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noting courts should inquire into whether plaintiffs are bringing substantive due process claims in order to circumvent the ripeness requirement in a takings claim
Summary of this case from Carroll v. Township of Mount LaurelOpinion
Case No. CIV-01-1500-F
June 13, 2002
MEMORANDUM OPINION AND ORDER
Before the court is the Defendants' Motion for Partial Summary Judgment, filed November 1, 2001 (docket entry no. 12), together with the Defendants' Motion for Partial Dismissal, also filed on November 1, 2001 (docket entry no. 10). Both motions have been fully briefed. The court has also had the benefit of oral argument on these motions.
The motion for partial summary judgment is addressed only to Count One of the complaint. The motion for partial dismissal, filed pursuant to Rule 12(b)(1) and (6), Fed.R.Civ.P., is addressed to Counts Two and Three of the complaint. For the reasons set forth in this order. the motions are denied.
I. FACTS
The motion for partial dismissal is made pursuant to Rule 12(b)(1) and (6). To the extent that the motion is made pursuant to Rule 12(b)(6) (failure to state a claim upon which relief may be granted), the court must take the well-pleaded allegations in the complaint as true, viewing them in the light most favorable to the plaintiff. Crider v. Bd. of County Comm'rs, 246 F.3d 1285, 1288 (10th Cir. 2001). Plaintiff's claims may not be dismissed under Rule 12(b)(6) unless it appears beyond all doubt that plaintiff can prove no set of facts which would entitle it to relief. Id. To the extent that the motion to dismiss is made pursuant to 12(b)(1) (lack of subject matter jurisdiction), the court may look beyond the complaint. However, the defendants' arguments in support of the motion to dismiss are entirely addressed to the factual averments in the complaint. Likewise, although, in responding to the motion to dismiss, plaintiff makes some passing reference to record materials other than the complaint, the arguments advanced by plaintiff in support of the sufficiency of the complaint are confined to the four-corners of the complaint. Accordingly, for Rule 12(b) purposes, the court will take the well-pleaded facts in the complaint as true and will refer to no factual materials outside of the complaint. The court will also disregard conclusions and opinions asserted in the complaint. Bryan v. Stillwater Bd. of Realtors, 578 F.2d 1319 (10th Cir. 1977).
For purposes of consideration of the motion for partial summary judgment as to Count One, the court will, of course, consider the affidavits which have been submitted in support of and in opposition to the motion for partial summary judgment.
The factual averments in the complaint which lie at the heart of the court's consideration of the Rule 12(b) motion and which also provide the general framework for the court's consideration of the motion for partial summary judgment are as follows:
Plaintiff owns a shopping center in Warr Acres, Oklahoma. The defendants are the City of Warr Acres, a municipal corporation, and the Warr Acres Redevelopment Trust Authority, which is a trust formed pursuant to 11 O.S. (1998 supp.) §§ 40-101 et seq.
In October. 2000, the Warr Acres City Council adopted a resolution (the Resolution) expressing the intent of the City to adopt a declaration of trust creating a redevelopment trust. The relevant portions of the Resolution state as follows:
WHEREAS, the City of Warr Acres, Oklahoma has determined that the area generally between MacArthur and N. Hammond Avenue between Northwest 36th Street and Northwest 39th Expressway, a commercial area contains blighted conditions, and
WHEREAS, the City of Warr Acres, Oklahoma has determined that the following conditions exist in a greater portion of the designated area. A substantial number of deteriorating structures, unsafe conditions, deterioration of site improvements absentee ownership, obsolete platting and land uses, conditions which endanger property by fire and other causes and conditions which create economic obsolescence and inappropriately developed structures, and
WHEREAS, the City of Warr Acres, Oklahoma intends to establish a neighborhood redevelopment trust for the purpose of correcting the blighted conditions contained in the designated area.
WHEREAS, the City of Warr Acres, Oklahoma has determined that redevelopment of the designated blighted area is necessary to promote the general and economic welfare of the City of Warr Acres, Oklahoma.
THEREFORE, be it resolved by the mayor and the Council of the City of Warr Acres, Oklahoma that this Resolution of Intent be adopted this date for the purpose of moving forward the establishment of a redevelopment trust for the purposes of redeveloping that portion of commercially zoned property located generally between MacArthur and N. Hammond Avenue and between Northwest 36th Street and Northwest 39th Expressway in the City of Warr Acres, Oklahoma.
Complaint, Ex. A (emphasis added).
Given the legal theory advanced by the plaintiff in this action, the factual findings set forth in the second recital of the Resolution are of special importance in this case.
Before the Resolution was adopted, a proposed redeveloper, Warr Acres Crossing Development Corporation, asserted that the area designated in the Resolution (the "designated area") includes many blighted or vacant properties and offered a plan to create a major retail supercenter. The redeveloper also proposed benefits to the City of Warr Acres by way of increased sales tax revenue.
