Here’s Bettendorf v. St. Croix County, No. 10-1359 (Jan. 20, 2011) a 2-1 decision from the U.S. Court of Appeals for the Seventh Circuit, another regulatory takings opinion we’ve been meaning to post for a while. The case involves a property owner’s claim that the county’s changing the zoning on his land from commercial to agricultural-residential was a taking and a violation of due process. The county changed the zoning in response to a state court judgment holding that the commercial zoning was void because it contained a provision that it would revert to agricultural-residential upon the property owner’s death or a sale to a new owner. The owner sued to invalidate the condition, but the state court invalidated the entire zoning ordinance. Put that one in the “be careful what you ask for” department.
But before you get to the majority’s treatment of the merits (no taking, no due process violation) and the lengthy dissent, you might well ask youself what a federal court is doing looking at the merits of a regulatory takings claim at all. That’s as rare as hens’ teeth, right? After all, Williamson County tells us that before a property owner can bring a takings case in federal court she must first seek compensation from the state, which requires her to file an inverse condemnation case in state court. There’s no indication in the opinion that the property owner did so. So how does this case end up in the Seventh Circuit since there’s no discussion of Williamson County, ripeness, or even San Remo?
The court doesn’t tell us. The appeal came from a federal district court of course, which entered summary judgment for the county after the property owner “alleg[ed] constitutional rights violations in connection with the County’s rescinding the commercial zoning designation.” Slip op. at 2. Which sort of begs the question: what kind of “constitutional rights violations,” federal or state?
A review of the majority opinion doesn’t help much. It starts off discussing takings under the heading “State Law Takings Claims” (slip op. at 3) maybe indicating that this is going off into the uncharted waters of whether a federal court exercising diversity jurisdiction can hear a state regulatory takings claim when the parties are diverse. Or did the court exercise supplemental jurisdiction over the state law takings claim when it considered the federal due process claims? But alas, the court does not elucidate.
And despite the heading, the majority didn’t limit its analysis to state law, stating “[i]t is well-settled that to establish a regulatory taking for which compensation is required under the Fifth Amendment and under Wisconsin law, the challenged government action must deprive a landowner of “all or substantially all practical uses of the property,” and cited a Wisconsin Supreme Court decision. Id. at 3-4. Next, the opinion recites the Penn Central three-part test for an ad hoc regulatory taking, but doesn’t cite Penn Central, and instead cites Concrete Pipe and Prods. Inc., v. Construction Laborers Pension Trust, 508 U.S. 602, and that Wisconsin case.
Sidebar: Concrete Pipe? We must’ve missed the day that case made it into the regulatory takings canon, so we checked it out. Turns out that it’s an ERISA case in which the Court held that something called the Multiemployer Pension Plan Amendments Act of 1980 “does not unconstitutionally deny Concrete Pipe an impartial adjudicator by placing the determination of withdrawal liability in the plan sponsor, here the trustees, subject to §1401’s presumptions.” Scanning further, we came to the takings part of the opinion where the Court rejected the claim that the taking should be analyzed as a Lucas per se taking, and unaminously concluded that the Penn Central test governed and that as a whole, there was no taking. But given that Concrete Pipe was not a land use case, we wonder why the Bettendorf opinion didn’t just cite Penn Central, or Lingle.
Back to the question of how this case made it into federal court. While the remainder of the takings portion of the opinion provides no real clue (see slip op. at 4-6), Judge Hamilton’s dissent gives us more of an indication, stating, “I agree with my colleagues that there is no apparent difference between federal and Wisconsin state takings analysis, so I draw on both sources of law in trying to predict how the Wisconsin Supreme Court would apply the law here.” Dissent at 13-14. So it appears that the court viewed this as a question of whether this was a taking the Wisconsin Constitution. But that still leaves us wondering how this case made it to federal court. Maybe we’ll have to go look up the District Court pleadings and see how this one slipped in.
Oh yes, the merits. Majority: no taking, no substantive or procedural due process violations. Judge Hamilton concurred in part and dissented in part, agreeing there were no due process problems, but concluding that there very well could have been a taking under Wisconsin law, and that the case should be remanded for further proceedings or dismissal to allow the property owner to pursue state remedies. Dissent at 29. He summed up his rationale thusly:
The majority’s decision gives our court’s approval, on bare pleadings, to a rare and extraordinary burden on property rights. The majority is saying that a local government can first designate a lawful use of property,allowing a property owner to make substantial investments in the property and to use it that way for more than 20 years, and then state courts, at the request of the local government, can suddenly outlaw the continued use without compensation for the property owner.”
Dissent at 12-13.
Professor Patty Salkin summarized the opinion at Law of the Land here.
Bettendorf v St Croix Cty, No. 10-1359 (7th Cir Jan 20 2011)