Ballantyne Village Parking v. City of Charlotte ( 2020 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-1213
BALLANTYNE VILLAGE PARKING, LLC,
Plaintiff - Appellant,
v.
CITY OF CHARLOTTE,
Defendant - Appellee.
Appeal from the United States District Court for the Western District of North Carolina, at
Charlotte. Graham C. Mullen, Senior District Judge. (3:19-cv-00036-GCM)
Argued: May 13, 2020 Decided: June 17, 2020
Before THACKER, QUATTLEBUAM, and RUSHING, Circuit Judges.
Vacated by unpublished per curiam opinion.
ARGUED: William Robert Terpening, TERPENING LAW, PLLC, Charlotte, North
Carolina, for Appellant. Thomas Edward Powers, III, CITY ATTORNEY’S OFFICE FOR
THE CITY OF CHARLOTTE, Charlotte, North Carolina, for Appellee. ON BRIEF:
Daniel J. Prichard, TERPENING LAW, PLLC, Charlotte, North Carolina, for Appellant.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Ballantyne Village Parking, LLC (“Appellant”) claims the City of Charlotte
(“Appellee”) wrongfully deprived it of due process of law in the issuance of a building
permit associated with a shopping center in Charlotte, North Carolina. Citing Burford v.
Sun Oil Co., 319 U.S. 315 (1943), the district court concluded abstention principles
required dismissal. On appeal, Appellant contends the district court abused its discretion
when it applied Burford and dismissed the case.
Because multiple ongoing interrelated disputes render this appeal unripe, we vacate
the district court’s order and remand the case for dismissal on justiciability grounds.
I.
This case involves three distinct, but related, legal disputes: (1) an arbitration
proceeding over a contested easement agreement; (2) this federal suit alleging violations
of constitutional guarantees of due process; and (3) the appeal of a building permit obtained
through city administrative processes.
A.
The Contested Parking Spaces in the Easement Dispute
When Appellant filed the complaint at issue, it owned a parking lot (“Parcel 3”) and
a parking deck (“Parcel 4”) adjacent to a shopping center (“Parcel 1”) owned by a third
party, ASVRF SP Ballantyne Village JV LLC (“ASVRF”). As the shopping center was
originally planned, ASVRF had fewer parking spaces on Parcel 1 than required by the
city’s zoning code. As a result, in 2015, ASVRF obtained an easement from Appellant for
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the use of parking spaces on Parcel 4 in an amount at least equal to the minimum number
needed for ASVRF to comply with the city’s zoning requirements.
In 2017, ASVRF sought to convert part of Parcel 1 into office space, which would
expand the square footage of the shopping center. Per the city’s zoning code, this
expansion would require Parcel 1 to gain access to an additional 83 parking spaces.
ASVRF’s construction of the office space was contingent on receipt of a building permit
from Appellee, and in turn, this permit was conditioned on Parcel 1 having access to the
requisite additional parking spaces. ASVRF believed the 2015 easement it had previously
obtained from Appellant automatically entitled it to use 83 additional spaces on Parcel 4.
But Appellant maintained that, in order for ASVRF to acquire access to the additional
parking spaces, further consideration was required from ASVRF.
The relevant easement agreement provides for a two-step process to resolve this
dispute -- an initial determination by an “ombudsman” and subsequent arbitration. If
timely appealed to an arbitrator, the ombudsman’s decision is nonbinding and nonfinal.
ASVRF and Appellant submitted their easement dispute to the ombudsman in July 2018.
In September 2018, the ombudsman decided the easement dispute in favor of ASVRF’s
entitlement to additional parking. ASVRF’s attorney notified Appellee of this
determination. In turn, the following week, Appellee issued a permit to ASVRF. Still,
Appellee reserved the right to revoke the permit if it later determined that Parcel 1 lacked
access to the adequate number of parking spaces.
Appellant timely appealed the ombudsman’s decision to an arbitrator, thus
rendering the ombudsman decision nonbinding and nonfinal. Following arbitration in the
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fall of 2019, the arbitrator issued a decision, a decision which Appellant indicates still did
not fully resolve the easement dispute, and which both parties have indicated only
generated further disputed issues. 1 The parties indicate that the arbitrator’s determination
has yet to be confirmed in Mecklenburg County Superior Court and would be appealable
to the North Carolina Court of Appeals pursuant to North Carolina General Statutes section
1-569.28. 2
B.
The Due Process Claims in Federal Court
In the complaint underlying this appeal, Appellant avers that, while it was
attempting to resolve the easement dispute with ASVRF through the prescribed procedures,
ASVRF -- unbeknownst to Appellant -- had been communicating with Appellee and urging
Appellee’s planning personnel to move forward with the permit’s issuance despite the
ongoing dispute. Appellant further states that, upon learning of the ongoing discussion
between ASVRF and Appellee, Appellant reached out to Appellee and asserted its interest
in the permit proceeding due to the potential demand for parking on its lot. Appellant
expressly asked Appellee to be included on all further communications associated with the
1
In a written award issued December 17, 2019, the arbitrator decided ASVRF is
“entitled to access and use parking spaces on [Parcel] 4 provided that they are necessary to
meet all governmental zoning and building requirements for [Parcel] 1 and only after
[ASVRF] ha[s] exhausted all measures of creating parking spaces that are currently in
existence on [Parcel] 1.” Appellant’s Suppl. Br. Ex. C, at 3–4.
