W.J.F. Realty Corp. v. Town of SouthamptonW.J.F. Realty Corp. v. Town of Southampton
MEMORANDUM AND ORDER
Before this Court is Defendants’ motion to amend their Answer pursuant to Rule 15(a) of the Federal Rules of Civil Procedure and to dismiss Plaintiffs’ Complaint pursuant to Rule 12(c) of the Federal Rules of Civil Procedure.
In this action, Plaintiffs assert claims for the alleged taking of their private property for public use without just compensation in violation of the Fifth and Fourteenth Amendments of the United States Constitution. Plaintiffs previously litigated these issues in the New York State court system against these same Defendants and also against the State of New York, unsuccessfully in both instances. At the State level, Plaintiffs purported to litigate only their New York State taking claims and also to reserve their right to litigate federal Fifth Amendment taking claims in a federal forum under the combined authority of
Williamson County Reg'l Planning Comm’n v. Hamilton Bank of Johnson City,
Defendants argue that Plaintiffs’ attempt to reserve their federal claims for a federal forum was nugatory and that they are prohibited from taking this “third bite at the proverbial apple.”
*142 For the following reasons, this Court disagrees with Defendants and will allow Plaintiffs to proceed with their federal taking claims here.
BACKGROUND
1. Plaintiffs’ Land And The Alleged Wrongful Acts Bg Defendants
Since 1969, Plaintiffs have owned 272.5 acres of real property in the Town of Southampton (the “Subject Property”). (E.D.N.Y.Compl.lH! 10-13.) The Subject Property is located in a zoning district that was designated for “light industrial uses.” (E.D.N.Y.ComplH 11.)
In 1985, Plaintiffs applied for a minor subdivision of the Subject Property. (E.D.N.Y.Compl.1H 15-16.)
The Town allegedly placed an “administrative hold” on Plaintiffs’ subdivision application for more than two (2) years, beginning March 5, 1987. (E.D.N.Y.Compl.lH 24, 38-47.) 2 Then, commencing on or about March 28, 1989, a series of legislative moratoria on approval of land-use applications were allegedly adopted by the Town while various Generic Environmental Impact Statements were being prepared (the “GEIS Study”). (E.D.N.Y.Compl.lH 24, 48-72.)
In March 1993, Plaintiffs commenced two lawsuits in New York State — one against these same Defendants and one against the State of New York. 3
In April 1993, Plaintiffs applied for an exemption from the GEIS moratoria, and Defendants deniеd the same in December 1993. (E.D.N.Y.Compl.lH 73-78.)
The final GEIS moratoria terminated in June 1995, by which time the Town had opted into a plan prepared by the Central Pine Barrens Joint Planning and Policy Commission pursuant to the New York State Long Island Pine Barrens Protection Act of 1993 (the “Pine - Barrens Act”), which allegedly imposed a permanent development moratorium on the Subject Property. (E.D.N.Y.Compl.1H 79-81.)
Accordingly, Plaintiffs contend that the administrative hold and successive GEIS moratoria froze their subdivision application for ovеr eight (8) years, until which time subdivision and development of the Subject Property were permanently prohibited. (E.D.N.Y.ComplH 81.)
II. Actions In State Court
In March 1993, Plaintiffs sued these same Defendants in the Supreme Court of the State of New York, County of Suffolk. In August 1994, Plaintiffs filed a Second Amended Verified Complaint (the “Second Amended Complaint”), asserting the following causes of action: (1) declaratory judgment that the moratoria and subsequently adopted local laws were unconstitutional, ultra vires and void; (2) inverse condemnation; (3) confiscation of property; (4) de facto appropriation; (5) regulatory taking without just compensation in violation of Article I, Section 7(a) of the New York Constitution; (6) temporary, regulatory taking without just compensation in violation of Article I, Section 7(a) of the New York Constitution; (7) procedural due process under the Fourteenth Amendment of the United States Constitution; (8) substantive due process under the Fourteenth Amendment of the United States Constitution and the New York Constitution; (9) equal protection under the Fourteenth Amendment of thе United States Constitution and the New York Constitution; (10) injunction against GEIS *143 Study restrictions as applied to the Subject Property; and (11) damages pursuant to 42 U.S.C. § 1983.