After the Resolution was adopted, the Warr Acres City Council created the Warr Acres Redevelopment Trust Authority, a defendant in this action. The Authority was created, as stated above, pursuant to 11 O.S. (1998 supp.) §§ 40-101 et seq. Before and after the enactment of the Resolution and the creation of the Authority, the City of Warr Acres made known its plans to redevelop the designated area as a mall to be known as Warr Acres Crossing.
After the Resolution was adopted and the Authority came into existence, the Authority prepared a program plan, pursuant to the Neighborhood Redevelopment Act The plan includes a feasibility study which reveals that the impetus for the redevelopment project is not to cure blighted conditions within the designated area, but instead, to replace a recently closed Wal-Mart Store and to replenish the City's sales tax revenue.
As noted above, plaintiffs shopping center is located entirely within the designated area. Other viable business concerns are also located within the designated area. Those businesses include Buy For Less, Locke Supply, Diaper Outlet, Fantastic Sam's, Shelter Insurance, Red Wing Shoes, Grandy's Restaurant, Taco Mayo, Northwest Nissan, Northwest Animal Hospital and others.
The designated area includes 18 different property owners. (Other materials in the record suggest that there are 17 owners.) The dominant land use in the designated area is commercial. The physical and economic uses in the designated area are generally the same as the uses in the areas that adjoin the designated area on the west, north and east.
Under the Neighborhood Redevelopment Act, specifically 11 O.S. (1998 supp.) § 40-113, it was necessary, in order for the redevelopment effort to proceed, for the City Council to find the existence of at least six out often statutory factors comprising "blighted conditions." Those statutory factors are the following:
a. a substantial number of deteriorated or deteriorating structures,
b. predominance of defective or inadequate street layout,
c. unsanitary or unsafe conditions,
d. deterioration of site improvements,
e. absentee ownership,
f. tax or special assessment delinquency exceeding the fair value of the land,
g. defective or unusual conditions of title,
h. improper subdivision or obsolete platting or land uses,
i. the existence of conditions which endanger life or property by fire and other causes, or
j. conditions which create economic obsolescence, or areas containing obsolete, nonfunctioning or inappropriately developed structures.
40 O.S. Supp. § 40-113
At the heart of plaintiff's legal and factual case is plaintiffs averment that "untruth and in fact, not even one of the ten statutory factors is present in the designated area, and hence, the area does not suffer from `blighted conditions.'" Complaint, ¶ 15. Thus, even ignoring hyperbole and bald conclusions, plaintiffs factual allegations are cast in the starkest terms plaintiff has alleged facts which, if proven, would establish that the City Council's factual findings in support of the declaration of "blighted conditions" are a complete fabrication.
As a direct result of the creation of the Authority and the declaration of blight, "plaintiff, and others similarly situated, have been, and are, unable to sell or lease their properties, and have lost money accordingly." Complaint, ¶ 16.
The factual averments which are set forth above are the averments which are taken as true for purposes of the Rule 12(b) motion. The factual setting becomes a bit more complicated once the affidavits are taken into account for purposes of the motion for partial summary judgment.
Attached to defendants' motion for partial summary judgment is the affidavit of Tommy E. Pike. Mr. Pike was the mayor of Warr Acres when the Resolution was adopted.
In his affidavit, Mr. Pike states that, in determining the existence of blighted conditions in the designated area, the City Council applied the standards (quoted above) set forth in the Neighborhood Redevelopment Act. The City specifically determined that the following blighted conditions existed within all or a portion of the designed area:
(a) a substantial number of deteriorated or deteriorating structures;
(b) unsafe conditions;
(c) deterioration of site improvements;
(d) absentee ownership;
(e) obsolete platting and land uses;
(f) conditions which endanger property by fire and other causes; and
(g) conditions which create economic obsolescence and inappropriately developed structures.
Mr. Pike also states that the Council determined that conservation, development or redevelopment of the area was necessary to promote the general and economic welfare of the City, and that the Council's determination was based upon facts presented at the council meeting, as well as photographs of the area. Prior to the council meeting, some council members visited the designated area. Finally, Mr. Pike states that although a vote of the citizens was not required, the redevelopment proposal was submitted to a vote of the citizens of Warr Acres after the Resolution was adopted. A majority of the citizens approved of the plan.
