Jeffrey S. Aaron v. City of St. Louis MO , 357 F.3d 768 ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
Nos. 03-2825/2827
___________
Jeffrey S. Aaron, an individual *
residing in Florida, as the trustee *
of a New York revocable trust, *
Sylvia H. Aaron; ADTAR, L.L.C., a *
Delaware limited liability company; *
Hampton Village Associates, L.L.C., *
a New York limited liability company *
and successor-in-interest to the Estate *
of Louis Feil, *
*
Plaintiffs/Appellees, *
*
v. * Appeals from the United States
* District Court for the
Target Corporation, formerly known * Eastern District of Missouri.
as Target Stores, Inc., formerly known *
as Dayton Hudson Corporation, a *
Minnesota corporation, *
*
Defendant/Appellant, *
*
City of St. Louis, MO, a Missouri *
municipal corporation; The Land *
Clearance for Redevelopment *
Authority of the City of St. Louis, a *
Missouri municipal corporation, *
*
Defendants/Appellants. *
___________
Submitted: October 20, 2003
Filed: February 3, 2004
___________
Before MURPHY, BOWMAN, and MELLOY, Circuit Judges.
___________
MURPHY, Circuit Judge.
Jeffrey S. Aaron, ADTAR, and Hampton Village Associates1 brought this
action under 42 U.S.C. § 1983 against Target Corporation, the City of St. Louis, and
the Land Clearance for Redevelopment Authority of the City of St. Louis
(Redevelopment Authority). Plaintiffs sought to enjoin condemnation proceedings
involving their property, which they allege was to be taken for a private use. The
district court granted a temporary restraining order (TRO) and later converted it sua
sponte into a preliminary injunction, enjoining defendants from taking ownership,
possession, or control of the subject property and from going forward with
condemnation proceedings in state court. Target, the city, and the Redevelopment
Authority appeal from the order for preliminary injunction.2 We reverse.
I.
The property which is the subject of the condemnation proceeding is located
at the intersection of Hampton and Chippewa Avenues in St. Louis, Missouri.
1
Plaintiff Jeffrey S. Aaron, is a resident of Florida and trustee of the Sylvia H.
Aaron Revocable Trust, a New York revocable trust. The trust is a tenant in common
with ADTAR, a Delaware limited liability company with its principal place of
business in New York. Each owns an undivided fifty percent interest in both the
building in which the Target store is located and the ground on which the building is
situated. Hampton Village Associates is a New York limited liability company and
the successor in interest to the Estate of Louis Feil, owner of two parcels that Target
leases for parking.
2
The Redevelopment Authority and the City of St. Louis filed their notice of
appeal on July 16, 2003 from the preliminary injunction issued on July 8, 2003; their
appeal was docketed as No. 03-2825. Target's appeal from the injunction was filed
the same day and was docketed as No. 03-2827. We have jurisdiction over the
appeals under 28 U.S.C. § 1292(a)(1).
2
Appellees own the building which houses a Target store and the property on which
it and the adjoining parking lots are located. Target Corporation entered into a long
term lease with them in October 1974 for a period of twenty five years, with five
renewal options of five years each. The lease covers a store building which was
previously leased to Arlans Department Stores, Inc., a discount retailer. Target
agreed to maintain the property and its improvements and had the right to make
alterations, additions, or changes to the building.
In March 2002 Target contacted the owners about its interest in replacing what
it regarded as an obsolete store with a larger facility. Target proposed to demolish the
existing store and to build a new one. In May 2002 appellees responded that they
were not opposed to demolition of the existing store, but they wanted more rent, to
be partially based on sales at the new facility. No further proposals were exchanged,
and no agreement was reached.
Alderman James Shrewsbury represents the ward in which the property is
located. He became concerned in September 2002 that Target would close its store
if the property owners would not agree to terms it considered acceptable, and he
initiated discussions with Target. He also raised the possibility of using the city's
eminent domain power to facilitate redevelopment of the property, and he asked the
Redevelopment Authority to conduct a study to determine whether the property was
blighted. The Redevelopment Authority hired a private consulting company, PGAV
Urban Consulting (PGAV), to analyze the property. PGAV prepared a Qualifications
Analysis (PGAV Study) which was issued on October 26, 2002. The study found that
the property was physically deteriorated, unsafe, and dangerous and concluded that
3
it was "blighted"3 or "insanitary"4 within the meaning of Chapter 99 of the Revised
Statutes of Missouri.
