MST, LLC v. N. Am. Land Tr.
| Decision Date | 08 November 2022 |
| Docket Number | 2:22-cv-00874-DCN |
| Parties | MST, LLC, Plaintiff, v. NORTH AMERICAN LAND TRUST and GEORGETOWN MEMORIAL HOSPITAL, Defendants. |
| Court | U.S. District Court — District of South Carolina |
This matter is before the court on defendant Georgetown Memorial Hospital's (the “Hospital”) motion to dismiss, ECF No. 14, and defendant North American Land Trust's (“NALT”) (collectively “defendants”) motion to dismiss, ECF No. 15. For the reasons set forth below, the court denies the motions to dismiss.
Plaintiff MST, LLC (“MST”) brought this action for a declaratory judgment against Hospital and NALT regarding property in Georgetown County, South Carolina known as Weehaw Plantation (“Weehaw”). ECF No. 1, Compl. ¶¶ 6-7.
MST purchased Weehaw from Kyle N. Young and Jaqueline M. Young on June 16, 2010. Compl. ¶ 6. Fifteen years earlier, on December 29, 1995, the prior owners of Weehaw, Larry and Judy Young (the “Youngs”), granted NALT a Conservation Easement and Declaration of Restrictive Covenants (the “Conversation Easement”). Id. ¶ 7. The Conservation Easement perpetually encumbers Weehaw, as well as approximately 56.75 acres currently owned by the Hospital (the “Hospital Easement Property”) that was subdivided from Weehaw prior to MST's ownership. Id. ¶ 8. The Conservation Easement recites the environmental, conservation, and open space values of the encumbered property, and includes its important role as an ecologically stable habitat for flora and fauna, as well as for the endangered Red-cockaded Woodpeckers. Id. ¶¶ 10-12. The owners of the property recognized it as a valid easement-the Youngs claimed a qualified conservation contribution on their state and federal tax return, which reduced their taxable income and hence their income taxes, on the basis that the Conservation Easement met the requirements of state and federal law, including 26 C.F.R. § 1.1170A-14, Treas. Reg. § 1.170A-14. Id. ¶ 16.
Years later, the Youngs and NALT attempted to release the Hospital Easement Property from the Conservation Easement by an amendment dated December 19, 2008. Id. ¶ 17. Defendants assert this release was in exchange for further encumbering approximately thirty-five acres of waterfront property in Weehaw and giving up the right to develop five homesites, which were originally permitted to be constructed under the Conservation Easement. ECF No. 14 at 3. Shortly before that amendment, Georgetown County zoned the hospital's property (the “Hospital Tract”), including the Hospital Easement Property, as a planned development district that permits only hospital and medical related uses. Compl. ¶ 20. In Spring 2021, the Hospital sought to amend the zoning of the planned development district to allow a large multifamily affordable housing project on part of the Hospital Tract, including a portion of the Hospital Easement Property. Id. ¶ 21. MST asserts that the Hospital no longer intends to develop the Hospital Tract for hospital or medical offices; instead, it entered a purchase and sale agreement with a multifamily development company, FourSix Development, to sell it sixteen acres of the Hospital Tract, including a portion of the Hospital Easement Property. Id. ¶ 23. MST and neighboring properties opposed the rezoning and on May 25, 2021, at the third public reading of the zoning amendment, the amendment failed to pass. ECF No. 14 at 4. As a result, the Hospital's contract to sell the hospital property for affordable housing fell through. Id. at 5.
On March 16, 2022, MST filed this complaint seeking a declaratory judgment to establish that the Conservation Easement, once granted, encumbers the property in perpetuity as a matter of law. Compl. On June 6, 2022, Hospital filed its motion to dismiss for failure to state a claim, ECF No. 14, and on that same date NALT filed its motion to dismiss for failure to state a claim, ECF No. 15. MST filed its response in opposition to both motions on July 5, 2022. ECF No. 19. On July 19, 2022, the Hospital replied, ECF No. 23, as did NALT, ECF No. 24. The court held a hearing on the motions on October 25, 2022. ECF No. 28. As such, the motions are fully briefed and are now ripe for review.
A Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (). To be legally sufficient, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).
A Rule 12(b)(6) motion should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support his claim and would entitle him to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
The Hospital moves this court to dismiss MST's claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure alleging that MST lacks standing to pursue its claim. ECF No. 14. NALT joins the Hospital in moving the court to dismiss MST's claim pursuant to Rule 12(b)(6) for lack of standing. ECF No. 15. The court examines the relevant justiciability doctrines, including standing, in turn.
At the outset, the court must determine whether the pleadings state a cause of action entitling the parties to a declaratory judgment. The parties cannot by consent or agreement confer jurisdiction on the court to render a declaratory judgment in the absence of an actual justiciable controversy.
Article III of the Constitution established the judicial branch to peacefully resolve “Cases” and “Controversies,” simultaneously endowing the judiciary with the authority to resolve disputes and limiting the exercise of that power to the nebulous concept of “cases and controversies.” U.S. Const. Art. III, § 2. Resolving to encompass the entire concept of federal jurisdiction with those two words, the authors of Article III left the Supreme Court to determine the types of disputes which “are of the justiciable sort,” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992), i.e., “appropriately resolved through the judicial process,” Whitmore v. Arkansas, 495 U.S. 149, 155 (1990).
The Supreme Court has defined the contours of the cases-and-controversies requirement through several “justiciability doctrines.” Justiciability requires that there be a live controversy throughout the entirety of litigation. Am. Fed'n of Gov't Emps. v. Off of Special Couns., 1 F.4th 180, 187 (4th Cir. 2021). Such doctrines ensure that federal courts hear only true “cases and controversies” by precluding consideration of those matters that are not ripe, see, e.g., Abbott Labs. v. Gardner, 387 U.S. 136 (1967), are moot, see, e.g., Already, LLC v. Nike, Inc., 568 U.S. 85 (2013), ask political questions, see, e.g., Nixon v. United States, 506 U.S. 224 (1993), or seek advisory opinions, see, e.g., Golden v. Zwickler, 394 U.S. 103 (1969). Additionally, a justiciable dispute must be brought by a party with standing, which the Supreme Court has deemed “an essential and unchanging part of the case-or-controversy requirement.” Lujan, 504 U.S. at 560. The concepts of justiciability are fluid and inform the constitutional “cases and controversies” definition by providing examples of the types of disputes that are not justiciable.
The Declaratory Judgment Act permits a court to “declare the rights and other legal relations of” interested parties “in a case of actual controversy.” 28 U.S.C. § 2201. A court may not entertain a declaratory judgment claim in the absence of an underlying case or controversy. See Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-40 (1937) (). As such, an action for declaratory judgment does not escape the constitutional mandate that its proponent has standing and that it does not seek an advisory opinion. See Trustgard Ins. Co. v. Collins, 942 F.3d 195, 199 (4th Cir. 2019) ().
Courts have long grappled with the distinction between a valid declaratory judgment claim and request for an advisory opinion that fails to present a case or controversy. The Supreme Court has said that its own jurisprudence “do[es] not draw the brightest of lines between those declaratory-judgment actions that satisfy the case-or-controversy requirement and those that do not.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 127 (2007). ...
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