Three affidavits are attached to plaintiff's response to the motion for partial summary judgment. The first affidavit is the affidavit of James W. Hoyt, a real estate appraiser and consultant. Mr. Hoyt, in his affidavit, provides a detailed historical and physical description of the designated area and its environs. Lie then provides a detailed factual description of the uses and ownership pattern which characterized the designated area. On the basis of his on-site inspection of the properties as well as information garnered from the county assessor's office, Mr. Hoyt summarized his findings as follows:
(A) While a limited amount of improvements within the study area were in poor condition or in need of maintenance and repair, the majority of the improvements were in fair to good condition. Many of the larger properties exhibited good pride of ownership and maintenance of their improvements. The property currently under development in the study exhibits an economic demand for the underdeveloped lands in this area.
(B) The long or extended blocks and depths of over 300 feet of the three platted blocks do not appear to cause any loss in property utility. The grid pattern of street platting is common for most any type of land development. The three block area has good traffic circulation.
(C) The detailed inspection of all 18 properties in this area exhibited no indication of unsanitary or unsafe conditions that had any adverse affect on the abutting properties or the overall area. The land uses found in this area are generally typical for the Warr Acres and Bethany areas.
(D) Some of the properties in this study area had improvements that were 50 years or older. All of the improvements were being utilized. The site improvements of the large majority of the properties were generally well maintained and served the properties' designed need.
(E) The property records indicated that only three of the properties are owned by parties that live outside the Oklahoma City Metro area. The high percentage of local ownership would account for the pride of ownership exhibited in most of the properties in this study area.
(F) A review of the records maintained in the Oklahoma County Treasurer's office illustrated that one property had an ad valorem tax delinquency. The property's probable value appeared to far exceed the delinquent taxes. The other 17 properties had no tax delinquency reported by the County Treasurer.
(G) There was no indication that any of the properties within the study area had any defective conditions of title or ownership.
(H) The grid pattern of ownership within this study area is very typical for mature and fully developed areas. The grid pattern of development indicated no adverse affect towards the property uses in the study area.
(I) No properties were found in the study area that would indicate any form of conditions that would endanger life or present a fire hazard.
(J) The study area has a diversity of land uses. With the exception of the three vacant land tracts, the improved properties appeared to be occupied and exhibited some utility for the use in which the property was functioning. Some of the improvements in this study area were older structures that exhibited some physical obsolescence when compared with newer improvements. These conditions only existed in four of the 18 properties. In each of the four properties, some rehabilitation would cure the obsolescence found in the improvement. There were no conditions found in any of the properties that would indicate economic obsolescence through inappropriately developed structures.
Hoyt Affidavit, ¶ 15.
Mr. Hoyt concludes, on the basis of the facts set forth in his affidavit, that "insufficient evidence exists to show that the study area suffers from `blighted conditions.'" Id at ¶ 16. Mr. Hoyt further states that "the conditions and uses in the study area do not substantially impair or arrest the sound development and growth at Warr Acres, or constitute an economic or social liability, nor are they a menace to the public health, safety, morals or welfare." Id
The second affidavit submitted by plaintiff is an affidavit which establishes that the properties within the designated area are owned by 17 separate owners. Defendants agree with this statement. See defendants' response to request for admission no. 11.
The final affidavit attached to plaintiffs response to the motion for partial summary judgment is the affidavit of Mary R. Grace, a commercial real estate broker. Ms. Grace states that she has inspected the area in question. She then concludes as follows:
4. The commercial properties in the subject area comprise a neighborhood shopping district which is typical of, and not significantly different from, most such developments in Warr Acres and Bethany. The area generally appears to be physically and economically viable. Under ordinary circumstances, tenant space should be leasable to small businesses similar to those presently located there.
5. In my inspection of the subject area, from the perspective of a commercial real estate broker, I observed nothing which would lead me to conclude that conditions or uses there would (a) substantially impair or arrest the sound development and growth of Warr Acres (b) constitute an economic or social liability or (c) be a menace to the public health, safety, morals or welfare in its present condition and use.
Grace Affidavit, ¶ 4 and 5.
This action was filed by Salt Creek on September 21, 2001, just short of a year after the Resolution was adopted. Nowhere in the record is there any suggestion that the Authority has commenced condemnation proceedings.
It is as important to understand what this action does not involve as it is to understand what this action does involve. This case presents no facial challenge to the constitutionality of the Neighborhood Redevelopment Act or the Resolution. Thus, plaintiff makes no claim that the Neighborhood Redevelopment Act is unconstitutional by reason of providing for the inclusion of non-blighted properties in an area which has been subjected to an overall finding of blight pursuant to 11 O.S. (1998 supp.) § 40-104. of equal importance, this case does not involve a zoning dispute, or the denial of a permit or the right to develop, or a claim of denial of equal protection or procedural due process, or a claim that an uncompensated taking has occurred. Land use regulation, at least in the usual sense, is simply not involved here.
