clause “is essentially a direction that
all persons similarly situated should be treated alike.” City
of Cleburne, Tex. v. Cleburne Living Ctr., 473 U.S. 432, 439
(1985). An equal protection claim involves two basic analytical
steps. First, a plaintiff must “demonstrate that he has been
treated differently from others with whom he is similarly
12 Whether this lack of authority could support any state- law claim is an issue that we do not consider.
17 situated and that the unequal treatment was the result of
intentional or purposeful [government decision].” Morrison v.
Garraghty, 239 F.3d 648, 654 (4th Cir. 2001). 13 Second, if a
plaintiff has met this burden, then “the court proceeds to
determine whether the disparity in treatment can be justified
under the requisite level of scrutiny.” Morrison, 239 F.3d at
654. The level of scrutiny depends on the type of
classification.
We assume without deciding that the Owners can satisfy the
requirement that they are similarly situated to the owners of
the other 14 cottages. Despite this assumption, the Owners’
equal protection claim fails.
Because the Town’s decision to classify some of these
cottages as nuisances but not others does not involve a suspect
or quasi-suspect classification, 14 we must uphold the Town’s
decision unless the Owners can prove that the decision fails
rational basis review—that is, that no rational relationship
13 Here, the Owners assert that they are a “class of one,” a position which we accept for purposes of our analysis. See Vill. of Willowbrook v. Olech, 528 U.S. 562, 564 (2000). Although other circuits have discussed the impact of Engquist v. Oregon Department of Agriculture, 553 U.S. 591 (2008), on a “class of one” equal protection claim, such discussion is not necessary to resolving the claim before us. 14 Such classifications trigger higher scrutiny. See Mitchell v. Comm’r of the Soc. Sec. Admin., 182 F.3d 272, 274 (4th Cir. 1999).
18 exists between the government action and a legitimate government
purpose. See F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307, 314–
15 (1993) (stating that the plaintiff bears the burden to show
that a government action lacks a rational basis); see, e.g.,
Vill. of Belle Terre v. Boraas, 416 U.S. 1, 7–8 (1974)
(reviewing a town ordinance regulating the number of unrelated
people who could live together under rational basis review).
Here, the Owners have failed to carry this burden because the
Town has a rational basis for treating them differently than the
owners of the other cottages.
Although all of the cottages—the Owners’ six cottages and
the other 14—may be in what the Town considers the public trust
area, the Owners’ cottages are substantially closer to the
Atlantic Ocean than the other cottages. See J.A. 385, 391–92
(providing aerial pictures of the beach showing the difference
in the location of the cottages). Ogburn, the Town manager,
stated in his affidavit that the Owners’ cottages “caused the
most severe and continuous” obstruction of the beach. J.A. 376.
This obstruction threatened public safety by hampering the
ability of emergency vehicles to travel along the beach. J.A.
377. The Owners’ contention that vehicles and individuals could
still get around their cottages is of no import. See J.A. 1324–
27 (Ogburn deposition admitting this fact). Whether vehicles
and individuals could possibly pass by the cottages is not the
19 appropriate question; rather, the appropriate question is
whether vehicles and individuals would have more difficulty in
passing by the cottages. Based on the difference in the
locations of the Owners’ cottages and the 14 other cottages, the
Town’s determination that the Owners’ cottages are more likely
to interfere with travel along the beach is reasonable. The
Town need not wait for these cottages to cause a disruption
before taking action.
Furthermore, the Owners’ contention that all cottages on
the beach burden the public’s access to use parts of the beach
under the Town’s theory of the public trust area is of no avail.
Even if the Town could declare all cottages on the beach
nuisances under its theory, the Town is not required to do so.
As long as a rational reason exists for the Town’s distinction
between cottages, the distinction does not violate any cottage
owner’s constitutional right. Thus, that the Town did not
declare some cottages further from the ocean to be nuisances
does not invalidate the Town’s decision to declare the Owners’
cottages nuisances. Notwithstanding the Owners’ contentions
about all parts of the beach being valuable, different parts of
the beach may present different issues with regard to public
safety. Hence, the difference in the locations of the cottages
on the beach is a legitimate basis for treating them
differently.
20 Based on the need to ensure ease of emergency travel along
the beach, the Town had a rational basis for its decision to
declare the Owners’ cottages, but not the others, nuisances
under the Town’s ordinance. 15 The Owners’ equal protection right
therefore was not violated by the Town’s nuisance declaration,
and the district court correctly granted summary judgment to the
Town on this claim.
III.