A public hearing was scheduled for November 20, 2002, at which the St. Louis
City Board of Aldermen would consider the PGAV Study. The study had been
introduced by Alderman Shrewsbury as Board Bill No. 303 to initiate condemnation
proceedings for the property. He believed that Target's redevelopment would benefit
his ward and the city as a whole. The city sent written notice of the public hearing
to the Aaron Trust and ADTAR, care of Target's Minneapolis headquarters which was
the address on file for the property at the assessor's office. Notice of the hearing was
also placed in the St. Louis Post Dispatch, but apparently the only plaintiff actually
receiving notice before the November 20 hearing was Hampton Associates, which
declined to attend. The Board of Aldermen passed Board Bill No. 303 on
December 6, 2002, and it later became Ordinance 65741.
3
"Blighted area", an area which, by reason of the predominance of defective or
inadequate street layout, insanitary or unsafe conditions, deterioration of site
improvements, improper subdivision or obsolete platting, or the existence of
conditions which endanger life or property by fire and other causes, or any
combination of such factors, retards the provision of housing accommodations or
constitutes an economic or social liability or a menace to the public health, safety,
morals, or welfare in its present condition and use. Mo. Rev. Stat. § 99.320(3)
(2003).
4
"Insanitary area", an area in which there is a predominance of buildings and
improvements which, by reason of dilapidation, deterioration, age or obsolescence,
inadequate provision for ventilation, light, air sanitation or open spaces, high density
of population and overcrowding of buildings, overcrowding of land, or the existence
of conditions which endanger life or property by fire and other causes, or any
combination of such factors, is conducive to ill health, transmission of disease, infant
mortality, juvenile delinquency and crime or constitutes an economic or social
liability and is detrimental to the public health, safety, morals, or welfare. Mo. Rev.
Stat. § 99.320(9) (2003).
4
The Redevelopment Authority published notices in the St. Louis Post Dispatch
on December 7 and 11, seeking redevelopment proposals for the property. Only
Target submitted a proposal, and the Redevelopment Authority selected Target as the
redeveloper on December 17, 2002. Attorneys for the property owners first appeared
to oppose condemnation of their property at the December 17 meeting of the
Redevelopment Authority.
On December 21, 2002, the St. Louis mayor signed Ordinance 65741. The
ordinance declared the subject property blighted, approved Target's redevelopment
proposal, authorized the Redevelopment Authority to acquire the property by eminent
domain, and authorized a tax abatement for Target. The Redevelopment Authority
and Target then entered into a Redevelopment Agreement on January 12, 2003, which
officially granted Target redevelopment rights over the property. On January 28,
2003, the board of the Redevelopment Authority met to discuss the use of its eminent
domain power to acquire the property. Representatives of the property owners
appeared and raised objections, but the board approved the use of eminent domain for
the property.
Before initiating a condemnation action in state court, the Redevelopment
Authority made an offer on March 27, 2003 to purchase the property from the owners,
as required by state eminent domain law. See Res. No. 03-LCRA-7341E; see also
Mo. Rev. Stat. § 99.460 (2003). The offer totaled $3.79 million and was based on an
independent real estate appraisal. The property owners were informed that the offer
would remain open until April 10, 2003, but they never responded to it. Instead, they
filed this § 1983 action on April 4 and a preliminary injunction motion on April 10,
2003.
The Redevelopment Authority filed a condemnation action against the property
owners and Target in the Circuit Court of the City of St. Louis on April 23, 2003. A
trial was initially set in the circuit court for May 27, but it was later rescheduled to
June 25, 2003 because the property owners requested a change in judge. On May 20
5
the property owners requested expedited discovery in the condemnation action, and
on May 21 they moved to dismiss the eminent domain case on the basis that the
taking was for a private purpose. A discovery schedule was set by the circuit court
on June 11; it gave the parties two weeks for production of public records and for
seven depositions. A protective order was also issued.