II. THE STATUTORY SETTING
The Neighborhood Redevelopment Act was enacted in 1998. Laws 1998, Ch. 247, § 2. As enacted in 1998, the Act was a substantial revision to the 1981 Central Business District Redevelopment Act. Laws 1981, Ch. 315. Oklahoma's original urban renewal legislation was enacted in 1959. Laws 1959, Ch. 38.
Under the 1998 legislation, a city may adopt a redevelopment plan. 11 O.S. (1998 supp.) § 40-104. The redevelopment plan must describe the proposed redevelopment project. The enabling ordinance may include an acceptance of a beneficial interest in any redevelopment trust created pursuant to the terms of the redevelopment plan. Id. The redevelopment trust may, in turn, exercise the power of eminent domain to acquire real property and may finance the redevelopment program by issuing bonds. 11 O.S. (1998 supp.) §§ 40-108.1 and 40-115.
The Act specifically provides that no city shall exercise any of the powers conferred by the Act unless the governing body of the city:
shall have adopted a resolution finding that all or a portion of the commercial, industrial or residential neighborhood seeking to be redeveloped contains blighted conditions and the conservation, development or redevelopment of such area is necessary to promote the general and economic welfare of such city or town.
11 O.S. (1998 supp.) § 40-103(a). In turn, the Act defines "blighted conditions" as conditions which, because of the presence of a majority of the statutory factors, substantially impair or arrest the sound development and growth of the municipality or constitute an economic or social liability or are a menace to the public health, safety, morals or welfare. 11 O.S. (1998 supp.) § 40-113. The statutory blight factors are those which are quoted above in Section I. The requirement of a finding of the presence of a majority of the specifically listed statutory factors contrasts conspicuously with the corresponding provision in the original urban renewal legislation. The original legislation defined "blighted area" in terms of a number of blight factors (several of which are substantially identical to the factors listed in the 1998 legislation) "any one or combination of which" contribute to urban decay. Laws 1959, Ch. 38, § 3 (emphasis added).
III. MOTION FOR PARTIAL SUMMARY JUDGMENT — COUNT ONE
Defendants' motion for partial summary judgment is addressed only to Count One of the complaint. Count One is labeled: "Declaratory Judgment, Federal and State." Complaint, p. 6. In Count One, the plaintiff seeks a determination (i) that a finding of "blighted conditions" is a jurisdictional prerequisite to any further action under the Act, (ii) that none of the ten factors specified in 11 O.S. (1998 supp.) § 40-113 in fact existed at the time the Resolution was enacted and, accordingly, (iii) that "blighted conditions" did not exist in the designated area. Plaintiff's Count One pleading concludes with a request that the court determine that the Resolution is "arbitrary, capricious, unreasonable, constitutional, violative of substantive due process and therefore invalid and unenforceable." Complaint, ¶ 20.
Count One itself does not include a statement of jurisdiction. However, elsewhere in the complaint, plaintiff states that, because this action is brought to redress a deprivation of rights under the United States Constitution pursuant to 42 U.S.C. § 1983, the court has subject matter jurisdiction under 28 U.S.C. § 1331 and 1343. Plaintiff also asserts diversity jurisdiction under 28 U.S.C. § 1332 and supplemental jurisdiction under 28 U.S.C. § 1367 (a).
Defendants' motion for partial summary judgment as to Count One does not challenge the subject matter jurisdiction of the court to adjudicate the claim set forth in Count One of the complaint. However, even though this order is not dispositive as to any of the claims asserted in this action, the court has, sua sponte, made a preliminary inquiry into the existence of diversity jurisdiction. The complaint does not adequately state the facts relevant to the court's determination of the citizenship of the plaintiff limited partnership. In determining the citizenship of a limited partnership, the court looks to the citizenship of the constituent general and limited partners. Carden v. Arkoma Associates, 494 U.S. 185 (1990). At the direction of the court, plaintiff has filed a certificate of citizenship. Citizenship is determined, for diversity purposes, as of the date of filing of the action. See, generally, 15Moore's Federal Practice, § 102.16 (Matthew Bender 3d ed.). The certificate establishes that plaintiff was a citizen of Mississippi when this action was filed. Accordingly, the court concludes, at least preliminarily, that diversity of citizenship exists between the plaintiff and the defendants. The record amply supports the existence of the requisite amount in controversy.
Defendants' motion for partial summary judgment does not assert that plaintiff's claim in Count One is unripe or that the court should, on the basis of any of the abstention doctrines, abstain from adjudicating that claim. Although defendants' summary judgment brief cites two federal cases, the court infers from defendants' brief that defendants are content to argue for summary judgment on Count One as if this court were a state court reviewing action taken by a city council. Cf., SK Finance. S.A. v. La Plata County, 126 F.3d 1272, 1276 (10th Cir. 1997). For its part, plaintiff also appears to be content to have the court proceed on the basis of Oklahoma law as to Count One. Since the motion for partial summary judgment presents no issues as to whether plaintiff is entitled to judgment in its favor on Count One, any necessary consideration of abstention as to Count One may await another day.