In this Second Amended Complaint, Plaintiffs stated that: “The scope of this action is limited in that the plaintiffs are asserting no federal claim whatever under the Fifth Amendment of the United States Constitution for the taking of property and just compensation and are expressly limiting their claims in that regard to violations of the New York State Constitution [and][p]ursuant to [England], plaintiffs expressly reserve the right to litigate all federal Fifth Amendment taking claims in a federal forum under the authority of [Williamson].’’ (State Sec. Am. Compl. ¶ 2.)
Plaintiffs moved for summary judgment in their favor on the first through sixth causes of action and Defendants cross-moved for summary judgment.
By decision dated August 23, 1995, the State Supreme Court (J. Harry E. Seidell) denied Plaintiffs’ motion for summary judgment and partially granted Defendants’ cross-motion “to the limited extent that the complaint is dismissed except as to plaintiffs’ claims of due process and equal protection violations under the Federal and New York State Constitutions and as to the issue of damages asserted under the seventh through ninth, eleventh and twelfth causes of action asserted in the second amended complaint.” (Order of 8/23/95 at 9.)
In this opinion, Justice Seidell recognized Plaintiffs’ reservation of their Federal taking claims, specifically writing that “Plaintiffs do not assert any Federal claim under the Fifth Amendment of the Federal Constitution for the taking of property and just compensation, but limit their claims in that regard to violations of the New York State Constitution.” (Order of 8/23/95 at 4 n. 2.)
Justice Seidell cited New York law on zoning regulations, namely that “[i]t is well settled that zoning regulations are afforded a strong presumption of constitutionality and the burden is on the party challenging such a regulation to prove its unconstitutionality beyond a reasonable doubt.” (Order of 8/23/95 at 4.)
In his opinion as to the New York taking claims, Justice Seidell determined that there was no physical taking; there was no regulatory taking given that “Plaintiffs have failed to demonstrate that the challenged restriction, in fact, deprived them of absolutely any economically beneficial use of their property [and also] failed to demonstrate that the limitations imposed by the moratorium did not substantially advance legitimate state interests”; and finally that there was no temporary taking. (Order of 8/23/95 at 5-7.)
On November 6, 1995, Justice Seidell amended his August 23, 1995 decision by granting partial summary judgment to Plaintiffs as to that part of the first cause of action that sought a declaration that the moratoria were excessive and unconstitutionally void as tо duration, but otherwise affirmed his decision. (Order of 11/6/95 at 2.)
A trial on the remaining causes of action commenced in December 1996. Before a decision was issued, on June 23, 1997, the Appellate Division, Second Department, reversed the grant of partial summary judgment to Plaintiffs on the first cause of action, dismissed the first cause of action as academic and also deemed Plaintiffs’ appeal as withdrawn pursuant to a letter dated January 15, 1997.
W.J.F. Realty Corp. v. Town of Southampton,
There was a thirty-three (33) day, non-jury trial on the remaining causes оf action (namely, the seventh through ninth and eleventh). By memorandum dated De *144 cember 5, 1997, Justice Seidell dismissed the procedural and substantive due process causes of action but found that Plaintiffs proved a violation of equal protection due to the denial of their exemption application. (Order of 12/5/97 at 10-11.) Judgment was entered on January 23, 1998.
Defendants filed a Notice of Appeal from the Judgment and Plaintiffs filed a Cross Notice of Appeal. By decision dated May 24, 1999, the Appellate Division, Sеcond Department, found that “the Supreme Court erred in finding that the plaintiffs were denied equal protection of the law.”
W.J.F. Realty Corp. v. Town of Southampton,
Plaintiffs had also filed a lawsuit against the State of New York in the New York Suрreme Court, Suffolk County, in which Plaintiffs again purported to reserve then-right to litigate their Federal taking claims in Federal court. Justice Underwood ruled against Plaintiffs; the Appellate Division, Second Department, affirmed; and the Court of Appeals dismissed the appeal and denied Plaintiffs’ motion for leave to appeal.
