631 F.3d 421 (7th Cir. 2011), 10-1359, Bettendorf v. St. Croix County

Docket Nº:10-1359.
Citation:631 F.3d 421
Opinion Judge:BAUER, Circuit Judge.
Party Name:John BETTENDORF, Plaintiff-Appellant, v. ST. CROIX COUNTY and Wisconsin Municipal Mutual Insurance Company, Defendants-Appellees.
Attorney:Matthew A. Biegert, Michael J. Brose (argued), Attorneys, Doar, Drill & Skow, New Richmond, WI, for Plaintiff-Appellant. Amy J. Doyle (argued), Attorney, Crivello, Carlson, Mentkowski & Steeves, Milwaukee, WI, for Defendants-Appellees.
Judge Panel:Before BAUER, FLAUM and HAMILTON, Circuit Judges. HAMILTON, Circuit Judge, concurring in part and dissenting in part.
Case Date:January 20, 2011
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 421

631 F.3d 421 (7th Cir. 2011)

John BETTENDORF, Plaintiff-Appellant,

v.

ST. CROIX COUNTY and Wisconsin Municipal Mutual Insurance Company, Defendants-Appellees.

No. 10-1359.

United States Court of Appeals, Seventh Circuit.

January 20, 2011

Argued Sept. 14, 2010.

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[Copyrighted Material Omitted]

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Matthew A. Biegert, Michael J. Brose (argued), Attorneys, Doar, Drill & Skow, New Richmond, WI, for Plaintiff-Appellant.

Amy J. Doyle (argued), Attorney, Crivello, Carlson, Mentkowski & Steeves, Milwaukee, WI, for Defendants-Appellees.

Before BAUER, FLAUM and HAMILTON, Circuit Judges.

BAUER, Circuit Judge.

This case arises from a dispute between John Bettendorf and St. Croix County over the zoning of Bettendorf's property. Pursuant to an ordinance enacted by the County in 1985, a portion of Bettendorf's land was re-zoned from agricultural-residential to commercial. The ordinance contained a condition that the parcel would revert to agricultural-residential upon the death of Bettendorf or by Bettendorf's transfer of the parcel to a new owner.

In 2004, Bettendorf filed an action in the Circuit Court for St. Croix County seeking a declaratory judgment that the conditional language was void and should be stricken from the ordinance. The circuit court found in favor of Bettendorf; on appeal, the Wisconsin Court of Appeals held the ordinance void in its entirety. In July 2007, the circuit court entered a revised judgment and order rescinding the commercial zoning of the disputed parcel in accordance with the Court of Appeals' decision. The County complied with the order and rescinded the commercial permit. The case comes to us from the Western District of Wisconsin; Bettendorf is alleging constitutional rights violations in connection with the County's rescinding the commercial zoning designation. After reviewing the district court's grant of summary

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judgment in favor of the County de novo, we affirm for the reasons set forth below.

I. BACKGROUND

John Bettendorf owns property located in St. Croix County, a municipal entity and local government under Wisconsin law. When Bettendorf acquired the property, it was zoned agricultural-residential. In 1972, he began to operate a carpet sales and installation business out of his basement. By 1974, he was also operating an excavating company and a trucking company on the property.

In December 1984, Bettendorf applied to the St. Croix County Planning, Zoning, and Parks Committee to re-zone a portion of his property to commercial so that he could operate a trucking terminal there. The committee approved the request on condition that the commercial re-zoning was only for Bettendorf's use and was not transferable. The committee's recommendation to grant a limited permit for Bettendorf to use the property for commercial activity was adopted and embodied in St. Croix County Ordinance No. 108(85) (1985). Bettendorf used the property in a commercial manner after the ordinance was enacted but his counsel at oral argument stated that he has discontinued such use since the ordinance was invalidated.

II. DISCUSSION

Bettendorf argues that the County's removal of the commercial zoning designation following the Court of Appeals' decision to invalidate the 1985 ordinance constitutes a taking. He also contends that the state court proceedings and resulting decision by the County to revoke the ordinance it had granted in 1985 did not provide adequate substantive and procedural due process protections. We disagree.

A. State Law Takings Claim

It is well-settled that to establish a regulatory taking for which just compensation is required under the Fifth Amendment and under Wisconsin law, the challenged government action must deprive a landowner of " all or substantially all practical uses of the property." Eternalist Foundation, Inc. v. City of Platteville, 225 Wis.2d 759, 773, 593 N.W.2d 84 (1999).1 " All or substantially all" sets a high bar for a plaintiff to recover on a takings claim. A regulatory or " constructive" taking will only be found where a government regulation has " rendered the property practically useless for all reasonable purposes." Zealy, 194 Wis.2d at 708, 534 N.W.2d 917. The factors to be considered in determining whether a constructive taking has occurred include: (1) the nature of the government regulatory scheme, (2) the severity of the economic impact on the challenging landowner, and (3) the degree of interference with the landowner's anticipated and distinct investment opportunities.

