Rex Realty Co. v. City of Cedar Rapids

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 02-1395
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Rex Realty Co., *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Northern District of Iowa.
City of Cedar Rapids, *
*
Appellee, *
*
State of Iowa, *
*
Intervenor Defendant. *
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Submitted: October 10, 2002
Filed: March 7, 2003
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Before HANSEN, Chief Judge, BYE, and MAGILL, Circuit Judges.
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MAGILL, Circuit Judge.
Rex Realty Co. ("Rex") appeals the district court's1 order finding that the
notice provisions of Iowa Procedure Under Eminent Domain, Iowa Code Chapter 6B
1
The Honorable Michael J. Melloy, then United States District Judge for the
Northern District of Iowa, now United States Circuit Judge for the Eighth Circuit
Court of Appeals.
(1999), satisfy constitutional due process requirements. Rex alleges that the statute
is unconstitutional because it did not require the City of Cedar Rapids ("City") to
provide pre-deprivation notice and an opportunity to be heard on whether a taking
was for a "public purpose."2 The district court found that the Due Process Clause of
the U.S. Constitution, U.S. Const. amend. XIV, § 1, and the Due Process Clause of
the Iowa Constitution, Iowa Const. art. I, § 18, do not require a city taking property
under its power of eminent domain to provide the landowner with a hearing prior to
the initiation of condemnation proceedings on the issue of whether the taking is for
a public purpose. The district court entered judgment for the City, and Rex appeals.
Our jurisdiction is proper pursuant to 28 U.S.C. § 1291. For the following
reasons, we affirm.
I.
Rex owned real estate in Cedar Rapids, Iowa. The City wanted to extend
Fourth Street Court SW, which would require the acquisition of a portion of Rex's
parcel and portions of parcels belonging to other private property owners. The City's
attempts to acquire the land date back at least to a December 9, 1997, meeting
between the City and the affected property owners. After more than a year of
negotiations ended in Rex's rejection of the City's $38,000 offer, the City Engineering
Department advised Rex in a May 20, 1999, letter that it would recommend that the
City Council initiate condemnation proceedings.
On June 2, 1999, the City passed a resolution ("Resolution") seeking to
condemn a portion of Rex's property. The City filed an application for condemnation
2
Since the events giving rise to this action, the Iowa Code has been amended,
and now requires notice and a hearing on the necessity of condemning "agricultural
land" for public improvement before the adoption of a resolution to condemn. Iowa
Code § 6B.2A(1) (2001).
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in Iowa District Court, noting that the land would be used for an additional street
right-of-way. The state judge signed the application on June 10, 1999, thereby
certifying that it was legally sufficient. See State v. Johann, 207 N.W.2d 21, 24 (Iowa
1973). Rex was served with a Notice of Condemnation ("Notice") on June 17, 1999.
The Notice provided, inter alia, that the City desired condemnation for the purpose
of an additional street right-of-way, that a compensation commission ("Commission")
had been appointed to appraise the damages, and that the Commission would meet
on July 21, 1999, to view the premises and appraise the damages.3 In addition, the
Notice provided the time and place of the Commission's meeting.
Prior to the Commission's meeting, Rex did not request a formal hearing to
raise the issue of public purpose and did not commence any legal action in state or
federal court to challenge the condemnation. The Commission held its hearing as
scheduled, and Rex's counsel appeared on Rex's behalf. The Commission determined
Rex's damages to be $38,000. Within a matter of days, the City paid Rex this amount,
thereby vesting title to the property in the City.
Rex initially filed an appeal in state court as provided by Iowa Code §§ 6B.18
and 6B.21-.24 (1999), but voluntarily dismissed the appeal without prejudice. Rex
subsequently brought suit in federal court, claiming that the City's failure to provide
notice and a hearing on the issue of public purpose violated Rex's procedural due
process rights. The district court held that due process did not require the City to
provide Rex with notice and opportunity to be heard on the issue of public purpose
before condemning Rex's property.
3
Prior to the amendment, see supra note 2, Iowa Code §§ 6B.4 and 6B.14
(1999) limited the Commission's review to the assessment of damages. After the
amendment, the Commission may review whether condemnation of "agricultural
land" is necessary for the placement of an industry. See Iowa Code § 6B4.A (2001).
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II.