Defendants' motion for partial summary judgment as to Count One raises difficult issues which may ultimately be resolved in favor of the defendants. For instance, plaintiff cites no Oklahoma cases which directly support judicial reversal of an unfounded finding of blight. See, plaintiffs response to defendant's motion for partial summary judgment, at 15-18. Likewise, defendants quite properly call the court's attention to the well-developed body of Oklahoma law which establishes a deferential standard of judicial review of municipal actions. See, e.g.,McConnell v. Town Creek of Tipton, 704 P.2d 479 (Okla. 1985). These contentions may ultimately carry the day as to Count One. However, the court has concluded that Count One may not be resolved by way of summary judgment. Although some of the matters advanced by plaintiff as "facts" in support of Count One are actually legislative conclusions as to which judicial review is quite limited, it is sufficient, for present purposes, simply to observe that plaintiffs response to defendants' motion for partial summary judgment includes a direct challenge to a number of the essential factual bases upon which defendants seek summary judgment on Count One. Accordingly, under the familiar standards applicable to motions for summary judgment, the motion for partial summary judgment as to Count One must be denied. Those issues which are purely factual, as well as those issues which involve mixed questions of fact and law, may best be resolved (and, in some respects, may only be resolved) on the basis of a trial record.
IV. MOTION TO DISMISS — COUNT TWO
In Count Two, plaintiff asserts "a cause of action at law and in equity pursuant to 42 U.S.C. § 1983 to redress a deprivation of plaintiffs right to substantive due process as guaranteed by the Fourteenth Amendment to the United States Constitution." Complaint, ¶ 22. The gist of this Count is that "the Resolution adopted by Warr Acres is a sham, intended to invoke the power of eminent domain simply to take real property from one group of business owners and convey it to another, all in order to raise Warr Acres' sales tax revenues. There are no blighted conditions within the designated area. . . ." Complaint, ¶ 24. Hence, concludes the plaintiff, "the Resolution lacks any factual or rational basis whatsoever, and is arbitrary, capricious and unreasonable." Id.
The defendants' Rule 12(b) challenge to Count Two is predominantly based upon their contention that Count Two is not ripe for adjudication under Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985) and its progeny. In response, plaintiff insists that it does not assert a claim of inverse condemnation for an uncompensated taking but, instead, asserts a claim for deprivation of its right to substantive due process. Plaintiff accordingly concludes that the substantive due process claim is ripe for adjudication. Plaintiff then argues, in response to the Rule 12(b)(6) prong of defendant's motion, that its "complaint alleging a false designation of blight with no rational basis whatsoever states a substantive due process claim under 42 U.S.C. § 1983." Plaintiffs response to defendants' motion for partial dismissal, at 14. Plaintiff also urges that it properly invokes this court's supplemental jurisdiction and states a valid claim under Oklahoma law for violation of the substantive due process guarantee in the Oklahoma Constitution. Id. at 17.
The substantial body of post- Williamson case law plainly demonstrates that analysis of a Williamson ripeness challenge requires careful analysis of the substantive nature of the claims asserted by the plaintiff For that reason, and, more importantly, because the plaintiff in the case at bar has sought to avoid a ripeness dismissal by disclaiming any intent to assert that it has suffered a Fifth Amendment taking, the court must necessarily determine, at least preliminarily, whether plaintiff's substantive due process claim provides a viable means of escaping a ripeness challenge. If the substantive due process claim is a paper tiger, the court will not permit plaintiff "to circumvent the ripeness requirements simply by alleging a more generalized due process . . . violation," Bateman v. City of Bountiful, 89 F.3d 704, 709 (10th Cir. 1996). The court must consequently determine whether the substantive due process claim has teeth. If it does not, then it will not provide a safe harbor from defendants' ripeness challenge. The court will first address ripeness.
A. Analysis under Williamson and Graham and their Tenth Circuit progeny.
In Williamson Count Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985), the plaintiff complained that the county's application of its zoning regulations to plaintiff's real estate development amounted to a taking without just compensation. id. at 182. The Court took care to note that the trial court "granted a directed verdict to [the county] on the substantive due process and equal protection claims, and the jury found that respondent had not been denied procedural due process. Those issues are not before us." Id., n. 4. Thus, the only due process claim asserted by the plaintiff was a claim of a taking in violation of the Due Process Clause of the Fourteenth Amendment. Id. at 197. The Court held that the regulatory taking claim was unripe due to plaintiffs failure to seek a variance, Id at 191-94, and because plaintiff had failed to "seek compensation through the procedures the State has provided for doing so" Id. at 194. Without judging the merits of the due process taking claim, the Court held that that claim was also premature due to plaintiffs failure to seek a variance Id. at 199-200.