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Concrete Pipe and Prods., Inc. v. Construction Laborers Pension Trust, 508 U.S. 602, 644-46, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993); Zealy, 194 Wis.2d at 710, 534 N.W.2d 917. Bettendorf urges us to reverse the district court because it did not adequately consider the third factor. We believe it did.

The Takings Clause presupposes government interference with one's property rights in pursuit of a public purpose. Lingle v. Chevron, 544 U.S. 528, 543, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005). As Judge Crabb noted in her opinion, Bettendorf freely agreed to the conditional zoning provision. Any improvements Bettendorf made to his property were completed with full knowledge that the commercial designation would ultimately be lost. Bettendorf knew the conditional language of the ordinance restricted his ability to recoup the value of his commercial investments when he was ready to sell and therefore petitioned the County to make the re-zoning permanent. When the County refused, it was Bettendorf who initiated litigation in order for the circuit court to construe the limits of the ordinance. While he hoped the litigation would result in a decision giving him greater freedom than the ordinance afforded him, the result instead limited the freedom he had previously enjoyed. That was a risk he assumed in asking the court to interpret the scope and validity of the ordinance, not a government interference with his investment opportunities.2

In concluding our discussion of the takings claim, we note that while Bettendorf did suffer as a result of losing the commercial designation to which he had grown accustomed, he retains full use of his property for agricultural and residential purposes. The County's action does not render the property " practically useless," as the takings jurisprudence requires. Rather, it restores the land to its intended use at the time Bettendorf acquired it. Finding no government intrusion and no deprivation of all or substantially all practical use of Bettendorf's property, we cannot find a compensable taking.

B. Due Process Claims

We now turn to Bettendorf's argument that substantive and procedural deficiencies violated his constitutional right to due process.

Specifically, Bettendorf claims he was " denied the protection of the substantive legal standards that would have been applied to a change in zoning, as well as deprived of his right to a public hearing and consideration by the appropriate municipal decision makers." He contends the County deprived him of this right by failing to grant a petition for a complete re-zoning of his property when the validity of the commercial designation and its conditional language came into dispute. In support

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of this argument, Bettendorf directs the Court to Chapter 17 of the St. Croix County Code of Ordinances for Land Use and Development. Under Section 17.70(6)(a) of the Code, appeals of administrative zoning decisions may be brought by persons aggrieved by those decisions or by representatives of the County, so long as the appeal is made within a reasonable time. If the County were to revoke the commercial zoning permit it previously granted Bettendorf, as it did in this case, he argues the appropriate mechanism should have been the process outlined in the St. Croix County Code rather than the state court litigation that ultimately decided the matter.

Bettendorf correctly states that the Fourteenth Amendment protects against state action that deprives a person of property without due process of law and that such protection extends to action taken by municipalities such as St. Croix County. However, as the Court of Appeals of Wisconsin has noted, " A plaintiff who wishes to pursue a claim for an alleged violation of the right to substantive due process embarks on a difficult undertaking, especially if the claim involves zoning or other real property regulatory actions by a governmental body." Eternalist, 225 Wis.2d at 775, 593 N.W.2d 84.

At the outset, we note Judge Crabb's observation in the district court opinion that " it is not easy to make out what federal claims [Bettendorf] is raising." In his brief before this Court, Bettendorf conflates substantive and procedural due process, stating that the facts and the law supporting both claims are " largely indistinguishable." We disagree with this characterization. Substantive due process is implicated in cases like the one before us only when " a municipal body's adverse decision in a zoning matter ... is arbitrary, oppressive, or unreasonable." Id. at 776, 593 N.W.2d 84. In contrast, procedural due process focuses on the " form of the procedures that the government must afford an individual" given the " particularities of the situation." Doe v. Heck, 327 F.3d 492, 526 (7th Cir.2003), citing Doyle v. Camelot Care Centers, Inc., 305 F.3d 603, 618 (7th Cir.2002). While the former relates to the propriety of the decision itself, the latter is concerned with the manner in which a decision is made. As this Court has said repeatedly, the two are not to be confused. Tun v. Whitticker, 398 F.3d 899, 902 (7th Cir.2005); Dunn v. Fairfield Community High School, District No. 225, 158 F.3d 962...

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