Anaheim Gardens v. U.S.
| Decision Date | 26 March 2006 |
| Docket Number | No. 01-5012.,No. 01-5011.,01-5011.,01-5012. |
| Citation | 444 F.3d 1309 |
| Parties | ANAHEIM GARDENS, B-L Associates, Cedar Gardens Associates, C-W Associates, Denise A. Kellenbeck (doing business as Victorian Arms Apartments), Earl W. Kellenbeck, Florin Meadows I, Ltd., Florin Meadows II, Ltd., Frances T. Ward, Glenview Gardens Limited Partnership, Hillview Townhouses Limited, Hillview Townhouses Limited No. 1, Indian Head Manor Limited Partnership I, J.D.V. Ward, James W.Y. Wong, Jewel Lake Villa II, Joseph Biafora and Stefi Biafora, Metro West Limited, Millwood Associates Limited Partnership, Napa Park Apartments Limited Partnership, Norman M. Kronick and Louis Dulien (doing business as Halawa View Apartments), Ontario Townhouses Limited Partnership, Peter H.Y. HSI and Priscilla L.F. HSI (doing business as General Partners of Waipahu Tower), Rock Creek Terrace Limited Partnership, Sierra Vista One, Silverlake Village, The Palomar Apartments, Thetford Properties III, Limited Partnership, Thetford Properties IV, Limited Partnership, Washington Plaza Partners, Ltd., 185-225 Parkhill Corp., 620 Su Casa Por Cortez, 825 San Tomas Apartments, 3740 Silverlake Village, and 5324 Foothill Apartments, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee. Alconquin Heights Associates, L.P., Brandy Hill Company, Brookside Manor Associates Limited Partnership, Buckman Gardens Limited Partnership, Chauncy House Company, Cromwell Court Company, Country Towne Apartments Partnership, Dolly Ann Apartments Limited Partnership, Emory Grove Limited Partnership, First Landmark Associates Limited Partnership, Forest Glen Limited Dividend Housing Association, Fort Heath Associates, Garrison Forest Associates, Glenarden Limited Partnership, Jodani Associates, L.P., Kimberly Associates, King's Grant Company, Leader House Associates and Leader Housing Co., Inc., New Amsterdam Associates and New Amsterdam Houses, Inc., Pine Crest Company, Riverside Village Company, Suburbia Associates Limited Partnership, Suehar Associates, L.P., Tower West Associates, L.P. and Tower West, Inc., and Town & Country Apartments and Townhouses, Plaintiffs-Appellants, v. United States, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Harry J. Kelly, Nixon Peabody LLP, of Washington, DC, argued for plaintiffs-appellants. Of counsel was Charles L. Edson.
David Harrington, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Brian M. Simkin, Assistant Director.
Before LOURIE, RADER, and LINN, Circuit Judges.
The United States Court of Federal Claims dismissed two regulatory takings cases, Anaheim Gardens v. United States, 93-655C (Anaheim); and Algonquin Heights v. United States, No. 97-582C (Algonquin). The trial court determined that these claims are not ripe for suit because the parties have not obtained a "final decision" from the U.S. Department of Housing and Urban Development (HUD). In light of Cienega Gardens v. United States, 265 F.3d 1237 (Fed.Cir.2001) (Cienega II), this court reverses and remands these cases for further findings of fact on whether appellants can demonstrate evidence of "administrative futility" that would exempt them from exhausting their administrative remedies.
These cases are intertwined with another takings case, Cienega Gardens v. United States, 33 Fed.Cl. 196 (1995) (original case) (Cienega Gardens).1 The Court of Federal Claims dismissed the Anaheim and Algonquin cases on the basis of its ruling in Cienega Gardens v. United States, 46 Fed.Cl. 506 (2000) (Cienega Remand). At that time, this court had not issued its Cienega II opinion. Instead, following the issuance of this court's opinion in Cienega Gardens (Cienega Gardens v. United States 194 F.3d 1231 (Fed.Cir. 1998) (Cienega I)),2 the Court of Federal Claims issued its revised second decision that is set out in Cienega Remand. In Cienega Remand, the Court of Federal Claims ruled on cross-motions for summary judgment, relying on Greenbrier v. United States, 193 F.3d 1348 (Fed.Cir. 1999), and concluded that the Cienega Gardens' plaintiffs' claims were not ripe.
Following issuance of its Cienega Remand opinion, the Court of Federal Claims turned its attention back to the Anaheim and Algonquin cases now before this court. On May 18, 2000, the Court of Federal Claims entered identical orders in both the Anaheim and Algonquin cases stating that it "intend[ed] to dismiss all related cases pursuant to [the Cienega Remand] decision." The Court of Federal Claims' May 18, 2000 order further directed the parties to "notify the court by June 1" if the facts of their cases could be "distinguished from those in the Cienega [Remand] case." If not distinguishable, the May 18, 2000 order stated: "[W]e will order the clerk to dismiss this case."
