FEDEQ DV004, LLC v. City of Portland

CourtUnited States District Courts. 1st Circuit. United States District Court (Maine)
Citation597 F.Supp.3d 463
Docket NumberDocket no. 2:21-cv-00327-GZS
Parties FEDEQ DV004, LLC et al., Plaintiffs, v. CITY OF PORTLAND, Defendant.
Decision Date11 April 2022

597 F.Supp.3d 463

FEDEQ DV004, LLC et al., Plaintiffs,

Docket no. 2:21-cv-00327-GZS

United States District Court, D. Maine.

Signed April 11, 2022

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Gene R. Libby, Keith P. Richard, Tyler J. Smith, Libby O'Brien Kingsley & Champion, LLC, Kennebunk, ME, Kelly Kirby Ballentine, Pro Hac Vice, Richard B. Lumley, Pro Hac Vice, Thomas T. Reith, Pro Hac Vice, Burns & Levinson, LLP, Boston, MA, Patrick J. Venne, Law Office of Patrick J. Venne, Gorham, ME, for Plaintiffs FEDEQ DV004 LLC, FEDEQ Sponsor Entity V LLC, Redwood Development Consulting LLC.

David A. Goldman, Russell Pierce, Norman, Hanson & Detroy, Portland, ME, for Defendant.


George Z. Singal, United States District Judge

597 F.Supp.3d 468

Before the Court is Defendant City of Portland's Motion to Dismiss (ECF No. 5). Having reviewed the Motion and the associated filings (ECF Nos. 6 & 7), the Court GRANTS IN PART and DENIES IN PART the Motion.


The pending Motion invokes two separate bases for dismissal under Federal Rule of Civil Procedure 12(b) : lack of subject matter jurisdiction and failure to state a claim. See Fed. R. Civ. P. 12(b)(1) & (6).

Generally, a federal court is obligated to assure itself of subject matter jurisdiction before considering the merits of any complaint. See, e.g., United States v. University of Mass., Worcester, 812 F.3d 35, 44 (1st Cir. 2016). The party asserting subject matter jurisdiction bears the burden of demonstrating its existence. E.g., Woo v. Spackman, 988 F.3d 47, 53 (1st Cir. 2021). Faced with a motion to dismiss under Rule 12(b)(1), the Court applies the same "plausibility standard applicable under Rule 12(b)(6)" to the operative complaint. Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016). However, the Court may also consider additional materials submitted by either side that allow it to resolve the jurisdictional challenge. See Valentin v. Hospital Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001) (noting that a "plaintiff's well-pleaded factual allegations ... [may be] augmented by an explanatory affidavit or other repository of uncontested facts").

Once the Court determines it has jurisdiction over the asserted claims, it may consider whether the operative complaint contains sufficient factual matter to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "In evaluating whether a complaint states a plausible claim, [the Court] ‘perform[s] a two-step analysis.’ " Saldivar v. Racine, 818 F.3d 14, 18 (1st Cir. 2016) (quoting Cardigan Mountain Sch. v. New Hampshire Ins. Co., 787 F.3d 82, 84 (1st Cir. 2015) ). First, the Court "must separate the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited)." Morales-Cruz v. University of P.R., 676 F.3d 220, 224 (1st Cir. 2012) (citing Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ).

Second, the Court "must determine whether the ‘factual content ... allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ " Id., 676 F.3d at 224 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). "This standard is ‘not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully.’ " Saldivar, 818 F.3d at 18 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ); see also Cebollero-Bertran v. Puerto Rico Aqueduct & Sewer Auth., 4 F.4th 63, 70 (1st Cir. 2021) (same). "Although

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evaluating the plausibility of a legal claim requires the reviewing court to draw on its judicial experience and common sense, the court may not disregard properly pled factual allegations, even if it strikes a savvy judge that actual proof of those facts is improbable." Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (internal citations and quotation marks omitted). Rather, "[t]he relevant inquiry focuses on the reasonableness of the inference of liability" drawn from the facts. Id. at 13.

In assessing whether a complaint adequately states a claim, the Court considers the "facts and documents that are part of or incorporated into the complaint." United Auto., Aerospace, Agric. Implement Workers of Am. Int'l Union v. Fortuño, 633 F.3d 37, 39 (1st Cir. 2011) (internal quotation marks omitted). But, the Court may also "supplement those facts with facts ‘gleaned from documents incorporated by reference into the complaint, matters of public record, and facts susceptible to judicial notice.’ " González v. Vélez, 864 F.3d 45, 48 (1st Cir. 2017) (quoting Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) ).

