29 F.4th 226
5th Cir.2022Background
- Seventy landowners and businesses obtained state-court judgments totaling about $10.5 million against the Sewerage & Water Board of New Orleans (SWB) for property damage from SELA construction.
- By January 2021 the SWB had not paid any judgments; plaintiffs sued in federal court under 42 U.S.C. § 1983, alleging a Fifth Amendment taking (a "second taking") and due process violations for failure to timely pay.
- Plaintiffs sought writs of execution (to seize SWB property) and a declaratory judgment that SWB must pursue reimbursement from the Army Corps under a joint Damages SOP.
- The district court granted SWB’s Rule 12(b)(6) motion, holding longstanding precedent foreclosed a taking claim based on nonpayment and dismissed the § 1983 claim; it also declined jurisdiction over the standalone declaratory claim and denied leave to amend as futile.
- Plaintiffs appealed; the Fifth Circuit affirmed, concluding there is no federal constitutional property right to timely payment on a judgment and thus no § 1983 claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to timely pay a state-court money judgment is a Fifth Amendment taking actionable under § 1983 | Nonpayment is an "independent/second" taking of the property interest in timely payment | No cognizable property interest in timely payment; a judgment is a continuing liability (debt) | Held: No; claim foreclosed by precedent (dismissed) |
| Whether Williamson County/Knick permit filing this takings claim in federal court | Knick/Williamson allow federal takings suits and thus Plaintiffs can bring this claim federally | Those cases address ripeness/federal forum, not whether nonpayment constitutes a taking | Held: Not dispositive; ripeness doctrine doesn't create a taking where none exists |
| Whether the district court had federal jurisdiction over the declaratory Damages SOP claim absent a federal constitutional claim | Plaintiffs sought declaratory relief on SOP duties | DJ Act does not itself confer jurisdiction; no remaining federal claim | Held: District court properly declined to exercise jurisdiction |
| Whether leave to amend should have been granted after dismissal | Plaintiffs asked leave to amend generally if pleadings were deficient | Any amendment would be futile given settled law; plaintiffs offered no specific amendments | Held: Denial of leave to amend was proper (futile) |
Key Cases Cited
- Folsom v. City of New Orleans, 109 U.S. 285 (holds that a money judgment against a government is a continuing liability and nonpayment is not a taking)
- Minton v. St. Bernard Parish School Bd., 803 F.2d 129 (5th Cir.) (reaffirms that a judgment creates a debt, not a right to immediate payment)
- Vogt v. Bd. of Comm’rs of Orleans Levee Dist., 294 F.3d 684 (5th Cir.) (distinguishes cases where government withholds private property determined to belong to plaintiff)
- Williamson County Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172 (addresses ripeness for takings claims and state-court procedures)
- Knick v. Twp. of Scott, 139 S. Ct. 2162 (clarifies when takings claims may be brought in federal court and overrules element of Williamson County)