Although there is no Tenth Circuit authority squarely on point, the circuit court's post-Williamson decisions provide substantial guidance for the resolution of the ripeness issue in the case at bar. However, the necessary inquiry does not end with an analysis of ripeness underWilliamson. Plaintiffs who would challenge local government action in federal court frequently assert claims of denial of due process and equal protection, in addition to alleging a taking. For that reason, as the Tenth Circuit's decisions make clear, an analysis of ripeness underWilliamson will often lead inexorably to consideration of whether, underGraham v. Connor, 490 U.S. 386 (1989), the court must "subsume the more generalized Fourteenth Amendment due process protections within the more particularized protections of the Just Compensation Clause." Miller v. Campbell County, 945 F.3d 348, 352 (10th Cir. 1991), cert. denied 502 U.S. 1096 (1992).
In Landmark Land Company v. Buchanan, 874 F.2d 717 (10th Cir. 1989), a long-planned development was stymied because the issuance of building permits was suspended due to the mere pendency of a zoning change which, if adopted, would have established a use restriction incompatible with the planned development. Landmark alleged "no efforts to explore the possibility of alternative development plans with the City." Id at 721. The court also observed that Landmark should pursue a variance or a proposal for less intense development in order to establish that further efforts with the City would be futile. Id at 722. Applying Williamson, the Court of Appeals held that the district court had properly dismissed Landmark's taking, substantive due process and equal protection claims as unripe. Id at 719.
Miller v. Campbell County, decided two years after Landmark Land, is important both for the court s treatment of the Williamson ripeness issue and its application of Graham. In Miller, an entire subdivision was declared to be uninhabitable for health reasons. The plaintiffs, who had been ousted from their homes without compensation, alleged that the declaration of uninhabitability was baseless. They asserted a Fifth Amendment takings claim as well as a procedural due process claim and a substantive due process claim. The Court of Appeals held that the takings claim was unripe and concluded that, under Graham, it was "more appropriate in this case to subsume the more generalized Fourteenth Amendment due process protections within the more particularized protections of the Just Compensation Clause." Id. at 352. However, the court also analyzed the due process claims on their merits, determining that the plaintiffs had not been denied either substantive or procedural due process. Id at 353-54. As to substantive due process, the court evaluated the defendants' actions in light of the facts with which they were confronted, concluding that "[w]e cannot say on this record that the defendants' actions were arbitrary, capricious and unreasonable." Id at 354.
After making short work of a takings claim asserted by a rancher who had suffered neither a regulatory taking nor a physical invasion and had not bothered to seek just compensation in state court (J.B. Ranch, Inc. v. Grand County, 958 F.2d 306 (10th Cir. 1992)), the Court of Appeals again addressed ripeness issues in Rocky Mountain Minerals Asphalt, Inc. v. Bd. of County Comm'rs, 972 F.2d 309 (10th Cir. 1992). InRocky Mountain Minerals, plaintiffs mine was shut down as a result of a change in zoning regulations. The plaintiff's failure to pursue an inverse condemnation action in state court resulted in dismissal of his takings claim, which was not contested on appeal. The procedural due process claim was resolved against the plaintiff on the merits in the district court, which left plaintiff in the curious position of arguing on appeal that the due process claim was also unripe and should have been dismissed for that reason, rather than on the merits. The Tenth Circuit agreed. The court held that, because plaintiff failed to resort to state condemnation procedures, "the procedural due process claim is likewise not ripe because it is in essence based on the same deprivation [as the takings claim]." Id. at 312. The due process claim did not provide an avenue of escape from a ripeness challenge. The significance of Rocky Mountain Materials for the case at bar lies in the fact that the due process claim fell to a ripeness challenge because a takings claim was appropriate, was asserted, and (most importantly) was so closely matched factually with the due process claim:
When a plaintiff alleges that he was denied a property interest without due process, and the loss of that property interest is the same loss upon which the plaintiff's takings claim is based, we have required the plaintiff to utilize the remedies applicable to the takings claim.Id. at 312.
In the case at bar, plaintiff is not caught up in a regulatory process that has not run its course. Plaintiff does not assert a violation of its right to procedural due process or equal protection. Most importantly, plaintiff has neither asserted a takings claim nor guilefully avoided asserting a takings claim. Plaintiff simply does not have a takings claim and does not assert one. If there is no takings claim, there can be no "concomitant takings claim," Bateman v. City of Bountiful, 89 F.3d 704, 709 (10th Cir. 1996) to be subsumed within the more particularized protections of the Just Compensation Clause. Miller v. Campbell County, 945 F.3d 348, 352 (10th Cir. 1991), cert. denied 502 U.S. 1096 (1992).
