Fore Stars, Ltd. v. City of Las Vegas
| Decision Date | 23 September 2020 |
| Docket Number | Case No.: 2:19-cv-01469-JAD-NJK |
| Parties | FORE STARS, LTD. and Seventy Acres, LLC, Plaintiffs v. CITY OF LAS VEGAS, et al., Defendants |
| Court | U.S. District Court — District of Nevada |
Autumn Waters, James Jack Leavitt, Michael Schneider, Kermitt L. Waters, Law Offices of Kermitt L. Waters, Las Vegas, NV, for Plaintiffs.
Amanda C. Yen, Philip R. Byrnes, Seth T. Floyd, City Atty's Office-Civil Division, Bradford R. Jerbic, Las Vegas City Attorney's Office, George F. Ogilvie, III, John C. Molina, McDonald Carano Wilson LLP, Las Vegas, NV, Andrew W. Schwartz, Pro Hac Vice, Lauren Tarpey, Pro Hac Vice, Shute Mihaly & Weinberger LLP, San Francisco, CA, Debbie Leonard, Leonard Law, Reno, NV, for Defendant City of Las Vegas.
Steven Shevorski, Nevada Office of the Attorney General, Las Vegas, NV, for Defendants The Eighth Judicial District Court, Jim Crockett.
Order Granting Plaintiffs’ Motion to Remand and Denying Defendants’ Motions to Dismiss
Fore Stars, Ltd. and Seventy Acres, LLC sue the City of Las Vegas, the Eighth Judicial District Court, and the Honorable Jim Crockett for an unlawful taking, in violation of the Nevada and U.S. Constitutions.1 The City removed the case from state court sixteen months after it was filed.2 Conceding that it missed its first opportunity to remove, the City argues that the Supreme Court's later decision in Knick v. Township of Scott, Pennsylvania is an "order or other paper" under 28 U.S.C. § 1446(b)(3) that establishes this court's jurisdiction over the developers’ claims and opens its second removal window.3 Fore Stars and Seventy Acres move to remand, maintaining that the City's removal was untimely because § 1446(b)(3) ’s provisions do not permit removal on the basis of unrelated, federal decisions; Knick does not expand federal-question jurisdiction to encompass their claims; and the City was on notice that it could remove when they initially filed their complaint.4 Because I conclude that a ruling from an unrelated case does not meet § 1446(b)(3) motion, remand this case back to state court, and deny as moot the City's and the District Court's motions to dismiss.5
This inverse-condemnation case stems from Fore Stars and Seventy Acres’ decision to redevelop a multi-acre plot in Las Vegas, which was allegedly zoned for residential housing but designated as open space on a general-planning map.6 After the developers applied to the City and the City approved a request to amend the planning map and permit various construction projects, residents of a neighboring community sued the City in state court, challenging its approval on procedural grounds.7 Eighth Judicial District Court Judge Crockett agreed and signed an order highlighting those deficiencies.8 But Fore Stars and Seventy Acres believe his order went further than necessary, effectively rezoning the land and permanently restricting their right to develop the property.9 So they sought relief in state court,10 alleging that the Nevada state court, Judge Crockett, and the City committed a taking under six inverse-condemnation theories, in violation of the developers’ "substantive and procedural due process rights," Nevada law, and the Nevada and U.S. Constitutions.11
The City petitioned to remove this takings case to federal court roughly sixteen months after it was filed in state court.12 In support of its petition, the City cited the Supreme Court's July 23, 2019, judgment in Knick v. Township of Scott, Pennsylvania ,13 which overturned Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City14 and clarified that inverse-condemnation plaintiffs need no longer exhaust their claims in state court before turning to federal court.15 The City contends that the Knick decision constitutes an "order or other paper" alerting it that the and triggers the second thirty-day removal period prescribed by 28 U.S.C. § 1446(b)(3).16 Fore Stars and Seventy Acres disagree, arguing that removal is improper and untimely because (1) this case presents only state-law causes of action or, in the alternative, the City could have removed the suit from the start and failed to do so; (2) the Knick decision is not an "order or other paper" within the meaning of § 1446(b)(3) ; and (3) regardless, the City waived its right to remove.17