W.J.F. Realty Corp. v. State of New York,
III. Action In The Eastern District Of New York
In October 2000, Plaintiffs filed a Complaint in the instant action (the “E.D.N.Y. Complaint”). Plaintiffs allege that the “government, through a so-called administrative ‘hold’ and a series of moratoria extеnding over several years, actively thwarted the final approval of a subdivision application for a large parcel of industrially-zoned property adjacent to the Suffolk County Airport because government believed and hoped that public funds were or would become available to purchase the property, and government, in anticipation and in aid of such acquisition, wished to maintain the property in its natural, un-subdivided, undeveloped, and thus, least-valuable state.” (E.D.N.Y.ComplY 1.) Plaintiffs contend that Defendants’ actions constituted a temporary and/or permanent taking of their private property for public use without just compensation, in violation of the Fifth Amendment of the United States Constitution as applied to States via the Fourteenth Amendment of the United States Constitution. 4 (E.D.N.Y.Compl.fl 1.)
In the E.D.N.Y. Complaint, Plaintiffs note that: “The scope of this action is limited, in that Plaintiffs have previously litigated claims under the New York State Constitution, as well as Federal claims based upon the equal protection and due process clauses of the United States Con *145 stitution, in an action brought in the Supreme Court of the State of New York, Suffolk County, entitled W.J.F. Realty Corp. v. Town of Southampton.” (E.D.N.Y.ComplY 2.)
Defendants filed an Answer on November 30, 2000, raising several affirmative defenses including res judicata.
DISCUSSION
I. Motion To Amend Answer
Defendants move this Court to amend their Answer pursuant to Rule 15(a) of the Federal Rules of Civil Procedure to add (1) factual allegations regarding Plaintiffs’ lawsuit against the State of New York; and (2) collateral estoppel, Full Faith and Credit, and the Rooker-Feldman doctrine to the affirmative defense of res judicata.
Undеr Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires.”
Garvin v. United States,
00-CV-2810,
Defendants’ motion to amend their Answer is granted and this Court will decide the concurrent Rule 12(с) motion to dismiss accordingly.
II. Motion To Dismiss Complaint
Defendants also move this Court to dismiss Plaintiffs’ Complaint pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, arguing that Plaintiffs lost their two taking lawsuits in State court and that the intertwined doctrines of res judicata, collateral estoppel, Full Faith and Credit and the Rooker-Feldman doctrine require that Plaintiffs’ “third bite at the proverbial apple” not be allowed.
Plaintiffs argue that, as per Williamson, their Federal taking claim did not ripen unless and until they sought relief in the State court system and thus preclusion is not a bar here. Furthеr, in the State court actions, Plaintiffs raised their taking claims only under the New York State Constitution and attempted to reserve their right to bring their federal claims in a federal forum under the combined authority of England and Williamson.
a. FRCP 12(c) Standard
The standard for motions brought pursuant to Rule 12(c) of the Federal Rules of Civil Procedure is the same as that applied to Rule 12(b)(6) motions.
Patel v. Contemporary Classics of Beverly Hills,
b. Full Faith and Credit Clause
“It is now settled that a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.”
Migra v. Warren City School Dist. Bd. of Educ.,
c. Res Judicata/Claims Preclusion
Res judicata bars future litigation of claims that were brought or could have been brought in a prior proceeding that resulted in a final judgment on the merits. Yoon v. Fordham Univ. Faculty and Admin. Ret. Plan, 263 F.3d 196, 200 (2d Cir.2001). Here, Defendants contend that Plaintiffs’ federal taking claims could have been brought during the State proceedings and that said claims were indeed litigated.
Here, this Court is faced with the interesting and oft analyzed interplay of Williamson and England.
In
Williamson,
the Supreme Court stated that a landowner may not claim a violatiоn of the Fifth Amendment until the landowner has unsuccessfully attempted to obtain just compensation through the procedures provided for by the State.