On June 9, 2003, the property owners moved for a TRO in federal court. The
Redevelopment Authority and Target submitted memoranda in opposition to the TRO
on June 17, which included an argument for abstention. The district court set the
motion for hearing on June 24, 2003, the day before the state condemnation trial was
to begin. The parties argued their positions at the hearing, but they did not call
witnesses or offer other evidence. At the hearing the district court stated that it would
grant a TRO to "give myself some time to look at this matter because I'm not sure
about it." A written order was issued the same day, restraining appellants from taking
the plaintiffs' property and from pursuing the state court condemnation action. The
court stated that the property owners had shown they were likely to succeed on their
constitutional claims, that defendants had acted in concert to take their property for
purely private use, and that they faced irreparable harm. The TRO provided that it
would remain in "full force and effect until such time as the matter of a permanent
injunction is heard by the Court, or this dispute is otherwise finally resolved."
The parties furnished additional materials to the district court on June 30, 2003,
including affidavits and memoranda in which appellants elaborated on their argument
that the court should abstain in favor of the state eminent domain proceedings. The
district court issued a written memorandum and order on July 3, 2003 "to more fully
set out the Court's decision in granting the motion for temporary restraining order."
In addition to discussing the factors for injunctive relief under Dataphase Sys., Inc.
v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc), the court gave its
reasons for declining to abstain from exercising jurisdiction. Aaron v. Target Corp.,
269 F. Supp. 2d 1162, 1170-73 (E.D. Mo. 2003). Then on July 8, 2003, without
advance notice to the parties or further hearing, the district court sua sponte converted
6
the TRO into a preliminary injunction "which shall remain in effect pending a final
decision on the merits or further order of the Court." The short order incorporated the
court's memorandum and order of July 3 by reference and simply stated that the court
had concluded that the TRO should be converted to a preliminary injunction.
In explaining its decision not to abstain the court stated that "there was no
ongoing state judicial proceeding until after this case was initiated and plaintiffs'
motion for preliminary injunction was filed," and that filing of that motion
"commenced proceedings on the merits in this case." Id. at 1171. The court went on
to conclude that "plaintiffs do not have an adequate opportunity to litigate their
constitutional claims in the state court proceeding," because it was summary in
nature, with limited scope and duration of discovery, and did not permit
counterclaims or crossclaims. Id. at 1171-72. "Perhaps most importantly" the court
concluded, this is a case fitting the bad faith exception to the Younger doctrine. Id.
at 1172.
The court's order on July 8 converting the TRO into a preliminary injunction
did not itself recite what it enjoined. Rather, it referred to the content of its July 3
memorandum and order which stated its reasons for the TRO and enjoined Target, the
city, and the Redevelopment Authority from taking ownership, possession, or control
of the federal plaintiffs' property pursuant to City Ordinance 65741 and from
initiating or pursuing any condemnation or other proceeding in the state courts
seeking to take ownership, possession, or control of the property.
Target, the city, and the Redevelopment Authority appeal from the preliminary
injunction issued on July 8, 2003. They contend that the district court should have
abstained under the Younger doctrine, that this case is not ripe, that the property
owners did not make a sufficient showing for an injunction under Dataphase, and that
the court's sua sponte conversion of the TRO into a preliminary injunction without
notice or hearing violated Fed. R. Civ. P. 65(a)(1). The property owners respond that
the district court did not abuse its discretion by refusing to abstain or by granting the
7
preliminary injunction. They maintain this case is ripe and also seek to raise a new
argument on appeal––that a federal court need not abstain for state judicial review of
legislative and administrative action, citing New Orleans Pub. Serv., Inc. v. City of
New Orleans [NOPSI], 491 U.S. 350 (1989).
II.
