SB Building Associates, L.P. v. Borough of Milltown , 457 F. App'x 154 ( 2012 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 09-1600
_____________
SB BUILDING ASSOCIATES, L.P., A New Jersey Limited Partnership; SB
MILLTOWN INDUSTRIAL REALTY HOLDINGS, LLC, A New Jersey Limited
Liability Corporation; ALSOL CORP., A New Jersey Corporation,
Appellants
v.
BOROUGH OF MILLTOWN;
MAYOR AND COUNCIL OF THE BOROUGH OF MILLTOWN;
MILLTOWN FORD AVENUE REDEVELOPMENT AGENCY
_____________
On Appeal from the United States District Court
for the District of New Jersey
District Court No. 3-07-cv-04127
District Judge: The Honorable Anne E. Thompson
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
January 13, 2012
Before: SCIRICA, RENDELL, and SMITH, Circuit Judges
(Filed: January 13, 2012)
_____________________
OPINION
_____________________
SMITH, Circuit Judge.
Plaintiffs SB Building Associates, L.P., SB Milltown Industrial Realty
Holdings, LLC, and Alsol Corporation challenge the alleged taking of their land by
Defendants the Borough of Milltown, New Jersey, various Milltown officials, and
the Milltown Ford Avenue Redevelopment Agency. On Defendants‟ motion for
judgment on the pleadings, the District Court rejected all of Plaintiffs‟ federal
claims, declined to exercise jurisdiction over Plaintiffs‟ state law claims, and
issued judgment in favor of Defendants. We will affirm.
I
On a motion for judgment on the pleadings, “[j]udgment will not be granted
unless the movant clearly establishes there are no material issues of fact, and he is
entitled to judgment as a matter of law. We must view the facts presented in the
pleadings and the inferences to be drawn therefrom in the light most favorable to
the nonmoving party.” Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir.
2005) (internal citation omitted). Our review is plenary. See id. at 219.
This case began with Defendants adopting a redevelopment plan for an area
of Milltown, encompassing multiple properties, including the property owned by
Plaintiffs. Since then, Defendants have taken steps toward redeveloping both the
property in question and the surrounding area. In response, Plaintiffs have brought
multiple state actions challenging the redevelopment under various legal theories.
2
Thus far, Plaintiffs have been unsuccessful.
This is the first federal action filed by Plaintiffs. The claims involved –
though closely related to the prior state actions – appear to be unique to this federal
action.1 Essentially, Plaintiffs contend that Milltown‟s initial resolution
authorizing the redevelopment did not specifically and unambiguously designate
the area as one in need of redevelopment, as required by New Jersey law. 2 As a
result, all subsequent actions in pursuit of that redevelopment are unlawful, both as
a taking without just compensation in violation of the Fifth Amendment, and as a
violation of the Fourteenth Amendment right to substantive due process. On
Defendants‟ motion for judgment on the pleadings, the District Court rejected all
of Plaintiffs‟ federal claims, declined to exercise jurisdiction over Plaintiffs‟ state
law claims, and issued judgment in favor of Defendants. This appeal followed.3
II
First, Plaintiffs challenge Defendants‟ actions to redevelop the property as
violating substantive due process. “A substantive due process violation is
established if „the government‟s actions were not rationally related to a legitimate
1
Nevertheless, we do not decide the applicability of claim or issue preclusion.
2
Even under the procedural posture of this case, we need not accept Plaintiffs‟
assertion that Milltown failed to properly designate the area as one in need of
redevelopment. Interpretation of the relevant ordinance is a question of law.
Nevertheless, for the purpose of this opinion, we assume Plaintiffs are correct.
3
government interest‟ or „were in fact motivated by bias, bad faith or improper
motive.‟” Sameric Corp. of Del., Inc. v. City of Phila., 142 F.3d 582, 590 (3d Cir.
1998) (quoting Parkway Garage, Inc. v. City of Phila., 5 F.3d 685, 692 (3d Cir.
1993)) (internal quotation marks omitted). Plaintiffs do not contend that
Defendants are motivated by bias, bad faith, or improper motive. Plaintiffs
contend solely that Defendants‟ actions are not rationally related to a legitimate
government purpose because Milltown failed to first properly designate the
property as an area in need of redevelopment.
