Clifty Props., LLC v. City of Somerset

• Decision Date: 30 November 2016
• Docket Number: Civil No. 15-115-GFVT
• Parties: CLIFTY PROPERTIES, LLC, Plaintiff, v. THE CITY OF SOMERSET, PULASKI COUNTY, KENTUCKY; SOMERSET PLANNING AND ZONING BOARD; and SOMERSET CITY COUNCIL, Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

CLIFTY PROPERTIES, LLC, Plaintiff, v. THE CITY OF SOMERSET, PULASKI COUNTY, KENTUCKY; SOMERSETPLANNING AND ZONING BOARD; and SOMERSET CITY COUNCIL, Defendants.

Civil No. 15-115-GFVT

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY SOUTHERN DIVISION LONDON

November 30, 2016

MEMORANDUM OPINION & ORDER*** *** *** ***

Clifty Properties, LLC, currently owns a parcel of land zoned only for residential purposes. It desires a B-2, commercial development designation for the land, but so far its efforts to achieve that zoning change have been thwarted. Both the Somerset Planning and Zoning Commission and the Somerset City Council have voted to reject Clifty Properties' application for a zoning amendment, prompting the present litigation. Clifty Properties maintains Defendants have abridged its due process rights and that Defendants' actions constitute a taking without just compensation in violation of the United States Constitution. Both sides have filed motions for summary judgment, and, after careful review, the Court determines Defendants' motion is properly GRANTED but Clifty Properties' motion should be DENIED.

I

A

Clifty Properties, LLC, owns a 6.83 acre parcel of real estate in Pulaski County, Kentucky.¹ The property is located inside the Somerset city limits in an area known as Creek Terrace, and the parties refer to the land in question as the "Creek Terrace Property." For years, this area has been zoned as R-1, "Low Density Residential" or "Single Family Residential." [See R. 30-2 at 3, n. 2.] On January 20, 2015, Clifty Properties filed an application with the Somerset Planning and Zoning Commission seeking to change the Creek Terrace Property's zoning designation to B-2, "Highway Commercial Development." [R. 30-3.] This proposed change in designation from R-1 to B-2 is consistent with the Comprehensive Plan prepared and adopted by the Somerset Planning and Zoning Commission and City Council pursuant to KRS 100.197. [See R. 28-1 at 2; R. 28-2 at 21-22.]

In February 2015, the Somerset Planning and Zoning Commission held a public hearing on Clifty Properties' application. The minutes from that hearing indicate that Mr. Jack Mandt, counsel for Clifty Properties, spoke in favor of the zoning change, but Mr. and Mrs. Monty Gover and Mr. and Mrs. George Corder all argued against rezoning the property. [See R. 30-4.] Subsequently, the Planning and Zoning Commission closed the public hearing and began a private meeting to discuss Clifty Properties' application. [R. 30-4.] After some discussion, one Commission member voted to approve the zoning change and four voted to deny it. [Id.] Although no exhibit in the record verifies this, the Commission's findings were apparently statedto be "N/A. No zone change was made." [See R. 1-3 at 5; R. 28-1 at 3; R. 30-2 at 5 (suggesting the findings of fact set forth in R. 30-5 were added subsequent to the April 27, 2015, remand discussed below).] On Clifty Properties' actual application for the zoning amendment, the Commission noted the reason for its denial as "too much undeveloped commercial property in development at this time." [R. 30-3.]

The next month, the Somerset City Council held a public hearing on Clifty Properties' proposed zoning change. At the conclusion of the hearing, the City Council voted to prepare an ordinance that would essentially approve Clifty Properties' application. [See R. 30-2 at 5.] Three weeks later, the City Council held the first reading of that ordinance. [R. 30-7.] And then on April 27, the City Council remanded the issue back to the Somerset Planning and Zoning Commission. The minutes from that meeting indicate only that a councilperson "moved to remand the zone changes on Kit Cowan Road and Creek Terrace back to Planning and Zoning to get proper finding of facts," and that the council on the whole approved the remand. [R. 30-8.]

Upon remand, the Somerset Planning and Zoning Commission reached the same result as before but apparently added to their findings. A document entitled "Summary of Comments/Statements, Findings of Fact, and Recommendation of Board" indicates that, while Clifty Properties' proposed zone change from R-1 to B-2 was consistent with the Comprehensive Plan, the Commission would not recommend the rezoning to the Somerset City Council. [R. 30-5 at 3.] The Somerset City Council then held a second reading of the relevant ordinance in May and proceeded to vote on the issue. The ordinance failed six votes to five. [R. 28-1 at 3; R. 30-2 at 6; R. 30-9.]