"Eminent domain is the power of a governmental entity to take private property
for a public use without the owner's consent." ACCO Unlimited Corp. v. City of
Johnston, 611 N.W.2d 506, 510 (Iowa 2000) (citation omitted). Iowa law grants
cities the power of eminent domain, so long as the taking is for a public purpose and
is reasonable and necessary. Iowa Code § 6A.4(6) (1999). With regard to the
requirements for the proper exercise of this power, in this circuit "it is well settled
that a sovereign vested with the power of eminent domain may exercise that power
consistent with the [C]onstitution without providing prior notice, hearing, or
compensation, so long as there exists an adequate mechanism for obtaining
compensation." Collier v. Springdale, 733 F.2d 1311, 1314 (8th Cir. 1984) (citations
omitted). An adequate mechanism existed for Rex to obtain compensation: the
Commission's July 21, 1999, meeting. Rex received notice of this meeting thirty-four
days prior to the meeting, well beyond the statutorily required ten days, Iowa Code
§ 6B.8 (1999).4 Moreover, the City Engineering Department notified Rex in the May
20, 1999, letter that it was planning to advise the City Council to proceed with
condemnation, and Rex could have appeared at the June 2, 1999, City Council
meeting to challenge the City's contention that the right-of-way was a valid public
purpose.
In addition, under Iowa common law, Rex had the right to collaterally attack
the condemnation and seek injunctive relief at any time before the Commission's
meeting. See Banks v. City of Ames, 369 N.W.2d 451, 454 (Iowa 1985) (stating that
the issues of necessity and public purpose "may be raised by an independent action
seeking to enjoin condemnation" (citation omitted)); Mann v. City of Marshalltown,
265 N.W.2d 307, 313-14 (Iowa 1978) (permitting an action for an injunction where
4
This provision has also been amended, and the required statutory notice is
now thirty days prior to a Commission's meeting. Iowa Code § 6B.8 (2001).
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plaintiffs alleged that the taking of their land was not for public use). Rex was served
notice of the condemnation thirty-four days before the Commission's meeting.
Accordingly, under Banks and Mann, Rex had thirty-four days to challenge that the
condemnation was not for a public purpose.
Finally, in addition to the option of pursuing an action for injunctive relief, Rex
could have petitioned in state court for a writ of mandamus or a writ of certiorari. See
Owens v. Brownlie, 610 N.W.2d 860, 865-66 (Iowa 2000) ("These remedies give the
condemnee a procedural vehicle to promptly challenge the propriety of the
condemnation, including the issue whether the property sought to be condemned is
necessary for public use. Although our legislature primarily decides those activities
that constitute public use, courts decide whether the underlying facts show an activity
that constitutes a public use.").
Rex failed to exercise these procedural rights by pursuing any appropriate
action in state court prior to or after the Commission's meeting. In federal court, Rex
then claimed procedural due process violations. However, Iowa law denied Rex no
rights afforded by the federal constitution.
III.
For the foregoing reasons, we affirm the district court.
BYE, Circuit Judge, concurring.
A governmental entity does not have carte blanche authority to take property
so long as just compensation is paid; the Constitution also requires that the taking be
for a public purpose. In eminent domain and condemnation proceedings, the well-
established rule has been that no pre-deprivation hearing is required as long as there
are adequate post-deprivation remedies for compensation. See, e.g., Collier v. City
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of Springdale, 733 F.2d 1311, 1314 (8th Cir. 1984). But compensation is not the
issue here. Rex asks what pre-deprivation process is due a party who questions the
public nature of the taking rather than the adequacy of the compensation.
Condemnation proceedings (excepting inverse condemnation) take place
pursuant to established state policies and procedures. The presumptive rule applied
to due process claims requires a pre-deprivation hearing when property is taken
pursuant to an established state policy or procedure. E.g., Logan v. Zimmerman
Brush Co., 455 U.S. 422, 433 (1982). Thus, the question squarely raised by Rex is
which rule should give way under the circumstances involved in this case. Should
a pre-deprivation hearing be required under Logan because eminent domain
proceedings take place pursuant to established procedures, or should no pre-
deprivation hearing be required because the courts have not before imposed that
constitutional requirement in the realm of eminent domain and condemnation
proceedings?
We avoid explicitly answering that question by focusing on Rex's right to
collaterally attack the condemnation of its property in its own lawsuit. Rex clearly
had notice of the City's intentions well before the condemnation actually took place,
and thus had an opportunity to petition a court for injunctive relief to stop the City if
the taking was indeed for an impermissible private purpose. But the Due Process
Clause requires both notice and an opportunity to be heard. Cleveland Bd. of Educ.
v. Loudermill, 470 U.S. 532, 542 (1985). Rex contends that reliance on the
availability of a collateral attack, initiated by the alleged victim of unconstitutional
conduct, renders nugatory the hearing requirements of the Due Process Clause
because a collateral attack is always theoretically possible when pre-deprivation
notice is given.
