Town of Chester v. Laroe Estates, Inc.

Decision Date05 June 2017
Docket NumberNo. 16–605.,16–605.
Citation137 S.Ct. 1645,198 L.Ed.2d 64
Parties TOWN OF CHESTER, NEW YORK, Petitioner v. LAROE ESTATES, INC.
CourtU.S. Supreme Court

Neal K. Katyal, Washington, DC, for Petitioner.

Sarah E. Harrington for the United States as amicus curiae, by special leave of the Court, supporting the Petitioner.

Shay Dvoretzky, Washington, DC, for Respondent.

Joseph J. Haspel, Goshen, NY, James R. Saywell, Jones Day, Cleveland, OH, Shay Dvoretzky, Emily J. Kennedy, Jones Day, Washington, DC, for Respondent.

Brian S. Sokoloff, Steven C. Stern, Sokoloff Stern LLP, Carle Place, NY, Neal Kumar Katyal, Colleen E. Roh Sinzdak, Mitchell P. Reich, Allison K. Turbiville, Hogan Lovells US LLP, Washington, DC, for Petitioner.

Justice ALITO delivered the opinion of the Court.

Must a litigant possess Article III standing in order to intervene of right under Federal Rule of Civil Procedure 24(a)(2) ? The parties do not dispute—and we hold—that such an intervenor must meet the requirements of Article III if the intervenor wishes to pursue relief not requested by a plaintiff. In the present case, it is unclear whether the intervenor seeks different relief, and the Court of Appeals did not resolve this threshold issue. Accordingly, we vacate the judgment and remand for that court to determine whether the intervenor seeks such additional relief.

I

In 2001, land developer Steven Sherman paid $2.7 million to purchase nearly 400 acres of land in the town of Chester, New York (Town). Sherman planned to build a housing subdivision called MareBrook, complete with 385 housing units, a golf course, an onsite restaurant, and other amenities. Sherman applied for approval of his plan and thus began a "journey through the Town's ever-changing labyrinth of red tape." Sherman v. Chester, 752 F.3d 554, 557 (C.A.2 2014).

In 2012, Sherman filed this suit against the Town in New York state court. The suit concerned "the decade's worth of red tape put in place" by the Town and its regulatory bodies. Id., at 558. According to Sherman, the Town obstructed his plans for the subdivision and forced him to spend around $5.5 million to comply with the Town's demands. Id., at 558, 560. All of this, Sherman claimed, left him financially exhausted and on the brink of personal bankruptcy. Id., at 560. Sherman brought nine federal- and state-law claims against the Town, including a regulatory takings claim under the Fifth and Fourteenth Amendments. See App. 98–122. The Town removed the case to a Federal District Court, which dismissed Sherman's takings claim as unripe. Opinion and Order in No. 1:12–cv–00647 (SDNY), Dkt. 14, p. 25. The Court of Appeals for the Second Circuit reversed the ripeness determination and remanded for the case to go forward. Chester, supra, at 557.1

On remand, real estate development company Laroe Estates, Inc. (the respondent here) filed a motion to intervene of right under Federal Rule of Civil Procedure 24(a)(2). This Rule requires a court to permit intervention by a litigant that "claims an interest related to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." Laroe alleged that in 2003 it had entered into an agreement with Sherman regarding the MareBrook property. Under this agreement, Laroe was to make $6 million in payments to Sherman, secured by a mortgage on all of the development, and Sherman was to sell Laroe parcels of land within the proposed subdivision when the MareBrook plan was approved. However, Laroe reserved the right to terminate the entire agreement if Sherman was unable to obtain Town approval for a sufficient number of lots. While this agreement was in place and Sherman continued his futile quest for regulatory approval, Laroe paid Sherman more than $2.5 million.

In 2013, TD Bank commenced a foreclosure proceeding on Sherman's property. In an effort to save the deal, Laroe and Sherman entered into a new agreement. That agreement provided that the purchase price of the property would be the $2.5 million that Laroe had already advanced Sherman plus any amount Sherman had to pay to settle with TD Bank. Once the Town approved the plan, Laroe was required to transfer a certain number of lots back to Sherman. In addition to imposing this transfer obligation, the agreement deemed Laroe to have paid for the land in full. Laroe was also given the authority to settle the debt Sherman owed TD Bank and to terminate the agreement if the settlement failed. The settlement did fail, and TD Bank took over the property. But Laroe never terminated its agreement with Sherman.

