Decided: July 25, 2013
The Fourth Circuit held that the Town of Nags Head, North Carolina (“the town”) did not violate the due process or equal protection rights of the owners of six beachfront cottages (“the owners”) by deeming the cottages public nuisances and imposing fines on the owners, and that the owners’ takings claim was ripe for review. The Fourth Circuit therefore affirmed the ruling of the United States District Court for the Eastern District of North Carolina in part, reversed the ruling in part, and remanded the case back to the district court.
On November 12, 2009, a major storm damaged the owners’ cottages. The town declared the cottages to be public nuisances under its nuisance ordinance on November 30, and informed the owners that, if they did not abate the nuisance within eighteen days, the town would impose civil fines. The owners did not take the actions required to abate the nuisance, and the town began imposing fines in late January 2010. The owners did not pay the fines. In May 2010, the owners sued the town in state court. The town removed the case to the federal district court; after removal, the owners filed an amended complaint asserting, inter alia, violation of their due process and equal protection rights, as well as a takings claim under the Fifth Amendment. The district court granted the town summary judgment on the owners’ due process and equal protection claims, and declared the owners’ takings claim unripe for review under the state-litigation requirement of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172. On appeal to the Fourth Circuit, the owners asserted that the town violated their procedural due process rights by taking their money and depriving them of the use and enjoyment of their property without a pre-deprivation process; that the town violated their equal protection rights by deeming their cottages nuisances, but failing to declare fourteen other cottages in the town’s alleged public trust area as nuisances; and that the district court erroneously dismissed their takings claim.
The Fourth Circuit found that, while the owners asserted two constitutionally protected property interests, the government never actually deprived the owners of these interests: The owners never paid the fines, and their property rights did not include the ability to use the properties in a manner contrary to law. With regard to the equal protection claim, the Fourth Circuit concluded that the town had a rational basis for treating the owners’ properties differently than the fourteen other cottages, as the owners’ cottages were closer to the ocean than the other cottages. Lastly, the Fourth Circuit found the state-litigation requirement inapplicable. The Fourth Circuit noted that, under this requirement, plaintiffs must seek compensation through state procedures before a takings claim against the state or its subdivisions can be ripe in federal court. However, plaintiffs may bring a takings claim in state court without a prior denial of compensation by the state, as long as the takings claim accompanies a claim for just compensation under state law. In this case, the owners filed a takings claim alongside an inverse condemnation claim in state court; thus, allowing the town to invoke the state litigation requirement after removing the case to federal court would deny the owners a forum for their claim, constituting manipulation of the litigation. Furthermore, while the state-litigation requirement is based on the state courts’ experiential advantage in adjudicating cases involving zoning and land-use issues, the Fourth Circuit noted that federal courts can also handle these cases competently—and that the town implicitly agreed with this conclusion by removing the case to federal court.
– Stephen Sutherland