Williamson and its progeny place Plaintiffs in a precarious situation. Plaintiffs must seek redress from the State court before their federal taking claims ripen, and failure to do so will result in dismissal by the federal court. However, once having gone through the State court system, plaintiffs who then try to have their federal claims adjudicated in a federal forum face, in many cases, potential preclusion defenses. This appears to preclude completely litigants such as those in the case at bar from bringing federal taking claims in a federal forum, providing a federal forum only by way of the United States Supreme Court review of a State court judgment.
Some taking litigants have attempted unsuccessfully to assert an
England
reservation whereby they litigate their State claims in a State forum (as required by
Williamson)
and expressly reserve their right to litigate their federal claims in a federal forum but have found themselves precluded; where other litigants have done so with success. In
England,
a non-taking case, the Supreme Court held that when a federal court abstains and the litigant is sent to State court, the litigant can “inform the state courts that he is exposing his federal claims there only [because of the abstention], and that he intends, should the state courts hold against him on the question of state law, to return to the [federal] District Court for disposition of his federal contentions.”
Some courts have suggested that
Eng
land-type reservations should be made available to taking litigants compelled by
Williamson
to proceed in the State court, and further sоme courts have suggested that res judicata should not preclude litigants from adjudicating federal claims raised in the subsequent federal proceeding.
See, e.g., Greenspring Racquet Club, Inc. v. Baltimore County,
No. 99-2444, No. 00-1012,
Defendants contend that
Hickerson v. City of New York
mandates that this Court refuse to entertain Plaintiffs’ federal claims asserted here.
In the instant case, plaintiffs did not invoke the jurisdiction of the federal court in the first instance, only to have the court invoke Pullman abstention. Instead, they filed suit in state court, which they believed would look upon their free-speech claims more favorably. Moreover, after defendants removed the case to federal court, plaintiffs moved to remand the case in its entirety (including their First Amendment claim) to state court, arguing that the case was not properly removable and also vigorously urging that their state constitutional claims “predominated,” while their First Amendment claim was a mere “adjunct” or “supplement.” The district court, in response to plaintiffs’ motion, abstained under Pullman and remitted the state claims to state court, but denied plaintiffs’ request to remand the federal constitutional claims and instead stayed these claims pending the outcome of the state litigаtion.... *148 Only then did plaintiffs file an England reservation.
Under these circumstances, plaintiffs cannot meaningfully be said to have been deprived of a federal forum for their federal claims “without [their] consent and through no .fault of [their] oum.” England,375 U.S. at 415 [,84 S.Ct. 461 ]. If defendants had not sought to avail themselves of a federal forum after plaintiffs filed suit in state court, plaintiffs would have been held to their choice of forum and would have been required to submit their First Amendment claim to the New York state courts. The same would have been true if plaintiffs had been successful in moving to remand the еntire case to state court. Alternatively, if plaintiffs’ priority had been to obtain a federal forum for their First Amendment claim, they could have filed suit in federal court initially. Cf. Migra,465 U.S. at 84-85 & n. 7[,104 S.Ct. 892 ], In light of England’s emphasis on the need to preserve access to a federal forum for those litigants who have chosen it, and in light of the suggestive characterizations of England by the Supreme Court in the later cases of Allen v. McCurry and Migra, we agree with those courts that have held that England applies only to litigants who have sought to proceed in federal court in the first instance, and not to litigants such as the instant plaintiffs who voluntarily chose to file suit in state court.
As indicated, the facts in the Hickerson case are completely different and distinguishable from those in the case at bar.
Further and very importantly, New York Supreme Court Justice Seidell recognizеd and honored Plaintiffs’ England-type reservation, expressly noting in his decision that “Plaintiffs do not assert any Federal claim under the Fifth Amendment of the Federal Constitution for the taking of property and just compensation, but limit their claims in that regard to violations of the New York State Constitution.” (Order of 8/23/95 at 4 n. 2.)
Finally and also very importantly, Defendants failed to object to Plaintiffs’ reservation at the time it was asserted. Defendants should not now, close to a decade later, be permitted to question the validity of said reservatiоn. 5
For these reasons, this Court finds that res judicata is not a bar to Plaintiffs’ federal taking claims asserted here.
d. Collateral Estoppel/Issue Preclusion
Having found that res judicata does not bar the assertion of federal taking claims here does not end this Court’s pre-
*149
elusion analysis. Collateral estoppel bars the re-litigation of issues of fact or law between the same parties when those issues have been actually litigated and determined by a prior, valid final judgment.
