Karma Ventures, LLC v. Chelan Cnty.
| Decision Date | 11 February 2021 |
| Docket Number | NO. 2:20-CV-0446-TOR,2:20-CV-0446-TOR |
| Parties | KARMA VENTURES, LLC, Plaintiff, v. CHELAN COUNTY and ANGEL HALLMAN, individually, Defendants, and CHELAN COUNTY, Counter Claimant, v. KARMA VENTURES, LLC, Counter Defendant. |
| Court | U.S. District Court — District of Washington |
BEFORE THE COURT is Plaintiff's Motion for Partial Remand (ECF No. 6). This matter was submitted for consideration without oral argument. The Court has reviewed the record and files herein, the completed briefing, and is fully informed. For the reasons discussed below, Plaintiff's Motion for Partial Remand (ECF No. 6) is GRANTED.
This case concerns a land dispute over conditional use permits issued by Defendant Chelan County to Plaintiff Karma Ventures, LLC.
Plaintiff owns real property in Chelan County, Washington. ECF No. 6 at 2. On August 19, 2005, after receiving the appropriate conditional use permits, Plaintiff opened a winery, retail space, and wedding venue business on the property. ECF No. 6 at 2. On October 7, 2008, the Chelan County Commissioners amended the definition of "winery" to include on-site food preparation, service, and consumption to certain places of assembly. ECF No. 6 at 2. Thereafter, Plaintiff opened a restaurant on the property. ECF No. 6 at 2.
During the summer of 2011, Defendant Angel Hallman, a Chelan County code compliance officer, visited Plaintiff's property and "confronted" one of Plaintiff's principal members. ECF No. 6 at 2. Following Ms. Hallman's visit, the County informed Plaintiff that it was not authorized for restaurant operations. ECF No. 6 at 2. In March 2012, Plaintiff received approval for amended conditional use permits that authorized the restaurant operation and provided that the permitswould "become void after three years after approval ... if the use is not completely developed." ECF No. 6. at 2; ECF No. 9 at 4.
From 2012 to 2017, Plaintiff continued to operate the restaurant. On September 27, 2019, Plaintiff received a Notice of Violation from Chelan County, signed by Ms. Hallman. ECF No. 6 at 2. The Notice claimed that Plaintiff was out of compliance with the conditional use permits, and as such, the permits were void due to three unsatisfied conditions. ECF No. 6 at 2-3. Over the next year, Plaintiff attempted to come into compliance with the conditional use permits, offered to submit the required documentation, and made repeated efforts to work with the County. ECF No. 6 at 3. Nonetheless, Chelan County required that Plaintiff obtain new conditional use permits. ECF No. 6 at 3.
On June 2020, Plaintiff received a Notice of Violation and Order, signed by Ms. Hallman, which declared Plaintiff's conditional use permits void for failure to satisfy conditions and ordered the termination of all restaurant operations. ECF No. 6 at 3; ECF No. 9 at 4. On July 6, 2020, Plaintiff filed an administrative appeal of the Order. ECF No. 6 at 3. Plaintiff argued that it was not required to comply with the conditions of approval so long as it "developed the uses authorized" by the conditional use permits. ECF No. 9 at 4. Plaintiff also argued that it had a vested nonconforming use under the Chelan County Resolution 2008-141 amending the definition of "winery." ECF No. 9 at 4.
On October 15, 2020, Plaintiff filed a Complaint against Defendants in Douglas County Superior Court alleging state law claims for tortious interference with business expectancy, negligence, ultra vires, civil conspiracy, and violation of RCW 64.40 et seq. ECF No. 1.
On November 3, 2020, the Chelan County Hearing Examiner filed its Land Use Decision on Plaintiff's administrative appeal. ECF No. 6 at 4. The Hearing Examiner found that Plaintiff's conditional use permits "expired due to failure to complete all of the conditions of approval" and noted that restaurant operations "never have been allowed" on Plaintiff's property. ECF No. 9 at 5.
On November 20, 2020, Plaintiff filed its First Amended Complaint, adding a petition for judicial review of the Hearing Examiner's land use decision under the Land Use Petition Act ("LUPA"). ECF No. 1-1 at 27. Plaintiff also added alleged violations of substantive due process and equal protection under 42 U.S.C. § 1983. ECF No. 1-1 at 25-27.
