Beaver Street Investments, LLC v. Summit County, Ohio
65 F.4th 822
6th Cir.2023Background
- Summit County initiated tax-foreclosure proceedings against Beaver Street Investments, LLC (BSI) before the County Board of Revision (BOR) on Nov. 1, 2017 under Ohio Rev. Code §§ 323.65–323.79.
- The BOR issued a final adjudication of foreclosure on June 3, 2019; under Ohio law a 28-day statutory redemption period followed during which BSI could redeem by paying delinquent taxes.
- BSI filed a Chapter 11 petition on June 27, 2019, which automatically stayed execution of the BOR adjudication; the bankruptcy court granted relief from the stay on Jan. 17, 2020.
- The BOR determined the statutory redemption period expired on Jan. 21, 2020, BSI never redeemed, and the County transferred the parcels to its land bank on Jan. 30, 2020.
- BSI sued under 42 U.S.C. § 1983 on Jan. 3, 2022, alleging an uncompensated Fifth Amendment taking because the land-bank transfer extinguished surplus equity; the district court dismissed as time-barred, concluding the two-year limitations period began on June 3, 2019.
- The Sixth Circuit reversed, holding the § 1983 limitations period accrued when the redemption period ended (Jan. 21, 2020); Judge McKeague dissented, arguing accrual was June 3, 2019 (the BOR adjudication).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did the § 1983 takings claim accrue (when did statute of limitations run)? | Accrual occurred when the statutory redemption period expired (Jan. 21, 2020), because until then BSI could have redeemed and no final taking had occurred. | Accrual occurred on the BOR’s final adjudication (June 3, 2019); that adjudication was the final decision and alerted a reasonable person to the injury. | Court held accrual occurred when the redemption period ended (Jan. 21, 2020). |
| Did the BOR’s final adjudication alone constitute a ‘final decision’ sufficient to start the limitations clock? | No — final decision requires certainty the County will keep title; that certainty did not exist until redemption lapsed. | Yes — the BOR adjudication ordered transfer via the land-bank process, signaling the taking. | Court rejected that the adjudication alone started the clock; the redemption period’s potential to undo the transfer prevented a final decision. |
| Did BSI’s bankruptcy filing and the scope of tolling under the Bankruptcy Code change accrual or save the claim? | The stay tolled the process until the BOR’s later determination of expiration (Jan. 21, 2020); the BOR’s determination controls. | The bankruptcy tolling (per §108) only extended redemption for 60 days after filing, so limitations expired earlier. | Court found the BOR’s determination that redemption expired Jan. 21, 2020 dispositive and that pre-expiration uncertainty prevented accrual prior to that date. |
| Is Harrison controlling to start accrual at BOR adjudication? | Harrison supports a final-decision rule but does not mandate accrual at adjudication where a redemption period could still defeat the transfer. | Harrison held the taking occurred when the Board adjudicated foreclosure through the land-bank process. | Court distinguished Harrison: Harrison concerned ripeness and did not decide accrual when a redeeming opportunity remained; here accrual awaited redemption expiration. |
Key Cases Cited
- Knick v. Twp. of Scott, Pennsylvania, 139 S. Ct. 2162 (2019) (A takings claim accrues when the government takes property without compensation; the act of taking gives rise to the claim.)
- Harrison v. Montgomery Cnty., Ohio, 997 F.3d 643 (6th Cir. 2021) (discusses final-decision/ripeness for land-bank transfers; federal takings claim ripens after Board transfers title)
- Wallace v. Kato, 549 U.S. 384 (2007) (federal-law accrual rule governs when § 1983 claims begin to run)
- Palazzolo v. Rhode Island, 533 U.S. 606 (2001) (final-decision requires that the outcome be known to a reasonable degree of certainty)
- Kuhnle Bros., Inc. v. Cnty. of Geauga, 103 F.3d 516 (6th Cir. 1997) (§ 1983 accrual tied to when plaintiff knows or should know of injury; what would alert a typical lay person)
- Cooey v. Strickland, 479 F.3d 412 (6th Cir. 2007) (two-year statute of limitations applies to § 1983 claims in Ohio)