We now turn to the Owners’ argument that the district court
erred in dismissing their takings claim 16 as unripe based on the
state-litigation requirement of Williamson County Regional
Planning Commission v. Hamilton Bank of Johnson City, 473 U.S.
172 (1985). Whether a takings claim is ripe under Williamson
County is a question of law, which we review de novo. See
Miller v. Brown, 462 F.3d 312, 316 (4th Cir. 2006). We agree
15 The Equal Protection Clause protects an individual from being treated differently, not simply wrongly, by the government. Thus, whether the Town was correct that it could declare any cottages nuisances under § 16-31(6)(c) because they were in the public trust is irrelevant here. 16 The Owners allege three theories of a Taking by the Town: the Town’s (1) denying Sansotta the opportunity to protect the cottages during the storm on November 12, 2009; (2) redefining private property as public land; and (3) ordering removal of the cottages as nuisances while denying permits to repair the damage to the cottages.
21 with the Owners that the Town has waived the state-litigation
requirement by removing the case to federal court.
The Fifth Amendment’s Takings Clause, applicable to the
states through the Fourteenth Amendment, Chicago, B. & Q.R. Co.
v. Chicago, 166 U.S. 226, 239 (1897), provides, “[N]or shall
private property be taken for public use, without just
compensation,” U.S. Const. amend. V. This clause “implicitly
recognizes a governmental power” to take property for public use
“while placing limits upon that power” by requiring that the
government pay just compensation for any private property that
it takes. Stop the Beach Renourishment, Inc. v. Fla. Dep’t of
Envtl. Prot., 130 S. Ct. 2592, 2614 (2010) (Kennedy, J.,
concurring in part and concurring in the judgment).
For a takings claim against a state or its political
subdivisions to be ripe in federal court, the plaintiff must
first have sought compensation “through the procedures the State
has provided for doing so.” Williamson Cnty. Reg’l Planning
Comm’n, 473 U.S. at 194. Because the Takings Clause simply
requires the payment of just compensation, not necessarily
payment before or simultaneous with the taking, a plaintiff must
first seek compensation from the state via the procedures that
the state has established before suing the state in federal
22 court. Id. at 195; see also Holliday Amusement Co. of
Charleston, Inc. v. South Carolina, 493 F.3d 404, 407 (4th Cir.
2007). Based 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. See Holliday Amusement Co. of Charleston, Inc.,
493 F.3d at 407.
This prohibition does not exist in state court. In
contrast with a federal court, 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.” San Remo Hotel, L.P. v. City & Cnty. of San
Francisco, Cal., 545 U.S. 323, 346 (2005). Thus, under San Remo
Hotel, a plaintiff may bring a takings claim in state court
without having already been denied compensation by the state, if
he also brings his state-law claim for just compensation.
Here, the Owners did exactly what San Remo Hotel permits:
they filed both their takings claims and their inverse
condemnation claim, see N.C. Gen. Stat. § 40A-51, in state
23 court. 17 The Town then removed the case to federal court, as it
was permitted to do under 28 U.S.C. § 1441 because the complaint
raised a question of federal law. See 28 U.S.C. § 1331;
Louisville & N.R. Co. v. Mottley, 211 U.S. 149, 152–53 (1908).
The Town then invoked the Williamson County state-litigation
requirement and asserted that the Owners’ taking claim was
unripe.
Although “[r]ipeness reflects constitutional considerations
that implicate ‘Article III limitations on judicial power,’ as
well as ‘prudential reasons for refusing to exercise
jurisdiction,’” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,
130 S. Ct. 1758, 1767 n.2 (2010) (quoting Reno v. Catholic
Social Servs., Inc., 509 U.S. 43, 57, n.18 (1993)), the
Williamson County state-litigation requirement involves only
prudential considerations, Suitum v. Tahoe Reg’l Planning
Agency, 520 U.S. 725, 734 (1997); see also Stop the Beach
Renourishment, Inc., 130 S. Ct. at 2610 (holding that Williamson
County is not jurisdictional). Because Williamson County is a
prudential rather than a jurisdictional rule, we may determine
that in some instances, the rule should not apply and we still
have the power to decide the case. See Washlefske v. Winston,
17 North Carolina courts will hear these claims simultaneously. See, e.g., N.C. Dep’t of Transp. v. Cromartie, 716 S.E.2d 361 (N.C. Ct. App. 2011).
24 234 F.3d 179, 182 (4th Cir. 2000) (observing that prudential
ripeness focuses on whether “we should exercise federal
jurisdiction”). This 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.