On December 2, 2020, Defendant Chelan County timely removed the action under 28 U.S.C. § 1441(a). ECF No. 1. On December 9, 2020, Defendants filed an Answer, including counterclaims for declaratory judgment pursuant to 28 U.S.C. §§ 2201, 2202, RCW 7.24 et seq., and Chelan County Code § 16.02.030, warrant of abatement, liens and costs pursuant to RCW 7.48 et seq., and an award of attorneys' fees and costs pursuant to RCW 64.40 et seq. ECF No. 4 at 34-36.
On December 29, 2020, Plaintiff timely filed the present motion. The parties timely filed their respective response and reply. ECF Nos. 9, 11.
A. Motion for Partial Remand
Pursuant to 28 U.S.C. § 1441, a defendant may remove an action from state to federal court only if the federal court has original subject matter jurisdiction over the action. "In civil cases, subject matter jurisdiction is generally conferred upon federal district courts either through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C. § 1331." Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005).
Where a federal court has original subject matter jurisdiction over a case, the court "shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a). If the claims arise from the same case or controversy, a court may nonetheless decline supplemental jurisdiction and remand a state law claim if "(1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are othercompelling reasons for declining jurisdiction." 28 U.S.C. § 1367(c). The Court's discretion in exercising or declining supplemental jurisdiction is informed by the values "of economy, convenience, fairness, and comity." Acri v. Varian Associates, Inc., 114 F. 3d 999, 1001 (9th Cir. 2007) (internal quotation and citation omitted).
Here, Plaintiff's allegations of substantive due process and equal protection violations under 42 U.S.C. § 1983 present federal questions over which the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331. However, Plaintiff's remaining LUPA petition and state law claims do not present a federal question. The Court finds, and the parties agree, that Plaintiff's state law claims arise from the same case or controversy as the federal claims, satisfying the requirement for exercising supplemental jurisdiction. ECF No. 6 at 5; ECF No. 9 at 3. Therefore, the Court must determine in its discretion whether to exercise supplemental jurisdiction on the remaining state law claims pursuant to 28 U.S.C. § 1367(c).
As an initial matter, the parties agree that the LUPA petition should be remanded. ECF No. 9 at 5. However, the parties dispute whether the remaining state law claims should be remanded on the basis that they raise novel or complex issues and/or substantially predominate over the federal claims. ECF No. 6 at 6; ECF No. 9 at 6-8.
Plaintiff asserts that this case raises novel and complex issues under state and local land use law that apply equally to the LUPA petition and state law claims. ECF No. 6 at 12; ECF No. 11 at 3. Defendants argue that the state court decision on the LUPA petition will resolve any novel or complex issues that arise. ECF No. 9 at 6-7.
The parties agree that the findings on the LUPA petition will inform the findings on the state law claims. ECF No. 9 at 6; ECF No. 11 at 3. To the extent that this case raises issues related to the proper standards in voiding conditional use permits, the application of Washington's vested rights doctrine, and Defendants' conduct related therein, the Court finds that this case raises novel and complex state law issues. ECF No. 6 at 9-10; ECF No. 11 at 8. Even if the LUPA petition were to resolve such novel and complex issues, the state law issues nonetheless predominate over the federal claims to warrant remand under 28 U.S.C. § 1367(c)(2).
Plaintiff argues that the state claims, including the LUPA petition, predominate over the federal § 1983 claims for money damages. ECF No. 6 at 6. Defendants argues that there is no predominance where the federal § 1983 claimsparallel the analysis for the RCW 64.40 et seq. claim and inform the analysis for the conspiracy and tortious interference claims. ECF No. 9 at 7-8.
Here, the heart of this case is the LUPA petition. As Defendants acknowledge, "[t]he state and federal claims are merely alternative devices to recover damages arising from the same conduct that is at issue in the LUPA appeal." ECF No. 9 at 8. In addition to the LUPA petition, Plaintiff's state claims alleging tortious interference with business expectancy, negligence, procedural and substantive ultra vires, civil conspiracy, and violation of RCW 64.40 et seq. "substantially predominate" over claims for damages under § 1983. The factual and legal findings necessary to Plaintiff's LUPA petition and state law claims will inform, if not control, the findings on the § 1983 claims. Therefore, remand of these state law claims is appropriate. 28 U.S.C. § 1367(c)(2).
While not briefed by the parties, it is clear that state law also "substantially predominates" over Defendants' counterclaims that arise out of the same case and controversy as Plaintif...
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