McClung v. City of Sumner

• Decision Date: 25 September 2008
• Docket Number: No. 07-35231.,07-35231.
• Citation: 548 F.3d 1219
• Parties: Daniel McCLUNG; Andrea McClung, individually and as a marital community, Plaintiffs-Appellants, and Tapps Brewing, Inc., a Washington corporation, Plaintiff, v. CITY OF SUMNER, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

548 F.3d 1219

Daniel McCLUNG; Andrea McClung, individually and as a marital community, Plaintiffs-Appellants, and Tapps Brewing, Inc., a Washington corporation, Plaintiff, v. CITY OF SUMNER, Defendant-Appellee.

No. 07-35231.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 11, 2008.

Filed September 25, 2008.

Amended December 1, 2008.

William C. Severson, William C. Severson PLLC, Seattle, WA, for the plaintiffs-appellants.

Michael C. Walter, Keating, Bucklin & McCormack, Inc., Seattle, WA, for the defendant-appellee.

Appeal from the United States District Court for the Western District of Washington; Ronald B. Leighton, District Judge, Presiding. D.C. No. CV-06-05006-RBL.

Before RICHARD R. CLIFTON and N. RANDY SMITH, Circuit Judges, and J. MICHAEL SEABRIGHT,^* District Judge.

ORDER AMENDING OPINION AND DENYING REHEARING AND AMENDED OPINION

ORDER

The opinion filed on September 25, 2008, is amended as follows:

On slip Opinion page 13750, insert a new footnote 3 at the bottom of the page after the sentence that ends "... applies to Ordinance 1603." (and renumber the subsequent footnotes):

We observe that the ordinance before us concerns a permit condition designed to mitigate the adverse effects of the new development. New construction increases the burden on the City's sewer system and increases the loss that might result from flooding. After experiencing considerable flooding, the City enacted Ordinance 1603 to require most new developments to include specified storm pipes. We are not confronted, therefore, with a legislative development condition designed to advance a wholly unrelated interest. We do not address whether Penn Central or Nollan/Dolan would apply to such legislation.

With the opinion as amended, Judge Clifton and Judge N.R. Smith voted to deny the petition for rehearing en banc and Judge Seabright so recommended.

The full court has been advised of the petition for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.

The petition for rehearing en banc, filed October 9, 2008, is DENIED.

No further petitions for rehearing or rehearing en banc may be filed by the parties.

OPINION

SEABRIGHT, District Judge:

In 1995, Daniel and Andrea McClung (the "McClungs") sought to develop property they owned in the City of Sumner (the "City"), and learned that their underground storm drain pipe did not meet the City's requirement for new developments to include pipes at least 12 inches in diameter. The McClungs assert that the City's subsequent request that they install a 24-inch pipe in exchange for the City approving their permit application and waiving certain permit and facilities fees effected an illegal taking of their property. This case presents an issue of first impression in this Circuit—whether a legislative, generally applicable development condition that does not require the owner to relinquish rights in the real property, as opposed to an adjudicative land-use exaction, should be reviewed pursuant to the ad hoc standards of Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), or the nexus and proportionality standards of Nollan v. California Coastal Commission, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), and Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994). We affirm, holding that the Penn Central analysis applies to the 12-inch pipe requirement. As for the installation of the 24-inch pipe, we conclude that the McClungs voluntarily contracted with the City to install the 24-inch pipe and thus the installation of that pipe was not a "taking" by the City.

I.

Between 1990 and 1992, the City experienced considerable flooding. To address this problem, the City took several steps, including adopting Ordinance 1603 which requires most new developments to include storm pipes with a minimum 12-inch diameter, outlining plans for the City to replace certain storm pipes with 18-, 21-, and 24-inch pipe, and constructing a storm drainage trunk line paid for in part through raising the stormwater general facility charge ("GFC") imposed on property owners.

Between 1983 and 1993, the McClungs purchased four adjoining residential properties in the City, and in May 1994, approached the City about converting one property into a Subway sandwich shop and paving an alley for use as a parking lot. The City had previously vacated this alley in exchange for certain conditions, including receiving an easement for public utilities and services that ran under the alley. During the course of discussions regarding the steps the McClungs would need to take to comply with the City's flood requirements, the parties learned that the storm pipe under the property was 12-inch pipe for four feet, then changed to 6-inch pipe for the remaining 350 feet. Because this pipe did not comply with Ordinance 1603 and did not meet the City plans for replacing certain pipes with 24-inch pipe, the City Engineer, via letter, offered to waive certain fees in exchange for the McClungs installing a 24-inch instead of 12-inch pipe:

To correct existing deficiencies, meet the needs of your development and satisfy the future requirements as outlined in the Storm Water Comprehensive Plan, a 24-inch diameter storm drain is to be installed as a condition of development.