On August 16, 2000, relying upon its Cienega Remand opinion and Greenbrier, the Court of Federal Claims entered an order and Court of Federal Claims Rule 58 judgment dismissing all of the Anaheim and Algonquin claims. R. Ct. Fed.Cl. 58. In dismissing their claims, the Court of Federal Claims concluded that they could not satisfy the Greenbrier ripeness standards. In addition, this court notes that, though unclear from the order, the Court of Federal Claims seems to have sua sponte dismissed these cases under its continuing obligation to ensure it had continuing subject matter jurisdiction of its cases under Court of Federal Claims Rule 12(h)(3); or for failure to state a claim under Court of Federal Claims Rule 12(b)(6). Regardless, following the August 16, 2000 dismissal orders, the parties timely appealed both cases to this court.
Upon appeal to this court, the parties again agreed to stay their appellate proceedings in anticipation of this court's ruling on the Cienega Gardens case (following the Cienega Remand opinion). This second appeal in Cienega Gardens also featured the issue of ripeness. The parties agreed that this court's ruling on ripeness in the second Cienega Gardens appeal would apply to their dismissed regulatory takings claims.
On September 18, 2001, this court issued its second opinion in Cienega Gardens, which reversed the Court of Federal Claims' decision and found the takings claims ripe for adjudication. Cienega II, 265 F.3d at 1248. Nevertheless, after remand, Cienega Gardens was, for the third time, appealed to this court on the issue of, inter alia, whether the Cienega Gardens plaintiffs had vested property rights that could be violated by an uncompensated taking. Therefore, after the filing of a second unopposed motion to stay the appellate proceedings herein, on May 3, 2002, this court entered a second order staying the proceedings pending outcome of the third Cienega Gardens appeal.
In the third Cienega Gardens appeal, this court ruled that all of the Cienega Gardens plaintiffs "had vested property interests under the Fifth Amendment in their contractual and regulatory rights to post-twentieth-year prepayment[,] and under real property law[,] to repossess." Cienega Gardens v. United States, 331 F.3d 1319, 1353 (Fed.Cir.2003) (Cienega III). In addition, on four of the Cienega Gardens' plaintiffs' claims (the Model Plaintiffs), for whom a factual record had been developed and presented to the court, this court ruled that they had vested property interests that became a compensable, temporary, regulatory taking because a government regulation conflicted with their investment-backed expectations in a twenty-year prepayment plan. Id. at 1353. However, this court remanded the remaining Cienega Gardens' plaintiffs' claims for further development of the facts on liability and damages. Id. at 1354. As a result, this court now applies the Cienega II and Cienega III holdings to the Court of Federal Claims' dismissal of both appellants' entire cases.
Under the National Housing Act of 1954, as amended in the 1960s, Housing Act of 1961, Pub. L. 87-70, 75 Stat. 149 (1961), appellants agreed to construct and maintain housing for low-income renters in exchange for HUD's provision of mortgage insurance and interest subsidies. National Housing Act of 1954, Pub. L. 560, § 221(a), 68 Stat. 599 (1954); Conf. Report, H. Rep. No. 2271, 83rd Cong., 2d Sess. 70 (1954) () (the Act). Before the modifications to the Act in the mid-1980s, investors could pay off their mortgages and convert to market-rate housing after twenty years, without seeking permission from HUD to pay off their mortgages. However, in the mid-1980s, faced with the loss of much low-income housing due to investors leaving the program, Congress passed two new laws: (1) the Emergency Low-Income Housing Preservation Act of 1987, Pub. L. No. 100-242, tit. II, 101 Stat. 1877 (1988) () (ELIHPA); and (2) the Low-Income Housing Preservation and Resident Homeownership Act of 1990, Pub. L. No. 101-625, tit. VI, 104 Stat 4249 (1990) () (LIHPRHA). Both the ELIHPA and LIHPRHA banned mortgage prepayment without HUD approval. In addition, the Acts set very high the statutory conditions for HUD approval of a mortgage pre-payment plan. As a result, because investors could not prepay mortgages and turn their properties into better investments, many felt they had effectively lost the use of their property.
Appellants sued for breach of contract and a regulatory taking because they believe their inability to prepay their mortgages without HUD approval is a compensable taking. They pled that, under LIHPRHA, they filed Notices of Intent (NOIs)3 to prepay or seek compensation. Nevertheless, following submission of the appellants' NOIs, they claim that HUD did not provide the requisite appraisals...
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