Town of Chester v. Laroe Estates, Inc. ( 2017 )

(Slip Opinion) OCTOBER TERM, 2016 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
TOWN OF CHESTER, NEW YORK v. LAROE ESTATES,
INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SECOND CIRCUIT
No. 16–605. Argued April 17, 2017—Decided June 5, 2017
Land developer Steven Sherman paid $2.7 million to purchase land in
the town of Chester (Town) for a housing subdivision. He also sought
the Town’s approval of his development plan. About a decade later,
he filed this suit in New York state court, claiming that the Town had
obstructed his plans for the subdivision, forcing him to spend around
$5.5 million to comply with its demands and driving him to the brink
of personal bankruptcy. Sherman asserted, among other claims, a
regulatory takings claim under the Fifth and Fourteenth Amend-
ments. The Town removed the case to a Federal District Court,
which dismissed the takings claim as unripe. The Second Circuit re-
versed that determination and remanded for the case to go forward.
On remand, real estate development company Laroe Estates, Inc. (re-
spondent here), filed a motion to intervene of right under Federal
Rule of Civil Procedure 24(a)(2), which requires a court to permit in-
tervention by a litigant that “claims an interest related to the proper-
ty 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 im-
pede the movant’s ability to protect its interest, unless existing par-
ties adequately represent that interest.” Laroe alleged that it had
paid Sherman more than $2.5 million in relation to the development
project and the subject property, that its resulting equitable interest
in the property would be impaired if it could not intervene, and that
Sherman would not adequately represent its interest. Laroe filed, in-
ter alia, an intervenor’s complaint asserting a regulatory takings
claim that was substantively identical to Sherman’s and seeking a
judgment awarding Laroe compensation for the taking of Laroe’s in-
terest in the property at issue. The District Court denied Laroe’s mo-
2 TOWN OF CHESTER v. LAROE ESTATES, INC.
Syllabus
tion to intervene, concluding that its equitable interest did not confer
standing. The Second Circuit reversed, holding that an intervenor of
right is not required to meet Article III’s standing requirements.
Held:
1. A litigant seeking to intervene as of right under Rule 24(a)(2)
must meet the requirements of Article III standing if the intervenor
wishes to pursue relief not requested by a plaintiff. To establish Ar-
ticle III standing, a plaintiff seeking compensatory relief must have
“(1) suffered an injury in fact, (2) that is fairly traceable to the chal-
lenged conduct of the defendant, and (3) that is likely to be redressed
by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U. S.
___, ___. The “ plaintiff must demonstrate standing for each claim he
seeks to press and for each form of relief that is sought.” Davis v.
Federal Election Comm’n, 554 U. S. 724, 734 (internal quotation
marks omitted). 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. That principle also applies to in-
tervenors of right: 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 addi-
tional relief beyond that requested by the plaintiff. That includes
cases in which both the plaintiff and the intervenor seek separate
money judgments in their own names. Pp. 4–6.
2. The Court of Appeals is to address on remand the question
whether Laroe seeks different relief than Sherman. If Laroe wants
only a money judgment of its own running directly against the Town,
then it seeks damages different from those sought by Sherman and
must establish its own Article III standing in order to intervene. The
record is unclear on that point, and the Court of Appeals did not re-
solve that ambiguity. Pp. 6–8.
828 F. 3d 60, vacated and remanded.
ALITO, J., delivered the opinion for a unanimous Court.
Cite as: 581 U. S. ____ (2017) 1
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
_________________
No. 16–605
_________________
TOWN OF CHESTER, NEW YORK, PETITIONER v.
LAROE ESTATES, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[June 5, 2017]
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
2 TOWN OF CHESTER v. LAROE ESTATES, INC.
Opinion of the Court
F. 3d 554, 557 (CA2 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 regula-
tory 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 regula-
tory takings claim under the Fifth and Fourteenth
Amendments. See App. 98–122. The Town removed the
case to a Federal District Court, which dismissed Sher-
man’s takings claim as unripe. Opinion and Order in No.
