United States District Court, E.D. Kentucky, Southern Division, London
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE
matter is before the Court on the plaintiff's motion to
alter, amend, or vacate (DE 12) this Court's opinion,
which denied the plaintiff's motion to remand and granted
the defendants' motion to dismiss this action (DE 10).
For the following reasons, the motion will be granted insofar
as it asks the Court to alter its dismissal of the
plaintiff's federal takings claim and its state-law
matter is rooted in a zoning dispute between the plaintiff
Clifty Properties, LLC and the defendant, the city of
Somerset, Kentucky. Clifty Properties owns some land in
Somerset that is currently zoned only for residential
purposes. Clifty Properties wants it designated for
commercial development but the city of Somerset has rejected
Clifty Properties' application for a zoning change.
Properties has sought relief through the courts. It filed its
first complaint to that end in state court on June 9, 2015.
The defendants removed that action to this Court and the
matter proceeded to summary judgment. Clifty Properties,
LLC v. City of Somerset, No. 15-115, 2016 WL 7015641
(E.D. Ky. Nov. 30, 2016). United States District Judge
Gregory Van Tatenhove construed Clifty Properties'
complaint to assert three constitutional claims:
a claim that the city's actions constituted a
“taking” of Clifty Properties' property
without just compensation in violation of the Fifth
Amendment; a claim that the city's actions constituted a
violation of Clifty Properties' substantive due process
rights; and a claim that the city's actions constituted a
violation of Clifty Properties' procedural due process
rights. In addition, Judge Van Tatenhove determined that
Clifty Properties asserted various violations of state law.
the procedural and substantive due process claims, Judge Van
Tatenhove determined that both claims must be dismissed. With
regard to the substantive due process claim, Judge Van
Tatenhove determined that, to the extent Clifty Properties
sought monetary damages, the claim need not be addressed by
the court because that claim was subsumed by the federal
takings claim. Id. at *5. To the extent Clifty
Properties sought injunctive relief with the claim, Judge Van
Tatenhove determined that the claim had to be dismissed
because Clifty Properties did not have a constitutionally
protected property interest in a not-yet-granted rezoning of
its land. Id. For the same reason, Judge Van
Tatehnove dismissed the procedural due process claim.
Id. at *6.
Clifty Properties' Fifth Amendment takings claim, Judge
Van Tatenhove determined that this claim was not ripe for
review. Id. at *5. A federal regulatory takings
claim generally must meet two requirements to be ripe. First,
the regulatory authorities must have come to a
“final” decision. DLX, Inc. v. Kentucky,
381 F.3d 511, 518 (6th Cir. 2004) (citing Williamson
County Regional Planning Comm'n v. Hamilton Bank,
473 U.S. 172, 186-191 (1985)). Second, the plaintiff must
have exhausted its remedies in state court; the plaintiff
must have sought compensation through the procedures the
state has provided. Id. This means the plaintiff
must have pursued an action for just compensation or inverse
or reverse condemnation in the state courts. Id. No
violation of the Fifth Amendment occurs until a plaintiff has
actually pursued procedures for just compensation in state
courts and been denied. Id. at 519.
Van Tatenhove noted that Kentucky law provides for a reverse
or inverse condemnation procedure in state court by which a
plaintiff may allege his property has been wrongfully taken.
Clifty Properties, 2017 WL 7015641, at * 4. Clifty
Properties had not initiated such a procedure. Accordingly,
Judge Van Tatenhove dismissed the takings claim without
prejudice as unripe. Id.
requirement that the plaintiff must pursue a claim for just
compensation in state court before asserting a federal
takings claim in a federal court, however, could mean that a
plaintiff could never actually pursue the federal takings
claim in federal court. This is because, in the federal
court, “preclusive effect must be given to that prior
state-court action . . . according to the res judicata law of
the state.” DLX, Inc., 381 F.3d at 520. Under
Kentucky's res judicata law, plaintiffs are barred not
just from reasserting claims that they actually litigated in
a prior action but also from asserting any claims that
should have been raised in the prior litigation.
Id. Under this law, even after a plaintiff pursues a
state compensation claim - as required for federal ripeness -
the federal takings claim would still have to be dismissed
because it could have been asserted in the state
just-compensation action. Thus, the federal ripeness
requirements for the takings claim and the state doctrine of
claim preclusion “could possibly operate to keep every
regulatory-takings claimant out of federal court.”
Id. at 521.
prevent that situation, the Sixth Circuit has recognized a
so-called England reservation named for England
v. Louisiana State Board of Medical Examiners, 375 U.S.
411 (1964). DLX, Inc., 381 F.3d at 521. With an
England reservation, the plaintiff does not litigate
its federal takings claim in its state court action for just
compensation but instead makes “an explicit reservation
of their federal claims to federal court.” Id.
In DLX, Inc., the Sixth Circuit held that “a
party's England reservation of federal takings
claims in a state takings action will suffice to defeat claim
preclusion in a subsequent federal action.”
Id. at 523.
dismissing all of Clifty Properties' federal claims,
Judge Van Tatenhove declined to exercise jurisdiction over
the state-law claims and dismissed them without prejudice. He
then entered judgment in favor of the defendants. In
accordance with an England reservation, Judge Van
Tatenhove instructed, “If the state court denies Clifty
Properties just compensation through the reverse condemnation
procedure and if Clifty Properties reserves its other federal
claim(s) during that litigation, it may litigate its federal
takings claim in federal court at that time, provided the
ripeness requirements have been fully satisfied.”
Clifty Properties, 2016 WL 7015641, at *4 n.3.
Properties then filed another action in state court. With the
complaint, Clifty Properties again asserts that the city
authorities failed to afford Clifty Properties substantive
due process and procedural due process. (DE 1-2, Complaint,
¶¶ 29, 30.) It also asserts a federal takings
claim. (DE 1-2, Complaint ¶33.) The complaint cannot be
read to contain an England reservation of these
claims as provided for in DLX. See DLX, 381 F.3d at
defendants again removed the action to this Court and moved
to dismiss Clifty Properties' complaint. The defendants
argued that this second complaint by Clifty Properties again
asserts a federal constitutional takings claim. It asked the
Court to dismiss that claim without prejudice so that Clifty
Properties “can refile its cause of action (hopefully
without federal allegations) in the Pulaski Circuit
Court.” Plaintiff Clifty Properties likewise asked the
Court to take action that would permit this matter to proceed
in state court. It did so through a motion to remand, asking
the Court to remand its state law claims and to stay its
federal claims pending a resolution of the state law ...