2
North Carolina General Statutes section 1-569.28 provides in relevant part that
“[a]n appeal may be taken from . . . [a]n order confirming or denying confirmation of an
[arbitration] award.” N.C. Gen. Stat. § 1-569.28(a)(3).
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permit. Appellant alleges that, despite this request, it was not included in key
communications between Appellee and ASVRF. Appellant contends that Appellee issued
the permit to ASVRF based on ASVRF’s assurance that it was entitled to the additional
parking on Parcel 4 per the ombudsman’s decision, even though the easement dispute was
headed to arbitration, and the ombudsman decision was therefore nonbinding. Appellant
contends that its exclusion from the permitting process led to the purportedly wrongful
issuance of ASVRF’s permit.
Troubled by its exclusion from the permitting process, Appellant filed the instant
case in the Western District of North Carolina. Appellant asserted the following eight
claims for relief: (1) denial of substantive due process; (2) denial of procedural due process;
(3) an equal protection violation; (4) negligence based on Appellee’s alleged breach of its
duty to provide its citizens with due process; (5) negligence based on Appellee’s alleged
breach of its obligations to follow its own zoning and planning restrictions; (6) declaratory
judgment; (7) preliminary injunction; and (8) permanent injunction.
In the district court proceedings, Appellant moved for a preliminary injunction, and
Appellee moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2), (4), (5)
and (7). In its response in opposition to the preliminary injunction motion, Appellee
asserted that the district court should decline to exercise jurisdiction because the local
zoning issues involved in the case implicate the abstention doctrine recognized in Burford
v. Sun Oil Co., 319 U.S. 315 (1943).
Pursuant to Burford, federal courts may, in their discretion, abstain from exercising
jurisdiction over certain cases involving state and local issues “when the availability of an
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alternative, federal forum threaten[s] to frustrate the purpose of a state’s complex
administrative system.” Martin v. Stewart, 499 F.3d 360, 364 (4th Cir. 2007) (citing
Burford, 319 U.S. at 331–32). Focusing on the local aspects of the case, the district court
agreed with Appellee and decided to abstain. Accordingly, the district court dismissed
Appellant’s federal claims without prejudice, declined to exercise supplemental
jurisdiction over its state law claims, and likewise dismissed the state claims without
prejudice. As a result, the district court denied the motions for preliminary injunction and
to dismiss as moot. Appellant timely appealed.
C.
The Permitting Dispute in the Zoning Appeals Process
In addition to its easement dispute and the instant federal case, Appellant initiated a
direct appeal of Appellee’s permitting decision through Charlotte’s administrative
processes on October 26, 2018.
North Carolina law provides for appeals of zoning and permitting decisions first to
a city’s Zoning Board of Adjustment (“ZBA”), and then through judicial review via the
state court system. See N.C. Gen. Stat. § 160A-388. Appellant’s ZBA appeal was set to
be heard on January 29, 2019, but the ZBA stayed its proceedings in response to
Appellant’s January 24, 2019 filing of its federal suit. 3
3
At oral argument, the parties represented that the ZBA proceedings would remain
stayed until the conclusion of both this litigation and the resolution of the easement dispute.
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II.
As summarized above, Appellant is embroiled in three separate, ongoing disputes:
(1) the easement dispute which is yet to be confirmed in state court; (2) this federal lawsuit
alleging due process violations; and (3) the permitting dispute on appeal to the ZBA, which
is currently stayed as a result of this federal lawsuit. Because the outcomes of the other
two disputes have as-yet unrealized implications for the federal suit before us, we conclude
that we lack subject matter jurisdiction over this appeal.
A.
Ripeness is an issue of subject matter jurisdiction. South Carolina v. United States,
912 F.3d 720, 730 (4th Cir. 2019) (citation omitted). “The ripeness doctrine is drawn both
from Article III limitations on judicial power and from prudential reasons for refusing to
exercise jurisdiction . . . .” Nat’l Park Hosp. Ass’n v. Dep’t of Interior, 538 U.S. 803, 808
(2003) (internal quotation marks omitted). This threshold consideration is “designed to
prevent the courts, through avoidance of premature adjudication, from entangling
themselves in abstract disagreements over administrative policies,” and, where parallel
administrative processes are involved, “protect the agencies from judicial interference until
an administrative decision has been formalized and its effects felt in a concrete way by the
challenging parties.” Id. (internal quotation marks omitted).