A district court has broad discretion when ruling on a request for preliminary
injunction, and it will be reversed only for clearly erroneous factual determinations,
an error of law, or an abuse of its discretion. United Indus. Corp. v. Clorox Co., 140
F.3d 1175, 1179 (8th Cir. 1998). A district court's abstention decision is also
reviewed for abuse of discretion, but the underlying legal determinations receive
plenary review. Cedar Rapids Cellular Tel., L.P. v. Miller, 280 F.3d 874, 878 (8th
Cir. 2002) (citing Beavers v. Arkansas State Bd. of Dental Exam'rs, 151 F.3d 838,
840 (8th Cir. 1998)). The abuse of discretion standard means that a court has a "range
of choice, and that its decision will not be disturbed as long as it stays within that
range and is not influenced by any mistake of law." Verizon Communications, Inc.
v. Inverizon Int'l, Inc., 295 F.3d 870, 873 (8th Cir. 2002) (citing Kern v. TXO Prod.
Corp., 738 F.2d 968, 970 (8th Cir. 1984)). An abuse of discretion occurs if a relevant
factor that should have been given significant weight is not considered, if an
irrelevant or improper factor is considered and given significant weight, or if a court
commits a clear error of judgment in the course of weighing proper factors. Id.
The threshold question in this case is whether the district court abused its
discretion by declining to abstain and instead proceeding to enjoin the parties from
going forward with the eminent domain action. Under Younger v. Harris, 401 U.S.
37 (1971), federal courts should abstain from exercising jurisdiction in cases where
equitable relief would interfere with pending state proceedings in a way that offends
principles of comity and federalism. Accord Night Clubs, Inc. v. City of Fort Smith,
163 F.3d 475 (8th Cir. 1998). The motivating force behind Younger abstention is the
promotion of comity between state and federal judicial bodies. See Cedar Rapids
8
Cellular, 280 F.3d at 881. The Younger doctrine was originally applied to state
criminal proceedings, see, e.g., Hicks v. Miranda, 422 U.S. 332 (1975), and later
extended to civil cases. See, e.g., Moore v. Sims, 442 U.S. 415 (1979) (child abuse
litigation); Trainor v. Hernandez, 431 U.S. 434, 444 (1977) (welfare fraud action);
Huffman v. Pursue, Ltd., 420 U.S. 592, 594 (1975) (obscenity regulation).
In Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423,
432 (1982), the Supreme Court identified several factors that should lead to
abstention under Younger: (1) the existence of an ongoing state judicial proceeding,
(2) which implicates important state interests, and (3) which provides an adequate
opportunity to raise constitutional challenges. See also Silverman v. Silverman, 267
F.3d 788, 792 (8th Cir. 2001).
Whether there is an ongoing state judicial proceeding that would be disrupted
by the federal action is the first Middlesex inquiry. See Alleghany Corp. v.
McCartney, 896 F.2d 1138, 1143 (8th Cir. 1990). Permitting issues before a state
court to be litigated in a federal forum instead could be "quite costly" to the comity
and federalism interests which Younger seeks to protect. Huffman, 420 U.S. at 605-
06. See also Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 11 (1987); Yamaha Motor
Corp. v. Riney, 21 F.3d 793, 797-98 (8th Cir. 1994). Appellants argue that the
district court erred by not considering the actual status of the state eminent domain
proceedings and by applying a simple first filed rule. They contend that this federal
case was only in an embryonic stage at the time the state court action was initiated
and that the state eminent domain process had begun with the passage of Ordinance
65471 in December 2002. The property owners counter that no state judicial
proceedings were ongoing until almost two weeks after they filed for injunctive relief
in federal court on April 10, 2003.
There is no fixed requirement in the law that a state judicial proceeding must
have been initiated before the federal case was filed for abstention to be appropriate,
and a court should examine what has actually taking place in both settings to decide
9
whether to abstain. See C. Wright & A. Miller, 17A Federal Practice & Procedure
§ 4253 (2d ed. 1988) (commencement dates of the state and federal actions are less
significant than apparent right after Younger). Whether proceedings of substance
have taken place in either court is a key factor. In Hicks, for example, the Supreme
Court ruled that the federal court should have abstained even though its case was filed
before state criminal proceedings had been initiated. The reason was that no
proceedings of substance had yet occurred in federal court, and a failure to abstain
under such circumstances would "trivialize" Younger principles. Hicks, 422 U.S. at
350. See also Doran v. Salem Inn, Inc., 422 U.S. 922, 929 (1975) (abstention
warranted in first filed federal litigation where it was in embryonic stage with no
contested matter decided); Anderson v. Schultz, 871 F.2d 762, 764-65 (8th Cir. 1989)
(abstention appropriate where federal claim filed the same day as state charges). This
inquiry also applies in the civil context if important state interests are at stake. See
Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381 n.1 (1992) (noting
Younger's relevance to pending or about to be pending civil action involving
important state interests).
