VR Acquisitions, LLC v. Wasatch County
2017 U.S. App. LEXIS 6116
| 10th Cir. | 2017Background
- VRA Acquisitions, LLC purchased a 6,700-acre Utah property (the VR property) in 2012; a JSSD assessment lien of about $17.5 million was recorded against the property in 2009.
- JSSD adopted a Notice of Intention (2005), a Creation Ordinance (2006), and an Assessment Ordinance (2009) to finance sewer/water improvements and levy assessments against property in the District.
- VRA sued in 2015 under 42 U.S.C. § 1983 (procedural due process, substantive due process, and takings claims) and asserted five state-law claims, alleging the Notice was false/misleading, bond funds were misused, and officials self-dealt.
- The district court dismissed all claims with prejudice under Rule 12(b)(6), finding time bars, lack of standing, and adequacy of statutory notice. VRA appealed.
- The Tenth Circuit affirmed dismissal of VRA’s federal § 1983 claims for lack of prudential standing but reversed the dismissal (with prejudice) of the state-law claims, directing they be dismissed without prejudice for lack of supplemental jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does VRA have prudential standing to bring § 1983 claims challenging pre‑purchase legislative actions and the Assessment Lien? | VRA: As current owner, it suffers direct injury from liens and risk of foreclosure, so it may vindicate its rights. | Defs: Any constitutional injuries arose to the prior owner; VRA impermissibly asserts third‑party rights. | Court: VRA lacks prudential standing; federal claims dismissed with prejudice. |
| Are VRA’s federal claims time‑barred under Utah limitation statutes (e.g., contest period and 4‑yr SOL)? | VRA: Challenges based on ongoing burden and enforcement; argues standing/timeliness should be considered differently. | Defs: Claims ripened in 2009 and are barred by Utah statutory limits. | Court: District court relied on time bars among other grounds, but Tenth Circuit affirmed dismissal on prudential standing without resolving Article III or all statute‑of‑limitations rulings. |
| Can VRA maintain a Takings Clause claim as successor owner when taking/ripening occurred before it acquired title? | VRA: Annual assessment demands amount to an ongoing taking affecting current owner. | Defs: The taking (if any) ripened in 2009; rights to challenge belong to the owner at the time of the taking. | Court: Palazzolo controls—takings claim ripened in 2009; VRA, a later purchaser, lacks the proper standing to assert an overripe taking. |
| Should the district court retain supplemental jurisdiction over VRA’s state‑law claims after dismissing federal claims? | VRA: Sought to keep state claims in federal court. | Defs: Federal claims dismissed; district court should decline supplemental jurisdiction. | Court: Declined supplemental jurisdiction; reversed dismissal with prejudice and remanded to dismiss state claims without prejudice. |
Key Cases Cited
- Kemmerer Coal Co. v. Brigham Young Univ., 723 F.2d 54 (10th Cir. 1983) (successor purchaser cannot assert grantor’s due‑process rights; prudential‑standing bar to third‑party constitutional claims)
- Commonwealth Prop. Advocates v. Mortgage Elec. Registration Sys., 680 F.3d 1194 (10th Cir. 2011) (current owner has prudential standing to challenge foreclosure that would directly injure purchaser)
- Palazzolo v. Rhode Island, 533 U.S. 606 (2001) (takings claims belong to owner at time of taking unless claim ripens during a regulatory ripening period)
- Pater v. City of Casper, 646 F.3d 1290 (10th Cir. 2011) (assessment notices can deprive property interests where plaintiffs owned property when notices were recorded)