Importantly, the Plaintiffs do not challenge Defendants‟ contention that the
property actually is in need of redevelopment.4 Instead, Plaintiffs bootstrap their
allegation that the Defendants failed to properly designate the property as one in
need of redevelopment into a contention that such a failure renders Defendants‟
actions arbitrary and violative of due process. This is incorrect. “Mere violation
of a state statute does not infringe the federal Constitution.” Sameric, 142 F.3d at
596 (quoting Snowden v. Hughes, 321 U.S. 1, 11 (1944)).
Plaintiffs would have us declare that the Defendants‟ alleged failure to
satisfy the procedural requirements of New Jersey law removes any logical basis
3
The District Court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. We
have appellate jurisdiction pursuant to 28 U.S.C. § 1291.
4
for Defendants‟ actions. But in determining whether Defendants‟ actions violate
substantive due process, we only ask whether the Defendants “could have had a
legitimate reason” for taking steps toward redeveloping the property at issue.
Sameric, 142 F.3d at 595 (quoting Pace Res., Inc. v. Shrewsbury Twp., 808 F.2d
1023, 1034, 1035 (3d Cir. 1987)) (emphasis added). Given Defendants‟
undisputed progress toward redeveloping the area in question – including adoption
of a redevelopment plan, selection of a redeveloper, and completion of various
administrative procedures – we can presume that the Defendants could indeed have
had a legitimate reason: they could have believed that the property was in need of
redevelopment. Again, the Plaintiffs never challenge whether the property is
actually in need of redevelopment, only whether the Defendants properly declared
it to be so. Such is not the making of a substantive due process claim.
Second, Plaintiffs challenge various actions of the Defendants as takings
without just compensation. The Takings Clause of the Fifth Amendment does not
prohibit valid governmental takings, but it does require that the government
provide just compensation for the property it takes. Consistent with Supreme
Court precedent, we have held that takings claims are not ripe until “(1) „the
government entity charged with implementing the regulations has reached a final
4
This may well be because SB expressed support for redevelopment in a letter to
the Redevelopment Agency (Borough App‟x at 2), but SB‟s motivations are not
5
decision regarding the application of the regulations to the property at issue‟ (the
„finality rule‟) and (2) the plaintiff has unsuccessfully exhausted the state‟s
procedures for seeking „just compensation,‟ so long as the procedures provided by
the state were adequate.” Cnty. Concrete Corp. v. Town of Roxbury, 442 F.3d 159,
164 (3d Cir. 2006) (quoting Williamson Cnty. Regional Planning Comm’n v.
Hamilton Bank, 473 U.S. 172, 186, 194-95 (1985)). The latter rule, requiring
exhaustion of state remedies, applies regardless of whether the takings claim is
facial or as-applied to a particular property. See Cnty. Concrete, 442 F.3d at 168.
For the purpose of this opinion, we will assume (without deciding) that SB
has properly alleged a taking of its property. SB does not allege that it has
exhausted or even attempted to exhaust state procedures for seeking just
compensation. Rather, it asserts that New Jersey‟s procedures for seeking just
compensation are clearly inadequate and that pressing its claim in a state forum
would be futile. We disagree.
As the District Court properly concluded, New Jersey provides an avenue of
redress for property owners seeking just compensation. According to the
Appellate Division of the New Jersey Superior Court, “an appropriation of
property by a governmental entity or private corporation having the power of
eminent domain without its having undertaken to condemn or pay compensation
relevant to our holding. 6
for the taking, can be redressed by the owner‟s action in the nature of Mandamus
to compel institution of condemnation proceedings.” In re N.J. Cent. Power &
Light Co., 400 A.2d 128, 129 (N.J. Super. Ct. App. Div. 1979). Plaintiffs make no
attempt to distinguish this case, on which the District Court relied. Plaintiffs do
point to cases where litigation failed to yield compensation for the parties involved,
but this does not make the available remedy inadequate. Because we conclude that
the remedies available under New Jersey law are adequate and the Plaintiffs have
failed to exhaust their options in the New Jersey courts, they cannot satisfy the
second prong of the test from County Concrete. Therefore, it is not necessary to
examine the first prong.
Finally, as the District Court properly dismissed the federal claims, it was
well within its discretion to decline to exercise supplemental jurisdiction over
Plaintiffs‟ state law claims. See Borough of W. Mifflin v. Lancaster, 45 F.3d 780,
788 (3d Cir. 1995).
We will affirm.
7