In addition to evaluating the sufficiency of a complaint, a court may consider affirmative defenses like res judicata in ruling on a motion to dismiss for failure to state a claim. See In re Colonial Mortg. Bankers Corp., 324 F.3d 12, 16 (1st Cir. 2003) ; Blackstone Realty LLC v. Federal Deposit Ins. Corp., 244 F.3d 193, 197 (1st Cir. 2001). So long as the facts establishing the defense are "clear ‘on the face of the plaintiff's pleadings’ " and "leave no doubt" that the defense applies, dismissal for failure to state a claim is appropriate. Blackstone Realty, 244 F.3d at 197 (quoting Aldahonda-Rivera v. Parke Davis & Co., 882 F.2d 590, 592 (1st Cir. 1989) & LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 509 (1st Cir. 1998) respectively).


A parcel of land approximately one acre in size, recorded under the name "Lot 6," sits at the intersection of Somerset and Chestnut Streets in Portland, Maine. (Pl. Ex. 1 (ECF No. 1-1), PageID # 7.) Plaintiff FEDEQ DV004, LLC ("DV004") purchased Lot 6 from Defendant City of Portland in 2016 to construct a parking garage. (Pl. Ex. 2 (ECF No. 1-2).) The parking garage formed one part of an "integrated real estate development" DV004 planned to build with Plaintiff FEDEQ DV005, LLC ("DV005"). (Compl. (ECF No. 1), PageID # 2.) The development plan envisioned construction on Lot 6 alongside nearby Lots 1, 3, and 7, which DV005 owns. (Id. )

The Portland City Council voted on September 8, 2021 to seize Lot 6 via a condemnation order. (See Compl., PageID # 3; Pl. Ex. 3 (ECF No. 1-3) (hereinafter, "Condemnation Order").) The Condemnation Order terminated DV004's ownership interest and the mortgage and leasehold interests that Plaintiffs FEDEQ Sponsor Entity V, LLC ("Lender") and Redwood Development Consulting, LLC ("Redwood") respectively held in Lot 6. (Pl. Ex. 3, PageID #s 47 & 48.) As compensation for the seizure of these interests, the Condemnation Order awarded each of these three Plaintiffs ten dollars. (See id., PageID #s 46 & 47.) The Condemnation Order did not award any funds to, nor mention, DV005. The Condemnation Order noted an "effective date" of September 18, 2021, but was recorded in the Cumberland County Registry of Deeds on September 23, 2021. (See id., PageID # 55; Compl., PageID # 4.)

The four Plaintiffs filed the Complaint under consideration on November 18, 2021,

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asserting violations of the Maine Constitution's Takings Clause (Count I) and its federal counterpart in the U.S. Constitution's Fifth Amendment (Count II). See Me. Const. art 1, § 21 ;1 U.S. Const., amend. V. Specifically, Plaintiffs allege Defendant denied them "just compensation" as was due under the state and federal Takings Clauses.


In support of its Motion, Defendant raises two jurisdictional arguments: that Plaintiffs’ claims are untimely, and that the Court should abstain from hearing these claims under the Rooker-Feldman doctrine. Defendant also raises two substantive arguments: that res judicata bars both claims, and that Plaintiffs have failed to state a claim upon which relief can be granted. As it is obliged to do, the Court addresses the jurisdictional challenges before the substantive. See Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 71–72, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013) ; United States v. Millenium Labs., Inc., 923 F.3d 240, 248 (1st Cir. 2019). Furthermore, because the Court's assertion of subject matter jurisdiction over Plaintiffs’ state takings claims would be supplemental to its federal question jurisdiction over the federal takings claims, the Court evaluates the latter claims first. See Lambert v. Fiorentini, 949 F.3d 22, 29 (1st Cir. 2020) ("As a general principle, the unfavorable disposition of a plaintiff's federal claims at the early stages of a suit will trigger the dismissal without prejudice of any supplemental state-law claims.") (internal quotation marks and alteration omitted); see also 28 U.S.C. § 1367.

A. Timeliness

1. Federal Takings Claim

The Takings Clause of the Fifth Amendment to the U.S. Constitution provides, "[N]or shall private property be taken for public use,...

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