The condemnation proceeding against appellees' property had been initiated
under Chapter 99 of the Missouri statutes by passage of Ordinance 65471 on
December 6, 2002.5 See Mo. Rev. Stat. § 99.430.1(2) (2003). The subject property
5
The district court concluded that this had placed a cloud on the property
owners' interests presenting a justiciable question, that "takings claims are
cognizable" under § 1983, and that state procedures need not be pursued first, citing
McKenzie v. City of White Hall, 112 F.3d 313, 316-17 (8th Cir. 1997). McKenzie
was a very different case from the one here, however. The plaintiffs there sought
compensation for the physical taking of a buffer property and for the city's creation
of a nuisance and its denial of building permits and zoning approvals. We held that
the federal district court had properly dismissed the takings claim because plaintiffs
should have availed themselves of the state inverse condemnation procedure. The
constitutional claims in contrast were based on final decisions and could proceed.
Abstention was not an issue in McKenzie where there was no ongoing eminent
domain proceeding or pending state court action.
10
was declared to be blighted or insanitary and the Redevelopment Authority was
authorized to exercise its duties, powers, and functions, see Mo. Rev. Stat. §§ 99.300-
.660 (2003), to prepare and carry out plans of redevelopment and to determine a fair
sales price. See State ex rel. Dalton v. Land Clearance for Redev. Auth., 270 S.W.2d
44 (Mo. 1954). On January 28, 2003, the Redevelopment Authority's acquisition of
the subject property by the exercise of the power of eminent domain was authorized
in accordance with Mo. Rev. Stat. § 99.460. On March 27, 2003 the Redevelopment
Authority fulfilled its statutory duty to make a good faith offer to purchase appellees'
property.
State litigation was certain to follow if the property owners did not respond
affirmatively to the purchase offer.6 The property owners filed their federal complaint
on April 4, 2003, approximately a week before the expiration of the Redevelopment
Authority's purchase offer which was required by state law to remain open until April
10. See Mo. Rev. Stat. §§ 99.300, 99.420 (2003). They filed their preliminary
injunction motion in the district court on April 10, the last day on which they could
be sure no action would be started in the state court because the Redevelopment
Authority could not file suit until after its purchase offer had expired. See id. At that
time the eminent domain proceedings had been ongoing for more than five months,
and the property owners were on notice that state judicial proceedings were the next
stage of the process.
6
The Redevelopment Authority's letter to plaintiffs of March 27, 2003, stated:
"I am obliged to inform you that the [Redevelopment Authority] has been given the
power of eminent domain to acquire the Property should any discussions you wish to
initiate regarding the enclosed Contracts not result in a purchase. If we do not receive
a response to this offer from you by the stated time and date [April 10, 2003], the
[Redevelopment Authority] will assume that you have rejected its offer to purchase
and it will proceed to acquire the Property through the exercise of its power of
eminent domain."
11
Missouri law provides that eminent domain proceedings culminate in
condemnation actions in state court, and the state action here was filed by the
Redevelopment Authority on April 23, 2003. Trial was set for May 27 in the state
case, and the property owners filed two motions. On May 20 they moved for
expedited discovery, and on May 21 they filed a motion to dismiss on the merits. A
request by the property owners for a different judge delayed the state trial date to June
25, but in the meantime the state court ruled on permissible discovery, set deadlines,
and issued a protective order. The state eminent domain case was thus developing
for some six weeks after it was filed, while the property owners did not seek a TRO
from the federal court until June 9. Then on June 24 the federal district court halted
any further developments in the state case by issuing a TRO the day before the
continued trial was to begin. The injunction which is the subject of these appeals was
not issued until July 8, 2003, approximately eleven weeks after the state case had
been filed. At that point in time the substantive issues in the state court action could
have been well developed absent the federal TRO.