Next, Clifty Properties filed a civil complaint against the City of Somerset, the Somerset Planning and Zoning Commission, and the Somerset City Council. [See R. 1-3.] The complaintalleges both the Commission and the City Council made decisions that were "erroneous, arbitrary and capricious, and in violation of the Somerset Zoning Regulations, the provisions of the Kentucky Revised Statutes, the Kentucky Constitution, the U.S. Constitution, [and] the United States Statutes." [See id. at 6-8.] These claims are detailed below, but notably, one of the claims involves Defendants' alleged unlawful taking of Clifty Properties' property without just compensation in violation of the Fifth and Fourteenth Amendments to the United States Constitution. [Id. at 7; 8.] Defendants removed the lawsuit from Pulaski Circuit Court to the Eastern District of Kentucky on the basis of that claim and pursuant to 28 U.S.C. § 1331. [See R. 1.]

B

Clifty Properties' complaint sets forth various allegations against the City of Somerset, the Somerset Planning and Zoning Commission, and the Somerset City Council. [R. 1-3.] These claims are not articulated with great clarity—for example, "Count I" through "Count III" contain only factual background, and no claims for relief at all. [Id. at 3-6.] But Counts IV through VII do set forth certain claims which the Court construes in light of Pearson v. City of Grand Blanc, 961 F.2d 1211 (6th Cir. 1992).

In Pearson, the Sixth Circuit noted the lack of uniformity used by various parties and lower courts to describe federal zoning claims. 961 F.2d at 1215. Accordingly, the Pearson court set forth six categories of possible federal zonings claims and briefly described each of those causes of action. Id. The six Pearson categories are as follows:

1. Just compensation takings claims, through which a plaintiff claims that the zoning laws applied to his land constitute a taking of his property without just compensation in contravention of the Fifth Amendment. The remedy sought by a plaintiff in a justcompensation takings claim is financial in nature—the plaintiff seeks actual "just compensation" for his property;

2. Due process takings claims, through which a plaintiff claims that the zoning laws applied to his property go too far and destroy the value of his property to such an extent that the laws amount to a taking by eminent domain without due process. The remedy sought by a plaintiff in a due process takings claim is invalidation of the zoning regulation;

3. Arbitrary and capricious substantive due process claims, through which a plaintiff claims that a zoning regulation is arbitrary and capricious and does not bear a substantial relation to the public health, safety, morals, or general welfare;

4. Equal protection claims based on suspect class, mere economic discrimination, or invoking strict scrutiny;

5. Procedural due process claims, which typically involve an argument related to a plaintiff's notice and opportunity to be heard (or lack thereof); and

6. First Amendment claims, through which a plaintiff claims that a First Amendment right such as freedom of speech or religion is violated by a certain zoning ordinance.

See Pearson, 961 F.2d 1215-16; see also Nasierowski Bros. Inv. Co. v. City of Sterling Heights, 949 F.2d 890, 893 (6th Cir. 1991) (describing procedural due process claims in this context).

The Court has compared the categories of claims set forth in Pearson with the language in Clifty Properties' complaint and has determined the complaint sets forth claims under categories one, three, and possibly five, as well as additional state law claims. Clifty Properties clearly alleges a just compensation takings claim, as Paragraphs 21 and 27 reference Defendants' "taking of Plaintiff's property without just 'compensation' in violation of the Fifth and Fourteenth Amendments of the Constitution of the United States." [R. 1-3 at 7-8.]

Clifty Properties' complaint also alleges an arbitrary and capricious substantive due process claim. The complaint refers several times to Defendants' "erroneous, arbitrary, and capricious" actions [see id. at 6-7] and argues Defendants' actions were not supported by substantial evidence [see id. at 7-8].

And, although less clear, Clifty Properties' complaint may possibly be construed to include a procedural due process claim. The complaint fails to reference any issues related to notice and an opportunity to be heard, the hallmarks of a procedural due process claim. [See id.] However, the complaint does allege Defendants went about their proceedings "without adequate standards of due process," and the parties assume the complaint alleges a procedural due process violation.² [See id.; R. 30-2 at 17-18.]

Finally, the complaint refers to several violations of state law. These include violations of KRS Chapter 100 and allegations that both the Somerset Planning and Zoning Commission and Somerset City Council acted outside the scope of their state-given powers. [See R. 1-3 at 7-8.]

II

Both parties have filed motions for summary judgment in this case. Clifty Properties' motion is primarily concerned with whether Defendants acted arbitrarily, and the motion does not address Clifty Properties' federal takings claim in any great detail. [See R. 28-1.] Defendants' cross-motion for summary judgment, however, argues the takings claim should be dismissed based on ripeness. [R. 30-2 at 8.] The Court begins by addressing that argument set forth in D...