Real Estate & Property Law

8th Circuit: Federal Takings Lawsuit Not Ripe

By Robert Thomas (inversecondemnation.com)

In granting a special zoning exemption to Shelter House, Iowa City allowed it to build a homeless shelter on land next to Mr. and Mrs. Dahlen's mobile home park. After losing their challenge to the zoning exemption, the Dahlens filed suit in federal court alleging the exemption violated their due process rights.

That claim was abandoned when the Dahlens amended their complaint to allege that they owned a portion of the Shelter House property by adverse possession, and the city's approval of a site plan for the homeless shelter was an uncompensated taking of their property. The District Court dismissed the amended complaint because it was not ripe under Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

In Dahlen v. Shelter House, No. 09-1909 (8th Cir. Mar. 24, 2010), the U.S. Court of Appeals for the Eighth Circuit agreed. The Dahlens asserted Williamson County was not applicable and they did not need to seek just compensation through a state court inverse condemnation lawsuit. Slip op. at 4. Instead, they argued that the taking was private because it was accomplished "without a justifying public purpose" as defined by Iowa's eminent domain statutes, and thus resort to Iowa's courts was unnecessary. Slip op. at 4-5.

The court rejected this argument on the grounds it was "attempting to bootstrap [a] Iowa statutory claim into a federal constitutional claim." Slip op. at 6. The remainder of the opinion goes on to justify the result and ends up taking a detour through the doctrinal wilderness, although we cannot quite trace the genesis of the detour.

Was it the property owners' insistence this was a "takings" claim and not a substantive due process claim, if, as they argued, allowing a homeless shelter on their property served no public use under Iowa's eminent domain law? After Lingle  v. Chevron  U.S.A. Inc., 544 U.S. 528 (2005), regulatory takings remedies focus for the most part on just compensation, and the claim that the government action fails to "substantially advance a legitimate state interest" and is invalid finds a doctrinal home in due process, not "takings." The city in this case was not claiming to exercise its eminent domain power to affirmatively take what the Dahlens claimed was their land, and the "taking" alleged was only a de facto taking. So it is difficult to see how an Iowa statute that limits the exercise of eminent domain is even applicable. Instead, through the zoning power, the city granted Shelter House a zoning exemption.

The court's opinion hardly added clarity when it came up with this gem, in dicta:

We ultimately reject their claim that violations of state eminent domain statutes necessarily give rise to federal constitutional claims.

Slip op. at 6. A federal court has no interest when a state may be violating its own statutes and that violation impacts property rights? That's not right. We think the court really should have said this:

The city did not violate Iowa's eminent domain statutes which limit exercises of the condemnation power to public uses. The city did not exercise its eminent domain power to attempt to affirmatively take the Dahlens's property, it exercised its zoning power to grant Shelter House a zoning exemption. If the exercise of the city's zoning power did not "substantially advance a legitimate state interest," see Lingle, it may have violated the Dahlens's due process rights, and ripening a claim under Williamson County is unnecessary. The Dahlens, however, removed the due process claim when they amended their complaint.

If you are interested, here are the main briefs filed by the parties:

• Dahlen's brief

• Iowa City's brief
  

• Shelter House's brief

Full post as published by inversecondemnation on March 25, 2010 (boomark / email).