The Sixth Circuit's opinion in Lilly Investments v. City of Rochester, No. 15-2289 (Jan. 5, 2017) is not slated for publication, but its worth a read anyhow because it involves Williamson County ripeness, and the "final decision" rule. Here's how the court summarized the case:
This case concerns Louis Leonor’s efforts to open a dental clinic in Rochester, Michigan. The clinic stands nearly complete, but in May 2013 Rochester issued a stop-work order preventing Leonor from finishing and operating the clinic, prompted by an expert’s finding that the clinic does not comply with the conditions of a city permit. That same expert found compliance a few months later after Leonor made corrective changes. Nonetheless, Rochester refused to lift the stop-work order or take an up-down vote on the project unless Leonor waived any legal claims and paid a $40,000 fee. Unwilling to comply with those conditions, Leonor filed a complaint asserting a regulatory taking, which the district court dismissed on ripeness grounds, citing the lack of a “final decision.”
Slip op. at 1.
The property owner brought suit in state court, after which the city removed the case to federal court and moved to dismiss. The district court concluded the city had not reached a final decision because the property owner "ha[d] not been met by the consistent and persistent pattern of resistance," and thus pursuing more state process wasn't futile.
The Sixth Circuit panel disagreed, holding that "It is true, as the district court recognized, that many cases excusing compliance with the finality requirement involve prolonged delays calculated to defeat the landowner in a 'war of attrition.'" Slip op. at 8. But although the city was willing to consider another site plan, it's review was conditioned on the property owner surrendering its ability to bring claims against the city. The panel agreed that "[t]he Commission’s demands presented Leonor with a Morton’s Fork: the choice between “voluntarily” waiving potential claims and forgoing a necessary ingredient to ripen those claims—a 'final decision.' Leonor maintains that the parties are therefore at an 'impasse,' and that their core dispute—whether the stop-work order amounts to a regulatory taking—is
sufficiently defined to permit judicial review." Slip op. at 8.
The court also shot down the city's argument -- cue Leo Rosten again here -- that the property owner had not exhausted available state compensation remedies. Recall that the owner filed its takings claims in state court, as Williamson County requires, and that it was the city which removed the case to federal court. The Sixth Circuit was having none of that nonsense, and agreed with the Second and Fourth Circuits, which have held that when a defendant removes a state takings claim to federal court, it waives any Williamson County argument that the plaintiff has not exhausted state compensation remedies. Slip op. at 13.
All in all a well-thought out opinion, and its only shortfall is that we wish it were published.
Lilly Investments v. City of Rochester, No. 15-2289 (6th Cir. Jan. 5, 2017 ) (unpub.)
