Lattice Of Coincidence: Regulatory Takings Claim Accrues When Regulator Makes Final Decision (Williamson County Lives!), Not When Appeals Are Exhausted

Synchronicity (Jung, not The Police). Serendipity. Lattice of coincidence. Whatever you call it, sometimes things seem to come in waves. 

So it seems with the statue of limitations for inverse and regulatory takings claims this week. We had not dealt with the issue for a while. Radio silence. Then boom! The issue crops up repeatedly and we can't seem to avoid it. First, in a brief we're drafting in a pending case in the Hawaii Supreme Court. Then in a Federal Circuit opinion yesterday. And also yesterday in an opinion from the Maryland Court of Special Appeals, Harford County v. Maryland Reclamation Associates, Inc., No. 12-C-13-000509 (Aug. 1, 2019). 

MRA bought land way back in 1990 (statute of limitations cases often have a long history, no?) to operate a rubble landfill. But after the purchase, the County changed its regs to prohibit (guess what) ... rubble landfills."For nearly three decades, MRA has fought the County's regulatory efforts in various administrative and judicial forums. The dispute now reaches the Maryland appellate courts for a fifth time." Slip op. at 1 (footnote omitted). 

MRA filed an regulatory takings claim in 2013, and eventually the jury awarded a whopping $45 million in just compensation and interest. The County asserted the claim was time barred by the three-year statute of limitations, because it accrued in 2007 when the Board of Appeals administratively denied MRA's variance request. The trial court, by contrast, concluded the claim accrued in 2010, when the Court of Appeals issued an opinion upholding the denial of the variance. 

The court of appeals held that "An inverse condemnation claim 'accrues when the affected party knew or should have known of the unlawful action and its probable effect.'" Slip op. at 20. You don't have to know everything, but a plaintiff must also allege facts showing the taking. Here, MRA alleged the County took its property by interfering with MRA's investment-backed expectations and the previously-issued rubble landfill permit. "In short, MRA asserts that the County made it impossible to use the land for its intended purpose." Slip op. at 21. In response, the County argued:

MRA discovered the County’s allegedly unlawful conduct no later than June 5, 2007, when the Board of Appeals voted unanimously to deny MRA’s requests for variances. Without the variances, MRA could neither construct nor operate a rubble landfill on the property. Applying this logic, the County urges us to hold that the alleged taking occurred on June 5, 2007 and, therefore, the statute of limitations on MRA’s inverse condemnation claim began to run on that date.

Slip op. at 22. MRA, however, argued that the taking must become "permanent or stablized," and that didn't occur until the court of appeals affirmed the denial of the variance.

The court agreed with the County. Citing the first (and still viable) prong of Williamson County (a takings claim isn't ripe until the property owner has received the regulator's "final decision"), the court held that a takings claim accrues when the Board denied the variance, not when MRA's appeal of that denial became final:   

The County asserts that in June 2007, the Board of Appeals reached a final decision on whether MRA could operate a rubble landfill on the property at issue. The County contends that MRA’s claim accrued in 2007 and that it was, therefore, immaterial that the Court of Appeals had not yet affirmed or reversed the Board’s decision. We agree. Indeed, MRA has not presented us with any authority to support the proposition that an inverse condemnation claim is tolled or does not otherwise accrue until all judicial appeals have been exhausted.

Slip op. at 23-24. Thus, "MRA’s inverse condemnation claim accrued on June 5, 2007, when the Board of Appeals issued its final decision denying MRA’s requests for variances. It was on that date that MRA discovered the alleged taking of its property." Slip op. at 25.

The appeal to the courts did not affect the accrual of the claim. Which means that MRA should have, according to the court, both appealed the Board's denial of the variance, and also filed a separate lawsuit for the taking. Do them in parallel, not in serial. 

You just know, however, that if it had done so, the County would have filed a motion to dismiss or to stay the takings lawsuit, on the basis that the claim wasn't ripe (hey, MRA's appeal isn't done yet, and if it prevails there, we didn't deny all uses!). As we wrote yesterday, property owners should expect to get whipsawed by the you-are-too-early-or-you-are-too-late argument. So be prepared. If there is any question, file. Better to be dismissed for being too early, than too late. (All this assumes a client who can pay for the multiple lawsuit, multiple forum process that courts often require in cases like this. Federal takings lawyers understand all too well the Tucker Act and § 1500 Shuffle) Nor should governments bitch and moan when they have to respond to a multiplicity of lawsuits by property owners who are simply covering all their bases as the court instructs. 

After all, it's right there in the opinion. See slip op. at 29-30 ("MRA could have filed its claim within the limitations period to ensure that its claim was timely. The circuit court, if necessary, could have then stayed the case to await the Court of Appeals’ decision.") (footnote omitted). 

Harford County v. Maryland Reclamation Associates, Inc., No. 12-C-13-000509 (Md. Ct. App. Aug. 1, 2019)