See
RESTATEMENT (SECOND) OF JUDGMENTS § 27. Collateral estoppel will apply if: “(1) the issue in question was actually and necessarily decided in a prior proceeding, and (2) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the first proceeding.”
Phifer v. City of New York,
This Court does not find the application of collateral estoppel appropriate here given, in part, because talking claims under federal and New York law carry different burdens of proof.
See, e.g.,
RESTATEMENT (SECOND) OF JUDGMENTS § 28(4) (stating exception to general rule of issue preclusion when “[t]he party against whom preclusion is sought had а significantly heavier burden of persuasion with respect to the issue in the initial action than in the subsequent action ... ”). New York requires civil regulatory taking claimants to establish elements of their claims by the highest burden of proof— namely, beyond a reasonable doubt.
See, e.g., Briarcliff Assocs., Inc. v. Town of Cortlandt,
Indeed, in his August 23, 1995 opinion granting summary judgment against Plaintiffs, Justice Seidell reiterated that the burden of proof in declaring a zoning regulation unconstitutional was “beyond a reasonable doubt.” (Order of 8/23/95 at 4.) Further, Justice Seidell expressly recognized that he was making his determination based upon New York State taking law and that Plaintiffs were not asserting any claims under the Fifth Amendment of the United States Constitution. (Order of 8/23/95 at 4 n. 2.)
Furthermore, Justice Seidell’s opinion contains no analysis under federal taking law articulated in
Penn Cent. Transp. Co. v. New York City,
Thus, this Court concludes that collateral estoppel is not a bar here.
e. Rooker-Feldman
“The
Rooker-Feldman
doctrine holds that inferior federal courts lack subject matter jurisdiction over eases that effectively seek review of judgments of state courts and that federal review, if any, can occur only by way of a certiorari petition to the Supreme Court.”
Phifer,
Defendants argue that the Rooker-Feld-man doctrine is a bar here given the decisions rendered by the State courts. However, the State courts did not consider Plaintiffs’ federal taking claims, the State courts honored Plaintiffs’ England reservation, Justice Seidell expressly stated that Plaintiffs only brought claims under New York law and finally New York and federal law carry with them different burdens of proof. For these reasons, this Court concludes that the Rooker-Feldman doctrine is inapplicable here.
CONCLUSION
Aсcordingly, for the foregoing reasons, Defendants’ motion to amend their Answer must be and the same is hereby GRANTED; and Defendants’ motion to dismiss the E.D.N.Y. Complaint must be and the same is hereby DENIED.
SO ORDERED.
Notes
. Hereinafter referred to as England and Williamson.
. Plaintiffs allege that Defendants postponed granting the subdivision because Defendants themselves wanted to acquire the Subject Property, and accordingly were buying time to raise the funds to do so. (E.D.N.Y.Compl.1111 31-37.)
. These State lawsuits are detailed below.
. Plaintiffs assert the following causes of action: (1) temporary taking resulting from improper administrative hold; (2) temporary taking resulting from GEIS I Morаtorium; (3) temporary taking resulting from GEIS II Moratorium; (4) temporary taking resulting from GEIS III Moratorium; (5) temporary and permanent taking resulting from Defendants' combined actions and regulations; (6) damages under 42 U.S.C. § 1983.
. Moreover, it defies logic and common sense to say that all federal Constitutional issues (save taking ones) which are coupled with significant State court questions which are not automatically precluded as unripe, may be preserved by a reservation for a return visit to a federal court, but so-coupled federal taking claims may not because they (unlike the others) are precluded from being brought in the first instance in a federal court. The reason for this court-made distinction in this case escapes us. It just makes no sense. The Court of Appeals for this Circuit, with remarkable consistency, has pursued a policy of not honoring District Courts' attempts to abstain with
England-type
reservations from deciding cases with mixed federal and State issues.
See, e.g., Dittmer v. County of Suffolk,