As attractive as this analysis may be, it remains true that federal court consideration of the merits of a property-related civil rights claim against a local government is not to be had for the asking. But it cannot be inferred from the line of cases beginning with Landmark Land and ending with Bateman that the door to the federal courthouse is closed. Thus, in Crider v. Bd. of County Comm'rs, 246 F.3d 1285 (10th Cir. 2001), the court addressed on the merits a substantive due process claim asserted by property owners who challenged the imposition of a rural preservation zoning classification upon their property. Although the claim failed on its merits, the court articulated and applied a standard (discussed further in part B, below) which it then applied to the substantive due process claim. Id. at 1289-90.
In support of dismissal, defendants argue that plaintiff's claim is really a takings claim which should be dismissed as unripe for failure to pursue inverse condemnation in state court. Defendants' brief, at 9-10. However, the action challenged by plaintiff is not one which amounts to a taking and the injury alleged is not one which would result from a taking. Hence plaintiff does not seek relief on the basis of a taking. Plaintiffs central complaint is that its property has been swept into a redevelopment project on the basis of — and only by virtue of — a completely fabricated declaration of blight. Although, as the Tenth Circuit has explicitly affirmed, "[u]nder certain circumstances, due process rights may arise which are beyond the more particularized claim asserted pursuant to the Just Compensation Clause[,]" J.B. Ranch, at 309, this is not even that case, because the injury alleged by plaintiff does not, in any event, conform to the framework provided by the law of Fifth Amendment takings. Graham applies "if a constitutional claim is covered by a specific constitutional provision." United States v. Lanier 520 U.S. 259, 272 n. 7 (1997). If the factual setting for a substantive due process claim does not implicate the Just Compensation Clause, the claim is to be analyzed using substantive due process standards. Cf., County of Sacramento v. Lewis 523 U.S. 833 at 842-44 (1998) (analyzing an excessive force claim that did not involve a seizure or a search using substantive due process standards rather than under the Fourth Amendment).
The action complained of is final. Compare, Bateman, 89 F.3d at 707 and J.B. Ranch, 958 F.2d at 308-09 (no final action). The neighborhood redevelopment legislation does not provide for variances. Compare,Williamson, 473 U.S. at 187-88; Bateman, 89 F.3d at 706-07 (variance available). The declaration of blight has been made, and plaintiffs property has been included in the redevelopment area. For all purposes relevant to plaintiff's claim, the defendant city has, indeed, "arrived at a final, definitive position regarding how it will apply the [redevelopment act] to the particular land in question." Williamson at 191. The court accordingly concludes that plaintiffs claim presents a ripe controversy.
B. The merits.
The defendants have moved to dismiss under Rule 12(b)(6) (failure to state a claim) as well as under Rule 12(b)(1) (lack of subject matter jurisdiction). Although the Rule 12(b)(6) motion places in issue the sufficiency of the complaint on the merits, defendants' arguments for dismissal are confined almost entirely to ripeness, which implicates subject matter jurisdiction, not the merits. Bateman at 706. The merits of plaintiffs substantive due process claim are addressed in detail in plaintiffs brief in response to the motion to dismiss. As is discussed above, the court has undertaken an analysis of the substantive due process claim for the purpose of determining whether it is but an illusory vehicle employed by plaintiff "to circumvent the ripeness requirements simply by alleging a more generalized due process . . . violation, "Bateman v. City of Bountiful, 89 F.3d 704, 709 (10th Cir. 1996).
Although the substantive due process claim is still subject to challenge as a matter of law and on the facts, the court has concluded that plaintiffs substantive due process claim is at least colorable.
The continued existence of the much-criticized doctrine of substantive due process is confirmed by cases as old as Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) and as new as Washington v. Glucksberg, 521 U.S. 702 (1997). However, unlike S.E.C. Rule 10b-5, "a judicial oak which has grown from little more than a legislative acorn[.]" Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 737 (1975), the doctrine of substantive due process has not grown in fertile soil. Cases which grant relief' on the basis of the doctrine are rare, presumably because of an abiding fear that, outside of narrow confines, it "in vests judges with an uncanalized discretion to invalidate federal and state legislation." Coniston Corp. v. Village of Hoffman Estates, 844 F.2d 461, 465 (7th Cir. 1988). The doctrine does not provide an occasion for second-guessing local government decisions. Rather, it is intended only to prevent government from abusing its power or employing it as an instrument of oppression.Norton v. Village of Corrales, 103 F.3d 928, 932 (10th Cir. 1996).
