62 F.4th 882
4th Cir.2023Background:
- The Town of Chapel Hill's LUMO §3.10 (adopted 2010) requires developers to set aside affordable housing units or pay a fee-in-lieu as a condition for special use permits for projects of five+ single-family dwellings.
- A special use permit for the Courtyards of Homestead (63 single-family units) conditioned development on payment of an $803,250 fee-in-lieu payable in installments; certificates of occupancy depended on payment.
- Affiliates obtained the permit in October 2014; Epcon began acquiring the property in 2015, built and sold the 63 units, and paid fee installments beginning July 2017 with a final payment in March 2019.
- Epcon sued in North Carolina state court on October 24, 2019, seeking return of the fees and asserting §1983 claims for an unconstitutional exaction (Takings Clause) and substantive due process; the case was removed to federal court.
- The district court dismissed the federal §1983 claims as time-barred under North Carolina’s three-year limitation, holding accrual occurred when Epcon knew or should have known of the permit condition (by acquisition/permit issuance), and declined supplemental jurisdiction over state claims.
- The Fourth Circuit affirmed: the §1983 claims accrued when Epcon had reason to know of the injury (by 2015), and payments did not restart or toll the limitations period under the continuing-wrong doctrine.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did Epcon's §1983 claim accrue? | Accrual began when Epcon was compelled to pay the fees (payments starting 2017); injury occurred on payment. | Accrual occurred when Epcon knew or should have known of the permit condition (by issuance/acquisition in 2014–2015). | Accrual occurred when Epcon had reason to know of the injury (by 2015); suit filed in 2019 was untimely. |
| Do payments constitute a continuing wrong that tolls/restarts the limitations period? | Each fee payment was an unlawful exaction; Quality Built Homes shows claims accrue on each payment. | Payments were continuing ill effects of a single unconstitutional condition; continuing-wrong does not apply to restart accrual for §1983. | Continuing-wrong doctrine does not apply to Epcon’s §1983 claim; payments do not restart the federal accrual date. |
Key Cases Cited
- Wallace v. Kato, 549 U.S. 384 (2007) (accrual standard and that federal accrual is when plaintiff has a complete and present cause of action; recognizes possible common-law refinements)
- Bay Area Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of Cal., 522 U.S. 192 (1987) (accrual when plaintiff can file suit and obtain relief — "complete and present cause of action")
- Owens v. Baltimore City State's Attorney's Office, 767 F.3d 379 (4th Cir. 2014) (§1983 accrues when plaintiff knows or has reason to know of the injury)
- National Advertising Co. v. City of Raleigh, 947 F.2d 1158 (4th Cir. 1991) (takings claim accrued when ordinance enacted because it immediately interfered with property use)
- Tommy Davis Constr., Inc. v. Cape Fear Pub. Util. Auth., 807 F.3d 62 (4th Cir. 2015) (impact-fee due-process claim held to accrue when fees were paid under protest — cited by Epcon as contrasting authority)
- Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013) (unconstitutional-conditions doctrine: conditioning permits on surrender of property interests can implicate Takings Clause)
- Knick v. Township of Scott, 139 S. Ct. 2162 (2019) (a taking is complete at the time of the taking; property owners may seek just compensation in federal court without first pursuing state remedies)
- Pakdel v. City & County of San Francisco, 141 S. Ct. 2226 (2021) (takings claim is final when application of regulation to particular land is clear)
- Quality Built Homes, Inc. v. Town of Carthage, 813 S.E.2d 218 (N.C. 2018) (North Carolina applied the continuing-wrong doctrine to statutory exaction claims, holding injury occurs on payment)