1:12–cv–00647 (SDNY), Dkt. 14, p. 25. The Court of Ap-
peals for the Second Circuit reversed the ripeness deter-
mination and remanded for the case to go forward. Ches-
ter, supra, at 557.1
On remand, real estate development company Laroe
Estates, Inc. (the respondent here) filed a motion to inter-
vene 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
——————
1 Sherman died in 2013, and his estate replaced him as the plaintiff.
App. to Pet. for Cert. 21a, n. 2.
Cite as: 581 U. S. ____ (2017) 3
Opinion of the Court
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 num-
ber of lots. While this agreement was in place and Sher-
man 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 ad-
vanced 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 Sher-
man’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
4 TOWN OF CHESTER v. LAROE ESTATES, INC.
Opinion of the Court
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 prop-
erty.” App. to Pet. for Cert. 57a. The District Court inter-
preted 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 (CA2
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. ___ (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 Fed-
eral 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.
___, ___ (2016) (slip op., at 5–6). “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).
“Standing to sue is a doctrine rooted in the traditional
understanding of a case or controversy.” Spokeo, supra, at
——————
2 Weassume for the sake of argument only that Laroe does not have
Article III standing. If resolution of this question becomes necessary on
remand, the Court of Appeals will be required to determine whether
the District Court’s decision was correct.
Cite as: 581 U. S. ____ (2017) 5
Opinion of the Court
___ (slip op., at 6). “The law of Article III standing, which
is built on separation-of-powers principles, serves to pre-
vent 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 (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 Or-
ganization, 426 U. S. 26, 38 (1976) (internal quotation
marks omitted). To establish Article III standing, the
plaintiff seeking compensatory relief must have “(1) suf-
fered 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 ___ (slip op., at 6). “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.
Our standing decisions make clear that “ ‘standing is not
dispensed in gross.’ ” Davis v. Federal Election Comm’n,
554 U. S. 724, 734 (2008) (quoting Lewis v. Casey, 518
U. S. 343, 358, n. 6 (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 (internal quotation marks
omitted); see, e.g., DaimlerChrysler, supra, at 352 (“[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 (2000) (same); Los Angeles v. Lyons, 461 U. S. 95,
105–106, and n. 7 (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 com-
6 TOWN OF CHESTER v. LAROE ESTATES, INC.
Opinion of the Court
plaint. 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 requests. This result follows ineluctably from our
Article III case law, so it is not surprising that both par-
ties accept it (as does the United States as amicus curiae).
See Brief for Petitioner 13 (arguing that an intervenor
must always demonstrate standing); Brief for Respondent
28 (“[A]n intervenor who . . . seeks relief beyond that
requested by a party with standing must satisfy Arti-
cle III”); Brief for United States as Amicus Curiae 16
(An intervenor must demonstrate its own standing if
it “seek[s] damages” or “injunctive relief that is broader
than or different from the relief sought by the original
plaintiff(s)”).
In sum, an intervenor of right must have Article III
standing in order to pursue relief that is different from
that which is sought by a party with standing. That in-
cludes cases in which both the plaintiff and the intervenor
seek separate money judgments in their own names. Cf.
General Building Contractors Assn., Inc. v. Pennsylvania,
458 U. S. 375, 402, n. 22 (1982) (declining to address the
State’s standing “until [it] obtains relief different from
that sought by plaintiffs whose standing has not been
questioned”).
That principle dictates the disposition of this case. It is
——————
3 See
Brief for Petitioner 23 (“If different parties raising a single issue
seek different relief, then standing must be shown for each one”); Brief
for Respondent 15 (“[A] case or controversy as to one claim does not
extend the judicial power to different claims or forms of relief ”).
Cite as: 581 U. S. ____ (2017) 7
Opinion of the Court
unclear whether Laroe seeks the same relief as Sherman
or instead seeks different relief, such as a money judgment
against the Town in Laroe’s own name. Laroe’s com-
plaint—the best evidence of the relief Laroe seeks—
requests a judgment awarding damages to Laroe. App.