A plaintiff asserting a substantive due process claim must allege and prove (i) a property or liberty interest warranting due process protection, and (ii) that the challenged governmental action was arbitrary and capricious. Crider v. Bd. of County Comm'rs, 246 F.3d 1285, 1289 (10th Cir. 2001). In this context, "arbitrary and capricious" does not mean simply erroneous. Id. A substantive due process violation is established only if it is shown that the alleged purpose behind the state action has no conceivable rational relationship to the exercise of the state's traditional police power. Id. The defendant's actual motivations are irrelevant. Id. Thus, plaintiff cannot win this case by proving an improper motive (nor can it lose this case by failing to prove an improper motive).
The first prong — establishing the existence of a property interest — is a matter of state law; the second prong is essentially factual, or at least a fact-bound legal issue. See, e.g.,City of Monterre v. Del Monte Dunes, 526 U.S. 687, 721 (1999) (permissible, in a § 1983 action, to submit to jury the question of whether the city's decision bore a reasonable relationship to its proffered justifications).
Property rights are not created by the Constitution; they are created and their dimensions are defined by existing rules or understandings that stem from an independent source, such as state law. Federal Lands Legal Consortium v. United States, 195 F.3d 1190, 1196 (10th Cir. 1999) (procedural due process). "Property" is more than economic value. Phillips v. Washington Legal Foundation, 524 U.S. 156, 169-70 (1998). [I]t also consists of the group of rights which the so-called owner exercises in his dominion of the physical thing, such as the right to possess, use and dispose of it. Id at 170 (internal quotation marks omitted). In the case at bar, the court's preliminary conclusion is that an incident of plaintiffs ownership of its shopping center is the right not to have the property swept into the redevelopment process on the basis of what is alleged in this case to be a declaration of blight which was made in the face of a complete absence of facts supporting the existence of the statutory factors. This is a right wholly distinct from the right to be free of an uncompensated taking. The statutory criteria are specific — sufficiently specific to fall within the body of "existing rules or understandings" that define a protectable property interest. As has been noted, the requirement that a majority of the specific statutory blight factors be found to exist contrasts markedly with the much looser corresponding provision in the 1959 legislation.
The key elements, for purposes of substantive due process analysis, are the specificity of the statutory criteria and the alleged utter falsity of the legislative findings. If the City Council's findings are not shown to have been specious, then this case will fall to the Court's holding inBerman v. Parker, 348 U.S. 26 (1954). Berman established that the police power permits the inclusion of non-blighted property in an integrated redevelopment project. The issue was the permissibility of forced inclusion of non-blighted property, not the permissibility of false findings purportedly made by way of application of specific statutory criteria. Cf. Oberndorf v. City and County of Denver, 900 F.2d 1434 (10th Cir. 1990), where the factual basis for the finding of blight was disputed, id at 1437, 1441, and the Court of Appeals concluded, largely as a factual mailer, that the finding of blight had not been shown to be a sham.
V. MOTION TO DISMISS — COUNT THREE
In their motion to dismiss, the defendants also assert that Count Three of the complaint is not ripe for adjudication. Count Three asserts that defendants have violated plaintiffs right to substantive due process under the Oklahoma Constitution.
As to this count, based entirely on Oklahoma law, defendants urge that the relevant provision of the Oklahoma Constitution "has a definitional sweep that is coextensive with its federal counterpart, i.e. the Fifth and Fourteenth Amendments of the United States Constitution." Defendants' brief, at 12. Defendants then adopt their reasoning in support of their federal ripeness arguments as to Count Two of the complaint. Id. In support of their conclusion, the defendants cite SK Finance, S.A. v. La Plata County, 126 F.3d 1272 (10th Cir. 1997) as an example of a case in which the Court of Appeals upheld the district court's dismissal, for unripeness, of an inverse condemnation claim asserted under Colorado law.
Defendants do not urge that the state claims are unripe for any reasons other than those which it has unsuccessfully urged with respect to the federal claims. Accordingly, the court concludes, on the same basis, that the state law claims asserted by plaintiff are ripe. The Tenth Circuit's decision in SK Finance does not improve defendants' position on the ripeness issue. In SK Finance, the Court of Appeals held that (i) it did have diversity jurisdiction of the state law-based inverse condemnation claim (disagreeing with the Fifth Circuit on that point), (ii) Colorado law required a final decision of a regulatory authority to support a regulatory taking claim, and (iii) the district court did not err in dismissing the state law takings claims as unripe. The disposition of the state law takings claim in SK Finance is unpersuasive for the same reason that the cases dealing with ripeness issues as to federal taking claims are inapposite, as discussed in part IV, above.
CONCLUSION
The court accordingly concludes that defendants' motion for partial dismissal and motion for partial summary judgment must be, and therefore are, DENIED.