"Federal courts are courts of limited jurisdiction."18 Under 28 U.S.C. § 1441(a), a defendant may remove "any civil action" brought in state court when a federal court has "original jurisdiction," which may be based on either diversity or federal-question jurisdiction.19 The burden of establishing that a federal court has jurisdiction over the action "rests upon the party asserting jurisdiction"20 and a plaintiff may challenge removal by timely filing a motion to remand.21 In opposing a motion to remand, the defendant must overcome the "strong presumption against removal jurisdiction."22 "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance."23
Under 28 U.S.C. § 1446(b), removal must be timely.24 Generally, a defendant must remove a case within thirty days of receiving the complaint.25 But if the complaint itself does not clearly provide a basis for removal, a defendant has a second opportunity to remove within thirty days of receiving, "through service or otherwise," "a copy of an amended pleading, motion, order[,] or other paper from which it may first be ascertained that the case is one [that] is or has become removable."26 In the Ninth Circuit, defendants are not charged "with notice of removability until they've received a paper that gives them enough information to remove."27
The City's first opportunity to remove this case to federal court ended long ago.28 At issue here is whether the Knick decision triggered the City's second opportunity to remove. To resolve this dispute, the parties assert that I must first determine whether Knick expanded this court's original subject-matter jurisdiction over Fore Stars and Seventy Acres’ claims and then assess whether the Knick decision is an "order" or "paper" under § 1446(b)(3) that opened the City's second, thirty-day removal window.29 If I answer "yes" to both inquiries, and the City removed within thirty days of receiving the Knick final judgment,30 removal is proper and timely.
I decline the invitation to evaluate the impact of the Knick ruling here because, even if the holding in Knick rendered this suit removable,31 I find that the Knick decision does not qualify as an "order or other paper" under § 1446(b)(3). So I grant Fore Stars and Seventy Acres’ motion to remand because the City's second removal period never materialized and its petition to remove was thus untimely.
A brief history of inverse-condemnation claims against local and state authorities is necessary to understand the posture of this case. Since the mid-1980s, inverse-condemnation claimants were required to "pursue state procedures for obtaining compensation before bringing a federal [takings] suit."32 This state-exhaustion requirement rested on the Supreme Court's Fifth Amendment jurisprudence, as developed in Williamson County , which held that "a property owner has not suffered a violation of the Just Compensation Clause until the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State for obtaining such compensation."33 The taking was thus not " ‘complete’ until the State fail[ed] to provide adequate compensation for the taking."34
Whether characterized as a jurisdictional or prudential "ripeness" bar,35 Williamson County erected a prima facie barrier to takings claimants seeking just compensation from state officials in federal court.36 And the Ninth Circuit routinely affirmed dismissal of takings claims for lack of subject-matter jurisdiction when the claimants failed to exhaust state-court procedures or remedies.37 In 2005, the Supreme Court's decision in San Remo Hotel, L.P. v. City and County of San Francisco, Cal. articulated the downstream consequences of Williamson County 38 39 decisions denying takings claims, despite claimants’ best efforts to hold those claims in abeyance.41
The effect of San Remo ’s holding on inverse-condemnation claims is obvious: an adverse state court decision that, according to Williamson County , gives rise to a ripe, federal takings claim simultaneously bars that claim under the preclusive principles articulated in San Remo.42 Recognizing this " San Remo preclusion trap," the Supreme Court reversed Williamson County in Knick in 2019, reasoning that Williamson County ’s "state-litigation requirement rests on a mistaken view of the Fifth Amendment" and "imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled."43
For our purposes, the Knick Court made two vital rulings. First, the Court held that "a government violates the Takings Clause when it takes property without compensation,"44 so whether the taking occurs through formal condemnation or by regulation, claimants have "already...
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