The limitation imposed by the state-litigation
requirement is grounded on the idea that “state courts
undoubtedly have more experience than federal courts do in
resolving the complex factual, technical, and legal questions
related to zoning and land-use regulations.” San Remo Hotel,
L.P., 545 U.S. at 347; see also Holliday Amusement Co. of
Charleston, Inc., 493 F.3d at 409. That state courts have this
advantage over federal courts in experience with these issues,
however, does not mean that federal courts are incapable of
handling them. Cf. San Remo Hotel, L.P., 545 U.S. at 350–51
(Rehnquist, C.J., concurring in the judgment) (observing that
federal courts can hear First Amendment challenges to municipal
land-use regulations despite state courts’ greater familiarity
with such ordinances and collecting cases). Indeed, we are
confident that federal judges, whenever they apply state law,
can apply it correctly. A defendant implicitly agrees with this
25 conclusion when he removes a case involving such a state or
municipal law to federal court. Thus, the primary reason for
the Williamson County state-litigation requirement no longer
applies when the defendant removes a case.
Moreover, refusing to apply the state-litigation
requirement in this instance ensures that a state or its
political subdivision cannot manipulate litigation to deny a
plaintiff a forum for his claim. The Supreme Court’s decision
in Lapides v. Board of Regents of the University System of
Georgia, 535 U.S. 613 (2002), is an apt analogy here. In that
case, a university professor brought an action pursuant to 42
U.S.C. § 1983, along with state-law claims, in state court after
university officials put allegations of sexual harassment in his
personnel file. Id. at 616. The defendants then removed the
case to federal court and asserted Eleventh Amendment immunity.
Id. The Court held that the state had waived its Eleventh
Amendment immunity on these facts. Id. The Court reasoned:
It would seem anomalous or inconsistent for a State both (1) to invoke federal jurisdiction, thereby contending that the “Judicial power of the United States” extends to the case at hand, and (2) to claim Eleventh Amendment immunity, thereby denying that the “Judicial power of the United States” extends to the case at hand. And a Constitution that permitted States to follow their litigation interests by freely asserting both claims in the same case could generate seriously unfair results.
26 Id. at 619. Based on this ability for a state potentially to
manipulate litigation, the Court held that “removal is a form of
voluntary invocation of a federal court’s jurisdiction
sufficient to waive the State’s otherwise valid objection to
litigation of a matter . . . in a federal forum.” Id. at 624.
The Court was so intent on preventing any manipulation that it
created a bright-line rule: any voluntary removal waives
immunity. Id. at 621 (“A benign motive, however, cannot make
the critical difference for which Georgia hopes. Motives are
difficult to evaluate, while jurisdictional rules should be
clear. To adopt the State’s Eleventh Amendment position would
permit States to achieve unfair tactical advantages, if not in
this case, in others.” (internal citation omitted)).
Here, if we substitute “the Williamson County state-
litigation requirement” for “Eleventh Amendment immunity,” the
logic is precisely the same. Like Eleventh Amendment immunity,
a state or its political subdivision 18 is entitled to assert the
state-litigation requirement when a plaintiff files suit in
federal court. But permitting a state or its political
18 The Eleventh Amendment applies only to the states, Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977), but the Williamson County state-litigation requirement applies both to states and their political subdivisions, Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985).
27 subdivision to assert this requirement after the state or its
political subdivision has removed the case to federal court
would allow the state or its political subdivision to do in the
context of the Takings Clause exactly what the Supreme Court has
declared to be improper in the context of the Eleventh
Amendment: invoke federal jurisdiction and then object to
federal jurisdiction. 19
Applying the reasoning of Lapides to the Takings Clause and
Williamson County is both logically and legally sound. First,
this reasoning does nothing to undermine the core rationale of
Williamson County, as a plaintiff cannot bring a takings claim
in federal court without having been denied just compensation by
the state; such a claim can come into federal court before the
state has denied compensation only when the state or its
political subdivision chooses to remove the case to federal
court. Second, it protects an innocent plaintiff who sought to
comply with Williamson County and San Remo Hotel but whose
efforts were thwarted by the state or political subdivision’s
decision to remove the case. Third, it prevents a state or its
19 The prudential nature of the Williamson County state- litigation requirement as compared to the constitutional basis of the Eleventh Amendment cannot logically or legally distinguish this case from Lapides. In both instances, the state could manipulate the litigation to deny a forum to the plaintiff.
28 political subdivision from manipulating litigation by removing
to federal court claims properly filed in state court in
accordance with San Remo Hotel and then claiming that the
plaintiff cannot proceed on those claims, thereby denying a
plaintiff any forum for having his claim heard. Fourth, and
relatedly, it furthers our “strong preference for deciding cases
on the merits” by preventing any procedural gamesmanship.