In support of its motion to intervene, Laroe argued that, under New York law, it is "the equitable owner of the Real Property" at issue in Sherman's suit. App. 131, 135–139. Laroe asserted that its status as equitable owner gave it an interest in the MareBrook property; that its interest would be impaired if it could not intervene; and that Sherman "ha[d] his own agenda" and consequently could not adequately represent Laroe's interest. Id., at 143–145. Along with its other intervention-related pleadings, Laroe filed an intervenor's complaint asserting a regulatory takings claim that was substantively identical to Sherman's. Laroe's complaint sought, among other things, a "judgment against [the Town] awarding [Laroe] damages," namely, "compensation for the taking of Laroe's interest in the subject real property." Id ., at 162.

The District Court denied Laroe's motion to intervene on the ground that Laroe lacked standing to bring a takings claim "based on its status as contract vendee to the property." App. to Pet. for Cert. 57a. The District Court interpreted Second Circuit precedent—specifically, United States Olympic Comm. v. Intelicense Corp., S. A., 737 F.2d 263, 268 (1984) —to mean that Laroe's equitable interest did not confer standing. App. to Pet. for Cert. 55a–56a.2

The Court of Appeals reversed. 828 F.3d 60, 62 (C.A.2 2016). Acknowledging a division among the Courts of Appeals on whether an intervenor of right must meet the requirements of Article III, the Second Circuit sided with the courts that have held that Article III standing is not required. Id., at 64–65.

We granted certiorari. 580 U.S. ––––, 137 S.Ct. 810, 196 L.Ed.2d 596 (2017).

II

Article III of the Constitution limits the exercise of the judicial power to "Cases" and "Controversies." § 2, cl. 1. This fundamental limitation preserves the "tripartite structure" of our Federal Government, prevents the Federal Judiciary from "intrud[ing] upon the powers given to the other branches," and "confines the federal courts to a properly judicial role." Spokeo, Inc. v. Robins, 578 U.S. ––––, ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). "If a dispute is not a proper case or controversy, the courts have no business deciding it, or expounding the law in the course of doing so." DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006).

"Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy." Spokeo, supra, at ––––, 136 S.Ct., at 1547. "The law of Article III standing, which is built on separation-of-powers principles, serves to prevent the judicial process from being used to usurp the powers of the political branches." Clapper v. Amnesty Int'l USA, 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). Our standing doctrine accomplishes this by requiring plaintiffs to "alleg[e] such a personal stake in the outcome of the controversy as to ... justify [the] exercise of the court's remedial powers on [their] behalf." Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 38, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976) (internal quotation marks omitted). To establish Article III standing, the plaintiff seeking compensatory relief must have "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, supra, at ––––, 136 S.Ct., at 1547. "Absent such a showing, exercise of its power by a federal court would be gratuitous and thus inconsistent with the Art. III limitation." Simon, supra, at 38, 96 S.Ct. 1917.

Our standing decisions make clear that " ‘standing is not dispensed in gross.’ " Davis v. Federal Election Comm'n, 554 U.S. 724, 734, 128 S.Ct. 2759, 171 L.Ed.2d 737 (2008) (quoting Lewis v. Casey, 518 U.S. 343, 358, n. 6, 116 S.Ct. 2174, 135 L.Ed.2d 606 (1996) ; alteration omitted). To the contrary, "a plaintiff must demonstrate standing for each claim he seeks to press and for each form of relief that is sought." Davis, supra, at 734, 128 S.Ct. 2759 (internal quotation marks omitted); see, e.g., DaimlerChrysler, supra, at 352, 126 S.Ct. 1854 ("[A] plaintiff must demonstrate standing separately for each form of relief sought"); Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 185, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (same); Los Angeles v. Lyons, 461 U.S. 95, 105–106, and n. 7, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) (a plaintiff who has standing to seek damages must also demonstrate standing to pursue injunctive relief).

The same principle applies when there are multiple plaintiffs. At least one plaintiff must have standing to seek each form of relief requested in the complaint. Both of the parties accept this simple rule.3

The same principle applies to intervenors of right. Although the context is different, the rule is the same: For all relief sought, there must be a litigant with standing, whether that litigant joins the lawsuit as a plaintiff, a coplaintiff, or an intervenor of right. Thus, at the least, an intervenor of right must demonstrate Article III standing when it seeks additional relief beyond that which the plaintiff re...

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