At the time the court issued its TRO on June 24 the only developments in
federal court had been the filing of motions for injunction and TRO and the TRO
hearing. The only further acts in this case before the injunction which is the subject
of these appeals were the submission of memoranda and affidavits and the court's
memorandum and order of July 3. The state action on the other hand had been
scheduled for trial the morning after the TRO was issued, and discovery and motions
had preceded. We conclude that the federal case was not really advanced in
"proceedings of substance on the merits." See Hicks, 422 U.S. at 337; id. at 353 n.1
(Stewart, J., dissenting) (TRO motion and response filed with twelve affidavits and
additional documents and TRO hearing did not commence "proceedings of substance
on the merits"). The Supreme Court's approach to the issue is illustrated in Doran,
where abstention was held necessary even though the federal district court had denied
a TRO and set a hearing date for a preliminary injunction motion before the state
action was started. 422 U.S. at 924-25.
12
In this case the district court concluded in its July 3 order incorporated into the
injunction order of July 8, that the mere filing of a preliminary injunction motion in
federal court on April 10 amounted to proceedings on the merits occurring before the
state action was filed on April 23.7 We disagree. We conclude that the district court
erred by concentrating on filing dates rather than by examining all the facts and
context of the two actions and by concluding that there was no ongoing state judicial
proceeding within the meaning of Middlesex.
The second Middlesex requirement is that the ongoing state proceeding involve
an important state interest. Eminent domain proceedings have long been recognized
as an important state interest. See Louisiana Power & Light Co. v. City of
Thibodaux, 360 U.S. 25, 28 (1959) (eminent domain is "intimately involved with
state prerogative"). See also Edwards v. Arkansas Power & Light Co., 683 F.2d
1149, 1156 (8th Cir. 1982) (important state interests in eminent domain proceedings
make abstention particularly appropriate). There is no dispute here that condemnation
proceedings meet this test, and the district court properly so held.
The third Middlesex factor is whether the state proceedings are adequate.
Appellants argue that the Missouri eminent domain proceedings are adequate because
7
The three cases cited by the district court to support its conclusion that there
was not an ongoing state proceeding are distinguishable. In our case condemnation
proceedings had been filed in state court and the parties had obtained a discovery
schedule and trial date when the injunction issued, whereas in Village of Belle Terre
v. Borass, 416 U.S. 1, 2 n.1 (1974), there had only been notice of a state ordinance
violation. In Cottonwood Christian Ctr. v. Cypress Redev. Agency, 218 F. Supp. 2d
1203, 1218 (C.D. Cal. 2002), the federal case was filed four months before the state
eminent domain action and work had progressed on the federal merits. The property
owners here may raise their constitutional claims in state court unlike the situation in
B.A.P., Inc. v. McCulloch, 994 F. Supp. 1131, 1137 (E.D. Mo. 1998), aff'd 170 F.3d
804 (8th Cir. 1999), where a First Amendment challenge to a statute with no
provision for a post seizure hearing could not be addressed in state court until
criminal charges were filed.
13
they provide sufficient discovery rights and permit the raising of all claims plaintiffs
assert in this federal action. The property owners disagree and argue that discovery
is limited in the state case in which they would be unable to raise all of their issues,
especially the claim that the private use taking was unconstitutional.