Heyman v. M.L. Mktg. Co., 116 F.3d 91, 94 (4th Cir. 1997).
None of the Town’s suggestions of what the Owners could
have done convinces us that we should apply the state-litigation
requirement here. First, the Town contends that the Owners
should have sought remand of the takings claim. Yet the Owners
could not have sought to have the district court remand this
claim. Under 28 U.S.C. § 1441, a defendant may remove a “civil
action,” 28 U.S.C. § 1441(a) (emphasis added); see also id. §
1446 (providing the procedure for removal), and such a removal
transfers the entire case to federal court, not simply
individual claims in that action. After the Town properly
removed this case and before the district court granted summary
judgment to the Town on the federal claims, the Owners had no
basis to seek to have that court remand any claims to the state
court. See 28 U.S.C. § 1447 (providing the procedure for after
a case is removed); id. § 1367(c) (providing the bases on which
29 a district court may decline to exercise supplemental
jurisdiction). 20 When 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, see, e.g., Colorado River Water Conservation
District v. United States, 424 U.S. 800 (1976); Burford v. Sun
Oil Co., 319 U.S. 315 (1943), to refrain from exercising that
jurisdiction.
Second, the Town argues that the Owners should have
reserved their takings claim with an England reservation. An
England reservation permits a plaintiff who is forced to
litigate state-law issues in state court to reserve explicitly
his federal constitutional claims for a decision by a federal
court. See generally England v. La. State Bd. of Med.
Examiners, 375 U.S. 411 (1964); see also San Remo Hotel, L.P.,
545 U.S. at 339–40. We do not believe that the Owners should
20 The presence of other federal claims here easily distinguishes this case from cases in which a plaintiff has brought only a takings claim and has then sought remand based on Williamson County. See, e.g., Bauknight v. Monroe Cnty., Fla., 446 F.3d 1327 (11th Cir. 2006). In cases such as Bauknight, a plaintiff could fairly argue that the district court had no basis for jurisdiction because the case was not ripe. Here, by contrast, the district court clearly had subject-matter jurisdiction based on the substantive due process, procedural due process, and equal protection claims. Thus, Sansotta had no basis to ask the district court to remand the case after it had been removed.
30 have been required to reserve their federal takings claim.
First, the record contains no indication that the Owners were
dissatisfied with having their takings claim heard in state
court; thus, they had no reason to reserve that claim for
adjudication by a federal court, and they should not have had to
presume that the Town, a political subdivision of North
Carolina, would remove the case from its own courts to federal
court. Second, assuming a plaintiff could make an England
reservation, see Front Royal & Warren Cnty. Indus. Park Corp. v.
Town of Front Royal, Va., 135 F.3d 275, 283 (4th Cir. 1998)
(citing Fields v. Sarasota Manatee Airport Auth., 953 F.2d 1299,
1303–07 (11th Cir. 1992)), requiring such a reservation here
fails to fulfill the purposes of reserving a claim. When the
Town removed the case, it brought the Owners’ takings claim into
federal court, thereby accomplishing the result of making an
England reservation. Nevertheless, the Town then argued that
the claim could not be decided at that time.
The Town’s position undercuts its own argument. Had the
Owners followed the Town’s suggestion and reserved their takings
claim, the result would have been the type of “piecemeal
litigation” that the Supreme Court has rejected. San Remo
Hotel, L.P., 545 U.S. at 346. On the other hand, because the
Owners did not reserve their claim, it allowed the Town to
manipulate the litigation and deny them a forum. Once the claim
31 is before a federal court, we see no reason to prevent the court
from exercising its jurisdiction over the claim. As we have
noted, the rationale for the state-litigation requirement
disappears when a defendant removes the case to federal court.
Furthermore, we are wary of the potential for manipulation and
the associated unnecessary costs of litigating in multiple
forums. Cf. Fed. R. Civ. P. 1 (“[The Federal Rules of Civil
Procedure] should be construed and administered to secure the
just, speedy, and inexpensive determination of every action and
proceeding.” (emphasis added)).
Third, the Town’s suggestion that the Owners did not
properly plead their takings and inverse condemnation claims in
the alternative is unavailing. The Federal Rules of Civil
Procedure remain committed to a notice-pleading standard that
was adopted when the Rules were first promulgated in 1938.
Swierkiewicz v. Sorema N. A., 534 U.S. 506, 512 (2002); see also
Fed. R. Civ. P. 8(a)(2) (providing that a complaint must contain
“a short and plain statement of the claim showing that the
pleader is entitled to relief”). We see no reason why the
Owners needed to use any special phrasing in their complaint, as
this complaint gave the Town “fair notice” of the Owners’
claims. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
32 Fourth, the Town maintains that the Owners could have asked
the district court to abstain despite the case being unripe.
