909 F.3d 685
4th Cir.2018Background
- Pulte purchased 540 acres in Montgomery County, MD in 2004–2006 located in the Stage 4 receiving area under the 1994 Clarksburg Master Plan; density could be increased by purchasing TDRs (Pulte bought several hundred and recorded them).
- The 1994 Master Plan set prerequisites and reserved significant discretion to local authorities to approve Water and Sewer Plan amendments and to require Planning Board approvals; it also contemplated periodic updates.
- Pulte filed a Water and Sewer Category Change Request (2009, resubmitted 2012) and a Pre‑Application Concept Plan (2012); the County and Commission delayed action, reopened the Master Plan for study, and ultimately adopted an Amendment (2013–2014) plus overlay zoning that dramatically limited development on Pulte’s tract.
- The Amendment imposed a 6% impervious cap and 80% open‑space requirement on Pulte’s land (restricting development to ~17% of the acreage); other watershed parcels were treated differently.
- Pulte sued in state court asserting federal and state constitutional claims (due process, equal protection, takings, and Maryland Article 19); defendants removed to federal court and moved for judgment on the pleadings under Rule 12(c), which the district court granted.
- The Fourth Circuit affirmed, holding Pulte lacked a constitutionally protected property interest, the local actions had a rational basis, and the regulatory changes did not constitute a compensable taking under Penn Central factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Due process (procedural & substantive) — does Pulte have a protected property interest in development/sewer processing? | Pulte argues the Master Plan and its satisfaction of prerequisites gave it an entitlement to develop and to have its water/sewer request processed. | County/Commission argue the Master Plan reserved substantial discretion; no permit or construction had occurred and Maryland law does not create a constitutional right to sewer. | Held: No protected property interest; due process claims fail because the Master Plan left significant discretion to local authorities. |
| Equal protection — was Pulte arbitrarily singled out relative to similarly situated parcels? | Pulte contends it was targeted and treated differently without a rational basis. | Defendants say the Amendment and record articulate environmental distinctions (size, location, sensitive tributaries) providing rational basis. | Held: Rational‑basis review satisfied; defendants provided conceivable rational reasons and equal protection claim fails. |
| Takings — do the regulatory changes constitute a compensable regulatory taking? | Pulte contends the downzoning and restrictions effectively take the value of its investment (loss of planned ~1,000 units). | Defendants argue no total taking; Penn Central factors do not support a taking because Pulte retains substantial development (17%), had no reasonable investment‑backed expectations, and the regulation serves legitimate environmental purposes. | Held: No compensable taking under Penn Central; diminution in value alone insufficient and expectations were speculative. |
| Maryland Article 19 — did the County/Commission deny remedies or access to courts under state constitution? | Pulte asserts Article 19 protects its right to vesting/remedy and that delays prevented vesting and immunized defendants from suit. | Defendants argue Pulte had access to courts and actions were within the Master Plan discretion; Article 19 does not create a separate remedy where no property interest exists. | Held: Article 19 claim dismissed; Maryland law does not support a broader claim given the absence of a protected property interest and no denial of access to courts. |
Key Cases Cited
- Town of Castle Rock v. Gonzalez, 545 U.S. 748 (recognizing due process property‑interest principles)
- Siena Corp. v. Mayor & City Council of Rockville, 873 F.3d 456 (4th Cir. 2017) (zoning discretion defeats property‑interest claim)
- Sylvia Dev. Corp. v. Calvert County, 48 F.3d 810 (4th Cir. 1995) (transferable rights and expectations are unilateral unless committed by official discretion)
- Murr v. Wisconsin, 137 S. Ct. 1933 (2017) (Penn Central multifactor takings analysis reaffirmed)
- Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (establishing three‑factor takings framework)
- Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (clarifying takings versus due process analyses)
- Concrete Pipe & Prods. v. Constr. Laborers Pension Tr., 508 U.S. 602 (mere diminution in value insufficient for taking)
- Engquist v. Oregon Dep’t of Agric., 553 U.S. 591 (discretionary decisionmaking limits equal protection claims)
- Front Royal & Warren Cty. Indus. Park Corp. v. Town of Front Royal, 135 F.3d 275 (4th Cir.) (no takings or property interest for sewer expectation)
- Quinn v. Bd. of Cty. Comm’rs, 862 F.3d 433 (4th Cir.) (property interest and takings principles in zoning/sewer contexts)