The argument that the state proceedings are inadequate because of limited
discovery is not persuasive. Missouri courts consider the purpose of requested
discovery and the circumstances of the case before deciding whether to permit
discovery at the initial stage of a condemnation proceeding. See State ex rel. Rantz
v. Sweeney, 901 S.W.2d 289, 292 (Mo. App. 1995). Discovery is allowed on whether
the state has the right to condemn a particular property, id. at 293, but reasonable
limits on discovery can prevent "a single objecting landowner [from delaying] the
commencement of [a] project for months or years by interrogatories, depositions,
discovery or dilatory practices." State ex rel. Missouri Highway & Transp. Comm'n
v. Anderson, 735 S.W.2d 350, 352 (Mo. banc 1987). The condemnation process is
designed to guarantee "the public early commencement of [a] project while
preserving to the individual landowners the right at a later date to extensively and
thoroughly litigate all issues relating to damages for the taking." Id. In this case, the
property owners were given up to two weeks to conduct discovery, the opportunity
to take seven depositions, and the right to obtain all of the Redevelopment Authority's
relevant and nonprivileged documents. They have not shown that their discovery
opportunities were inadequate or unreasonable.
Also relevant is whether the property owners would have an adequate
opportunity to raise their constitutional challenge in the state action. Under Missouri
law the circuit court must determine at the outset whether the condemnation is
authorized by state law, that is, whether there is jurisdiction over the condemnation
proceeding. Anderson, 735 S.W.2d at 352; State ex rel. Devanssay v. McGuire, 622
S.W.2d 323, 325 (Mo. App. 1981). This determination may involve an assessment
of whether there is constitutional, statutory, or ordinance authority for the exercise
of eminent domain, whether the taking is for a public use, and whether the
14
condemning authority complied with the conditions precedent to bringing the court
action. Devanssay, 622 S.W.2d at 325. The landowner's damages from the taking are
determined at a second stage when either side may request a jury trial, and the case
may be appealed after the damages phase is complete. Id.; Anderson, 735 S.W.2d at
352.
Since Missouri statutes and case law contemplate that constitutional challenges
will be raised as defenses to a condemnation, appellees will have an adequate
opportunity in the state condemnation proceedings to assert their claim that the taking
of their property is for a private use. See Glueck Realty Co. v. City of St. Louis, 318
S.W.2d 206 (Mo. 1958). Accord Lia v. Broadway/Olive Redev. Corp., 647 S.W.2d
189 (Mo. App. 1983) (allegations raised against a condemnation ordinance could also
be raised as defenses in any future condemnation action). There is an extensive body
of Missouri appellate cases deciding whether a taking is for a private purpose. See,
e.g., State ex rel. Clothier v. Yeaman, 465 S.W.2d 632 (Mo. banc 1971); State ex rel.
Gove v. Tate, 442 S.W.2d 541 (Mo. banc 1969); Annbar Assocs. v. West Side Redev.
Corp., 397 S.W.2d 635 (Mo. 1966). We conclude that the court erred in finding that
the property owners did not have an adequate opportunity to raise their principal
claim, that the taking is for a private use, in the state court eminent domain
proceedings.
Federal abstention in this case would permit Missouri's condemnation
procedures to run their course. Eminent domain is an appropriate tool to help
neighborhoods remain economically viable, attract industry, and encourage future
growth. See generally Dolan v. City of Tigard, 512 U.S. 374 (1994); Thomas Merrill,
The Economics of Public Use, 72 Cornell L. Rev. 61 (1986). Missouri has adequate
judicial procedures for consideration of the parties' competing interests. Land use
policy is an area in which federalism principles are particularly strong as we
recognized in Night Clubs, Inc., 163 F.3d at 481 (enforcement and application of
zoning ordinances and land use regulations is an important state and local interest).
15
We conclude that all the Middlesex factors are satisfied here and that the district court
erred in its conclusion that the state procedures are inadequate.
Even if the Middlesex factors are met, federal courts should not abstain under
Younger if "'bad faith, harassment, or some extraordinary circumstance . . . would
make abstention inappropriate.'" Night Clubs, Inc., 163 F.3d at 479 (quoting
Middlesex, 457 U.S. at 435). The district court concluded that the bad faith exception
applies here because the state court condemnation action did not result from a
legitimate legislative or municipal finding of blight, but rather from the defendants'
conspiring to take plaintiffs' property for a private use. Appellants argue the facts do
not fit the exception, while the property owners assert that appellants wrongfully
conspired to take their land for a private use.