I am intrigued by that argument, and troubled by our reliance on Rex's ability
to bring its own lawsuit as the grounds for affirming the district court. Nevertheless,
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I join in affirming the judgment in favor of the City, because I do not believe a pre-
deprivation hearing is required under the circumstances present in this case.
I think we first need to identify the crux of Rex's claim before we can decide
whether a pre-deprivation hearing is required. Rex presents this claim as a
procedural due process claim. I am not convinced that Rex has a viable procedural
due process claim. There is some support for the notion that, in a case such as this,
the only question is whether the Takings Clause was violated, not whether the Due
Process Clause was violated. In other words, because a specific constitutional
provision covers Rex's constitutional claim, the due process claim collapses into the
takings claim. See generally Coniston Corp. v. Village of Hoffman Estates, 844 F.2d
461, 464-66 (7th Cir. 1988). While such a notion has more appeal as applied to
substantive due process claims rather than procedural due process claims, see id. at
465, at least one circuit has extended this analysis to procedural due process claims
as well:
Because the Just Compensation Clause of the Fifth Amendment
imposes very specific obligations upon the government when it seeks
to take private property, we are reluctant in the context of a factual
situation that falls squarely within that clause to impose new and
potentially inconsistent obligations upon the parties under the
substantive or procedural components of the Due Process Clause. It
is appropriate in this case to subsume the more generalized Fourteenth
Amendment due process protections within the more particularized
protections of the Just Compensation Clause.
Miller v. Campbell County, 945 F.2d 348, 352 (10th Cir. 1991) (emphasis added);
but see John Corp. v. City of Houston, 214 F.3d 573, 582-83 (5th Cir. 2000)
(collecting and discussing the cases declining to collapse due process claims into
takings claims).
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If Rex's procedural due process claim is really just a takings claim in disguise,
I arrive at the same conclusion reached in the majority opinion. No pre-deprivation
hearing is required. Rex has adequate post-deprivation remedies available to
vindicate the alleged constitutional wrong, i.e., a collateral attack under Iowa
common law, or a suit under 42 U.S.C. § 1983 alleging the City violated the Takings
Clause. Rex's remedy, however, would not be a § 1983 action claiming a procedural
violation of the Due Process Clause based on the City's failure to hold a hearing.
Rex purportedly wants a hearing before the City, prior to the actual condemnation,
to air the issue whether the taking is public or private in nature. But hasn't the City
already made that determination by initiating the condemnation? I suggest what Rex
really seeks is a hearing before an impartial adjudicator (i.e., a judicial forum) to
review the constitutionality of the City's determination under the Takings Clause.
Rex cannot receive that kind of relief in a hearing before the City, either before the
condemnation or after it.
Even if we analyze Rex's claim as a procedural due process claim, however,
I am not convinced a pre-deprivation hearing is required. We analyze procedural
due process claims in two-steps. First, we determine whether the plaintiff has a
constitutionally protected interest in life, liberty, or property. Krentz v. Robertson,
228 F.3d 897, 902 (8th Cir. 2000). Second, we determine how much process is due.
Id. Since Rex's interest in its own property is undisputed, the only issue here is how
much process Rex was due.
The determination of how much process is due in any given situation requires
a balancing of three factors:
First, the private interest that will be affected by the official action;
second, the risk of an erroneous deprivation of such interest through the
procedures used, and the probable value, if any, of additional or
substitute procedural safeguards; and finally, the Government's interest,
including the function involved and the fiscal and administrative
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burdens that the additional or substitute procedural requirement would
entail.
Mathews v. Eldridge, 424 U.S. 319, 335 (1976).
A balancing of the Mathews v. Eldridge factors, as applied to a party's
challenge to the public nature of a taking, weighs against the necessity for a pre-
deprivation hearing. In particular, I believe the risk of an erroneous deprivation is
very slight. I suspect in the vast majority of eminent domain proceedings there will
be no dispute about whether the governmental entity has a legitimate public purpose
in condemning private property — the only issue will be how much compensation
is due. Thus, the government should not have to provide a pre-deprivation hearing
in every case for the sake of those few cases that involve a challenge to the public
nature of the taking. Such a requirement would impose significant new fiscal and
administrative burdens on governmental entities that have not before been
constitutionally required in eminent domain proceedings. I do not believe that result
is justified, given the slight chance a governmental entity will impermissibly take
property for a private purpose.
I therefore concur in affirming the district court.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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