By requiring presentation of a controversy in a “clean-cut and concrete form,”
ripeness doctrine ensures that we only reach questions “when the action is final and not
dependent on future uncertainties or intervening . . . rulings.” South Carolina, 912 F.3d at
730 (internal quotation marks omitted). We decide whether a claim is ripe by assessing
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“(1) the fitness of the issues for judicial decision and (2) the hardship to the parties of
withholding court consideration.” Nat’l Park Hosp. Ass’n, 538 U.S. at 808 (citation
omitted). “[A] case is fit for judicial decision when the issues are purely legal and when
the action in controversy is final and not dependent on future uncertainties.” Lansdowne
on the Potomac Homeowners Ass’n, Inc. v. OpenBand at Lansdowne, LLC, 713 F.3d 187,
198 (4th Cir. 2013) (internal quotation marks omitted). Hardship “is measured by the
immediacy of the threat and the burden imposed on the plaintiff” if judicial consideration
is withheld. Id. at 199 (internal quotation marks omitted).
B.
1.
Fitness for Judicial Decision
At this juncture, both of Appellant’s other ongoing disputes -- the easement dispute
and the zoning dispute -- preclude resolution of Appellant’s third dispute, the instant
federal case.
a.
First, a legal determination that the easement entitles ASVRF to the contested
parking spaces is bound to affect the viability of Appellant’s constitutional claims at issue
here -- that is, Appellant’s claimed right of access to the permitting process hinges on the
existence of a legal interest in the disputed 83 spaces. If the easement decision is that
ASVRF instead rightfully could claim those parking spaces, Appellant will have been
adjudged to lack the property interest it claims was harmed by Appellee’s actions.
Therefore, without knowing whether Appellant did in fact possess a right to the contested
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parking spaces, we are being asked to answer the hypothetical question of whether there
was a due process violation if in fact Appellant had a right to the spaces it claims. The
arbitration’s outcome with regard to the claimed easement -- which has yet to be confirmed
in state court, and which could be contested therein -- threatens to substantially undermine
Appellant’s claimed property interest and therefore its claimed right of access to the
permitting process purportedly affecting that interest.
The issues before us therefore are not “purely legal” because the ownership of the
contested spaces remains in dispute. Lansdowne, 713 F.3d at 198. Thus, the instant case
is not fit for judicial decision at this time because the ongoing easement dispute prevents
us from knowing whether Appellant is entitled to the property interest it claims, and “[w]e
may not pass upon hypothetical matters.” Artway v. Atty. Gen. of New Jersey, 81 F.3d
1235, 1248 (3d Cir. 1996).
b.
Appellant appealed the building permit to the ZBA, and that appeal and any further
appeal therefrom could result in modification or revocation of the permit. Appellant’s
claimed injury is that the building permit Appellee issued “completely devalued
[Appellant’s] parking deck.” Appellant’s Br. 1. But the building permit as it exists now is
already conditional because Appellee reserved the right to revoke the permit if it
determines ASVRF lacks the requisite number of parking spaces. And Appellant itself
argues that the permit could (and should) be revoked through the ZBA appeal as being
inconsistent with Appellee’s zoning requirements and procedures.
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The finality requirement of our ripeness doctrine requires us to consider “whether
the initial decisionmaker has arrived at a definitive position on the issue that inflicts an
actual, concrete injury . . . .” Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank
of Johnson City, 473 U.S. 172, 193 (1985), overruled on other grounds by Knick v. Twp.
of Scott, 139 S. Ct. 2162 (2019). Although we do not ignore the fact that Appellant claims
past injury from the issuance of the existing permit and that this injury would not be negated
should the permit be revoked, we cannot move forward on this aspect of Appellant’s case
while the status of the injury-causing permit is still debated. This is precisely the kind of
“premature adjudication” the Supreme Court’s ripeness decisions counsel us to avoid.
Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967), abrogated on other grounds by
Califano v. Sanders, 430 U.S. 99 (1977).
2.
Hardship
Turning to the hardship prong, we fail to see how delay of our decision places
Appellant in the kind of “direct and immediate” dilemma that motivates this aspect of the
ripeness inquiry. See Abbott Labs, 386 U.S. at 152. To the extent Appellant’s injury is not
wholly speculative, that is, does not entirely hinge on the easement dispute’s resolution in
its favor and on the finality of the building permit, any injury has already occurred. Indeed,
Appellant repeatedly stresses that its past exclusion from Appellee’s permitting process
constitutes the violation in this case. But, of note, Appellant appears to have been afforded
the opportunity to contest the permit decision as “a person aggrieved” per Appellee’s
zoning procedures. See Appellant’s Suppl. Br. Ex. A, at 5. Therefore, if Appellee violated
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Appellant’s right to due process in excluding it from predecisional permitting discussions,
we will be no less able to evaluate that alleged injury once the uncertainties in this case
have been resolved. In the meantime, Appellant is not suffering a present injury from any
future contemplated event such that our action is required at this time to avoid an immediate
threat to Appellant’s interests. 4
III.
“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 (2006). If the easement dispute is ultimately resolved in Appellant’s favor
or the building permit does indeed become final through the zoning appeals process, the
door to federal court will remain open. But for now, until those determinations come to
pass, we cannot exercise jurisdiction over the federal claims resting on Appellant’s
projected -- but as yet unrealized -- outcomes in these other disputes.
We therefore vacate the district court’s order citing Burford abstention and remand
for resolution consistent with this opinion.
VACATED
4
We note that Appellant has since sold the parking spots at issue to a third party.
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