162. Unsurprisingly, Sherman requests something differ-
ent: specifically, compensation for the taking of his inter-
est in the property. Id., at 122. In other words, as Laroe’s
counsel conceded at oral argument, the complaint plainly
seeks separate monetary relief for Laroe directly against
the Town. Tr. of Oral Arg. 43–44. And, as Laroe’s counsel
conceded further, if Laroe is “seeking additional damages
in [its] own name,” “at that point, an Article III inquiry
would be required.” Id., at 47.
To be sure, at some points during argument in the Court
of Appeals, Laroe made statements that arguably indicated
that Laroe is not seeking damages different from those
sought by Sherman. In particular, Laroe’s counsel stated
that he was “not saying that Sherman and [Laroe’s] dam-
ages are not the same damages,” and insisted that there is
“exactly one fund, and the town doesn’t have to do any-
thing except turn over the fund.” Tr. 16, 33; see also Reply
Brief in No. 15–1086 (CA2), p. 12 (similar). At other
points, however, the same counsel made statements point-
ing in the opposite direction. When asked directly whether
“there would be separate awards to you and to the Sher-
man estate” if Sherman’s suit was successful, Laroe’s
counsel admitted that he “ha[d] never contemplated how
[damages] ge[t] allocated at the end of the day” and sug-
gested bifurcated proceedings so that once liability was
settled, Laroe and Sherman could “duke it out” over dam-
ages if necessary. Tr. 32–35. And in its Court of Appeals
briefing, Laroe argued that it—not Sherman—would be
entitled to most of the damages from the takings claim,
flagging the allocation issue as one that the District Court
would have to resolve. Brief for Appellant in No. 15–1086
8 TOWN OF CHESTER v. LAROE ESTATES, INC.
Opinion of the Court
(CA2), p. 32 (“[T]he trier of fact will have to determine the
relative allocation of rights over the fund . . . . Specifi-
cally, what is the value of Sherman’s bare legal title as com-
pared to Laroe’s equitable title in the subject property”);
Reply Brief in No. 15–1086, at 15 (“[M]ost, if not all of the
benefits” of this litigation “will accrue [to] Laroe”); see also
828 F. 3d, at 70 (noting that Sherman and Laroe “may
disagree about . . . the issue of damages were they to
prevail”). Taken together, these representations at best
leave it ambiguous whether Laroe is seeking damages for
itself or is simply seeking the same damages sought by
Sherman.4
Unfortunately, the Court of Appeals did not resolve this
ambiguity. In fact, the section of its opinion concerning
standing did not discuss whether Laroe sought different
relief than Sherman. Id., at 64–66. Elsewhere, in a dif-
ferent context, the court did acknowledge Laroe’s state-
ment that it sought “essentially the same” damages as
Sherman. Id., at 66. But the court also found that “it is
unclear from the record whether Laroe believes the Town
is directly liable to Sherman or Laroe for the taking.”
Ibid.
This confusion needs to be dispelled. If Laroe wants
only a money judgment of its own running directly against
the Town, then it seeks damages different from those
sought by Sherman and must establish its own Article III
standing in order to intervene. We leave it to the Court of
Appeals to address this question on remand.
——————
4 Before this Court, Laroe’s counsel represented that Laroe is not
seeking damages of its own and is seeking only to maximize Sherman’s
recovery. Tr. of Oral Arg. 43–44. But in light of the ambiguous record
and the lack of a reasoned conclusion on this question from the Court of
Appeals, we are not inclined to resolve it in the first instance. Cutter v.
Wilkinson, 544 U. S. 709, 718, n. 7 (2005) (“[W]e are a court of review,
not first view”).
Cite as: 581 U. S. ____ (2017) 9
Opinion of the Court
* * *
For these reasons, the judgment of the Court of Appeals
is vacated, and the case is remanded for further proceed-
ings consistent with this opinion.
It is so ordered.