But this position is untenable. “[R]ipeness is a question of
subject matter jurisdiction.” Reahard v. Lee Cnty., 978 F.2d
1212, 1213 (11th Cir. 1992). Because a district court can
abstain only when it has subject matter jurisdiction, a case
must be ripe before a district court may abstain. Cf. Colorado
River Water Conservation District, 424 U.S. at 817 (discussing
whether abstention was appropriate only after noting that
subject matter jurisdiction existed). Accordingly, the Town
cannot contend that the Owners’ taking claim is unripe and that
the Owners should have asked the district court to abstain, as
such legal positions are logically incompatible.
Although the remand of claims to state court is generally
not an appealable final order under 28 U.S.C. §§ 1447(c) and
(d), see Gravitt v. Sw. Bell Tel. Co., 430 U.S. 723, 723–24
(1977) (per curiam) (citing Thermtron Products, Inc. v.
Hermansdorfer, 423 U.S. 336 (1976)), we may review such a remand
when a district court declines to exercise supplemental
jurisdiction under 28 U.S.C. § 1367(c) because such a decision
is not a remand for lack of subject matter jurisdiction, see
Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 639–40
(2009) (“Upon dismissal of the federal claim, the District Court
33 retained its statutory supplemental jurisdiction over the state-
law claims. Its decision declining to exercise that statutory
authority was not based on a jurisdictional defect but on its
discretionary choice not to hear the claims despite its subject-
matter jurisdiction over them.”).
Given our holding that the Town waived the state-litigation
requirement by removing the case to federal court, we now
address the district court’s decision to remand the state-law
claims to state court. First, the district court focused on the
fact that no federal law claims remained, see Sansotta I, 863 F.
Supp. 2d at 514–15, but as we have made clear here, the takings
claim was ripe and does remain. Second, the district court
emphasized the important issues of state law raised by the
state-law claims. See id. at 515. However, based on the
decision of the North Carolina Court of Appeals in Cherry, Inc.,
further clarification from a state court may not be needed for
the district court to decide these claims. 21 See Cherry, Inc.,
21 In Town of Nags Head v. Toloczko, 863 F. Supp. 2d 516, 528 n.6 (E.D.N.C. 2012), the district court observed that the North Carolina Supreme Court had not yet decided whether to review the decision from the state court of appeals in Cherry, Inc. The state supreme court has now denied discretionary review of that decision. See Town of Nags Head v. Cherry, Inc., 733 S.E.2d 85 (N.C. 2012). We see no reason not to defer to the decision of the state court of appeals here. See United States v. King, 673 F.3d 274, 279 (4th Cir. 2012) (“If the highest court of the state has not decided an issue of state law, we generally defer to the state’s intermediate appellate courts on (Continued) 34 723 S.E.2d at 158–62. Third, the district court noted state
courts’ greater expertise with issues of state land-use law.
See Sansotta I, 863 F. Supp. 2d at 515. Nevertheless, as we
have expressed already, we have confidence in the district
court’s ability to apply this state law, and that by removing
the case, the Town implicitly shares our confidence in the
district court. In light of our holding today, the district
court must reconsider whether it should exercise supplemental
jurisdiction over the state-law claims. 22
* * *
Based on our conclusion that a state and its political
subdivisions waive the state-litigation requirement by removing
a case to federal court, the district court erred in dismissing
the Owners’ takings claim as unripe. Thus, we remand this claim
to the district court for further proceedings. Whether the
district court should decide the claim on the merits, abstain
from deciding the claim, or take another approach is a question
the issue.”). Thus, the impact of the decision of the North Carolina Court of Appeals in Cherry, Inc. should be considered in determining whether supplemental jurisdiction should be exercised. 22 Although the Owners have not explicitly appealed the district court’s decision to remand these claims, this issue is closely related to the ripeness of the takings claim, and we have elected to decide it now.
35 that we leave for the district court to address on remand. 23 For
purposes of this appeal, we simply hold that the district court
erred when it dismissed the Owners’ takings claim for lack of
ripeness after the Town removed the case to federal court.
IV.
We therefore affirm the district court’s grant of summary
judgment to the Town on the Owners’ procedural due process and
equal protection claims, reverse the district court’s dismissal
of the Owners’ takings claim for lack of ripeness, and remand
for further proceedings.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
23 In holding that the district court erred in dismissing the Owners’ takings claim as unripe, we make no comment on the merits of their claim.