While the Supreme Court has not ruled out use of the bad faith exception in
civil cases, see Huffman, 420 U.S. at 611, it has never directly applied the exception
in such a case, and we have only recognized it in the criminal context. See Lewellen
v. Raff, 843 F.2d 1103, 1109-10 (8th Cir. 1988). Such an exception must be
construed narrowly and only invoked in "extraordinary circumstances." Younger,
401 U.S. at 53-54. After studying the record, we conclude there was insufficient
evidence here to demonstrate "bad faith" or "extraordinary circumstances."8 As
explained in Moore, 442 U.S. at 433, intervention by federal courts in ongoing state
proceedings requires that the "circumstances must be 'extraordinary' in the sense of
8
Appellees presented evidence that Target proposed a renegotiation of the lease
but did not attempt to address the issue further after receiving their counterproposal;
Target told the city it might abandon the properties because it had been unable to
reach an agreement with the property owners as to a sale price but no discussions had
taken place between the parties; Target authored the PGAV Study, or at least the
critical part of it; Target presented a redevelopment plan for the properties without
their knowledge; and they received no notice of the hearing before the Board of
Aldermen on November 20, 2002 because the city sent the notice to the Aaron trust
and ADTAR in care of Target at its Minneapolis headquarters.
16
creating an extraordinary pressing need for immediate federal equitable relief, not
merely in the sense of presenting a highly unusual factual situation." The property
owners did not show that the bad faith or extraordinary circumstances exception to
the Younger doctrine is applicable.9
The property owners also seek to raise a new argument in support of the district
court's decision not to abstain. In an argument not raised below, they cite NOPSI,
491 U.S. at 368-70, for the proposition that federal courts need not defer to state
judicial review of legislative or administrative determinations. They argue that
eminent domain proceedings are inherently legislative in nature. Appellants counter
that they are inherently judicial and that NOPSI is inapplicable. Arguments and
issues raised for the first time on appeal are generally not considered, see Callantine
v. Staff Builders, Inc., 271 F.3d 1124, 1130 n.2 (8th Cir. 2001) (citing Tarsney v.
O'Keefe, 225 F.3d 929, 939 (8th Cir. 2000)), and no good reason has been advanced
to depart from that rule.10
9
We note that the property owners can seek to raise issues of bad faith in the
state court action. In a Missouri eminent domain action, a landowner can rebut the
presumption of validity of the public use determination by stating that the legislative
body acted "arbitrarily or was induced to act by fraud, collusion, or bad faith." State
ex rel. United States Steel v. Koehr, 811 S.W.2d 385, 389-90 (Mo. 1991).
10
Even if we were to consider this belated argument, it would not affect the
outcome. NOPSI involved a city council rate setting proceeding which the Supreme
Court found to be a legislative function. Missouri condemnation proceedings involve
both legislative and judicial functions at different stages, and the state court action
in which private property is condemned for a public use is judicial in nature. See,
e.g., State ex rel. Applegate v. Taylor, 123 S.W. 892 (Mo. 1909); St. Joseph v.
Truckenmiller, 81 S.W. 1116 (Mo. 1904); Thompson v. Chicago, Santa Fe &
California R.R. Co., 19 S.W. 77, 80 (Mo. 1892).
17
III.
After considering the arguments of the parties and the record on appeal, we
conclude that the district court erred in concluding that only one of the Middlesex
factors favored abstention and that the bad faith exception to Younger was applicable.
In the circumstances of this case it was an abuse of discretion for the district court not
to abstain and permit the state eminent domain action to go forward. It was likewise
an abuse of discretion for the court to exercise jurisdiction and to issue the
preliminary injunction.11
Accordingly, we reverse the district court's order enjoining the parties from
proceeding with the state eminent domain action and its decision not to abstain under
Younger. The case is remanded to the district court for vacation of its injunction and
for entry of an abstention order.
______________________________
11
Because of these conclusions, we need not address the other arguments raised
by appellants, but there is an outstanding motion. Shortly before oral argument,
appellees moved to correct misstatements of the appellate record and to take judicial
notice of City of St. Louis Board Bill No. 303. We have considered the arguments
raised in support of the motion along with the record on appeal and now deny the
motion as moot.
18