...

As a developer, you are required to install a 12-inch storm drain as a minimum. My estimate shows the cost difference between a 12-inch and a 24-inch diameter pipe ranges from $7,200 to $7,500. To offset the cost of the oversizing to meet the City's Comprehensive Plan requirements, the City will waive the storm drainage General Facilities Charge, permit fees, plan review and inspection charges of the storm drainage systems for both the development and the Subway Shop.... If you find this acceptable, please proceed with the revisions to the Plans.

The McClungs revised their development plan to include a 24-inch pipe, which was approved on April 25, 1996. A 24-inch pipe was subsequently installed on the property.

Despite voicing no objection to the 24-inch pipe installation requirement and receiving the benefit of certain fees being waived, on April 27, 1998, the McClungs filed a complaint in Washington state court asserting violations of Washington state law. After several years of protracted state court litigation (including a summary judgment motion, an appeal, a trial, and further appeals), the Washington appeals court found that the McClungs should be permitted to amend their complaint to allege explicitly a violation of their Fifth Amendment rights and remanded the action to the trial court. Tapps Brewing, Inc. v. McClung, 125 Wash.App. 1024, 2005 WL 151932, at *8 (Jan. 25, 2005).

The McClungs subsequently amended their complaint to allege that the City's requirement that they upgrade the storm drain was a taking in violation of the Fifth Amendment. In response, the City removed the action to the United States District Court for the Western District of Washington.

On cross-motions, the McClungs sought summary judgment on their federal takings claim, and the City sought summary judgment on all remaining claims.¹ See Tapps Brewing, Inc. v. City of Sumner, 482 F.Supp.2d 1218, 1224-25 (W.D.Wash. 2007). For the McClungs' takings claim, the court separately analyzed Ordinance 1603's requirement that all new developments include 12-inch storm pipe and the City's request that the McClungs install a 24-inch storm pipe. Applying the ad hoc analysis of Penn Central, the court determined that the 12-inch storm pipe requirement was not an unconstitutional taking. Id. at 1228-31. Regarding the 12-inch to 24-inch request, the court found that the McClungs had contracted to install the 24-inch pipe in exchange for a waiver of the GFC and various fees. Id. at 1231. The McClungs' appeal followed.

II.

The district court's grant of summary judgment in favor of the City is reviewed de novo, under the same standards applied by the district court. Northrop Grumman Corp. v. Factory Mut. Ins. Co., 538 F.3d 1090, 1094 (9th Cir. 2008). "We must determine whether, viewing the evidence in the light most favorable to the nonmoving party, any genuine issues of material fact exist, and whether the district court correctly applied the relevant substantive law." Fazio v. City & County of S.F., 125 F.3d 1328, 1331 (9th Cir.1997).

III.

A.

Before turning to the merits of this appeal, we address briefly the issue of ripeness, "lest we overstep our jurisdiction."² Wash. Legal Found. v. Legal Found. of Wash., 271 F.3d 835, 871 (9th Cir.2001) (en banc).

Ripeness "is drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction." Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n. 18, 113 S.Ct. 2485, 125 L.Ed.2d 38 (1993); Portman v. County of Santa Clara, 995 F.2d 898, 902 (9th Cir.1993) ("The ripeness inquiry contains both a constitutional and a prudential component."). While Article III ripeness is jurisdictional, "[p]rudential considerations of ripeness are discretionary. ..." Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134, 1142 (9th Cir.2000) (en banc).

Although the Supreme Court has described takings claim ripeness as addressing prudential rather than Article III considerations, see Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725, 733-34, 117 S.Ct. 1659, 137 L.Ed.2d 980 (1997) (describing the ripeness standard of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), as a "prudential hurdle" to a regulatory takings claim), our Circuit has analyzed takings claim ripeness as raising both prudential and Article III considerations. Compare Beverly Blvd. LLC v. City of West Hollywood, 238 Fed.Appx. 210, 212 (9th Cir.2007) ("We need not resolve whether this claim is ripe...