Vacation Village Inc. v. Clark County, Nevada

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
VACATION VILLAGE, INC., 
Plaintiff-Appellee, No. 05-16173
v.  D.C. No.
CLARK COUNTY, NEVADA, CV-05-00010-RCJ
Defendant-Appellant.

VACATION VILLAGE, INC., 
Plaintiff-Appellant, No. 05-16389
v.  D.C. No.
CLARK COUNTY, NEVADA, CV-05-00010-RCJ
Defendant-Appellee.

In re: CEH PROPERTIES, LTD., 
Debtor,
No. 05-16406
D.C. Nos.
VACATION VILLAGE, INC.,
Plaintiff-Appellee,  CV-05-00010-RCJ
ADV. No. 98-2313-
v. RCJ
CLARK COUNTY, NEVADA,
Defendant-Appellant.

8849
8850 VACATION VILLAGE v. CLARK COUNTY, NEVADA
In re: CEH PROPERTIES, LTD., 
Debtor, No. 05-16554
D.C. Nos.
VACATION VILLAGE, INC.,
Plaintiff-Appellant,  CV-05-00010-RCJ
ADV. No. 98-2313-
v. RCJ
CLARK COUNTY, NEVADA, OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the District of Nevada
Robert C. Jones, District Judge, Presiding
Argued and Submitted
April 16, 2007—San Francisco, California
Filed July 23, 2007
Before: Warren J. Ferguson, Stephen Reinhardt, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
8854 VACATION VILLAGE v. CLARK COUNTY, NEVADA
COUNSEL
Kirk Lenhard, Las Vegas, Nevada, for the appellant/cross-
appellee.
Paul Ray, Las Vegas, Nevada, for the appellee/cross-
appellant.
OPINION
MILAN D. SMITH, JR., Circuit Judge:
Appellees, the owners of real property near McCarran
International Airport in Las Vegas, Nevada, brought an
inverse condemnation action against Clark County (County)
alleging that the County’s Ordinances 1221 and 1198, which
impose, respectively, height and use restrictions, constitute
takings under the Nevada Constitution. We hold that our
review of Ordinance 1221 is limited by the Nevada Supreme
Court’s decision in McCarran Int’l Airport v. Sisolak, 137
P.3d 1110 (Nev. 2006) construing Nevada state law, and,
accordingly, find that Ordinance 1221, as applied to Appel-
lee’s property, amounts to a taking. We remand for a calcula-
tion of just compensation in light of Sisolak. We affirm the
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8855
district court’s decision that Ordinance 1198 did not effect a
taking of Appellee’s property.1
I. BACKGROUND
For more than 50 years, the County has regulated land near
McCarran Airport through the adoption of zoning ordinances.
As a result of its proximity to the airport, the real property
owned by Appellees (collectively, the Landowners)2 has been
encumbered by a number of these ordinances.
The Landowners acquired the subject property in 1964,
intending to construct a hotel resort and casino. A portion of
the property was zoned as Rural Estates Residential (R-E),
and in 1971 the Landowners sought to rezone this portion as
Limited Resort and Apartment (H-1). The County partially
conditioned approval of the Landowners’ rezoning request on
the Landowners’ granting of the following avigation ease-
ment:
[The County] is to have a perpetual right of flight,
ingress to and egress from the airspace over the
lands herein above described, in conformity with the
air traffic rules governing the flight of aircraft to and
from the Clark County Airport . . . . It is further
understood and agreed that the grantor himself, his
heirs, successors or assignees . . . shall and do hereby
release, and agree to save harmless and indemnify,
the County of Clark from any claims whatsoever for
losses caused by noise or the psychological effects of
aircraft.
1
We address the remaining issues raised by both parties on appeal in a
concurrently filed memorandum disposition.
2
In ways not relevant to our decision, the ownership of the subject prop-
erty has been transferred several times. For convenience, we use the term
“Landowners” to refer to the then relevant fee holder(s) throughout this
opinion.
8856 VACATION VILLAGE v. CLARK COUNTY, NEVADA
(First Easement). By 1974, the Landowners had completed a
number of rooms, but not the entire building. The parties did
not complete the rezoning and the First Easement was not
recorded.
In February 1981, the County enacted Ordinance 728 at
Chapter 29.50 of the Clark County Code in order to limit the
height of structures adjacent to public use airports. Ordinance
728 set a height limitation demarcated by a plane sloping
“twenty (20) feet outward for each foot upward beginning at
the end of and at the same elevation as the primary surface”
for areas designated as a “Utility Runway Visual Approach
Zone.” The parties refer to this height limitation as a “20:1”
slope surface. Ordinance 728 set a height limitation of one
hundred fifty feet above the airport elevation for areas within
a “Horizontal Zone.”
In June 1988, the Landowners filed another rezoning
request with the County to have the R-E property reclassified
as H-1. The County conditioned its approval of the Landown-
ers’ rezoning request on the Landowners’ granting the follow-
ing avigation easement:
It is understood and agreed that [the County is] to
have perpetual right of flight, for the passage of air-
craft in the air space above the surface of said prem-
ises, together with the right to cause in said air space
such noise as may be inherent in the operation of air-
craft, now known or hereafter used for navigation of
or flight in the air using said air space or landing at,
or taking-off from or operating at, or on the premises
known as McCarran International Airport . . . .
It is further understood the GRANTOR does hereby
agree for himself to release Clark County, Nevada,
and operators and users of the above described air-
fields from any claims whatsoever for losses hereaf-
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8857
ter caused by noise or the psychological effects of
aircraft noise resulting from the overflight of aircraft.
(Second Easement). The Landowners granted the Second
Easement to the County on June 21, 1988. The County reclas-
sified the property from R-E to H-1 and granted a use permit
to the Landowners to construct and maintain a 501-room,
two-story hotel, and an 85,000-square-foot casino. According
to the Landowners, construction under the proposed design
plans began in 1989.
On January 16, 1990, the Federal Aviation Administration
(FAA) issued a “Determination of Hazard to Air Navigation”
to the Landowners. The FAA determined that the Landown-
ers’ previously proposed 80-foot sign, 47-foot casino and
three 76-foot hotel buildings would penetrate the approach
slope for proposed Runway 1R and thus “would have a sub-
stantial adverse impact to the safe and efficient use of naviga-
ble airspace and would be a hazard to air navigation.”
The Landowners redesigned the proposed construction lim-
iting the height of the structures on the property to 38 feet
above ground level 2,850 feet southwest of the approach end
of Runway 1R. On June 27, 1990, the FAA issued a “Deter-
mination of No Hazard to Air Navigation” finding that
“[a]lthough the structure has been identified as an obstruction,
. . . the proposal would not adversely affect the safe and effi-
cient use of navigable airspace and would not be a hazard to
air navigation.”
On July 18, 1990, the County passed Ordinance 1221
which amended Chapter 29.50 of the Clark County Code. For
property in a “Precision Instrument Runway Approach Zone”
the applicable height limitation “[s]lopes fifty feet outward for
each foot upward beginning at the end of and at the same ele-
vation as the primary surface and extending to a horizontal
distance of ten thousand feet along the extended runway cen-
terline.” The parties refer to this height limitation as a “50:1”
8858 VACATION VILLAGE v. CLARK COUNTY, NEVADA
slope surface. Despite this height limitation, Ordinance 1221
provides that it should not be “construed as prohibiting the
construction or maintenance of any structure to a height up to
thirty-five feet above the surface of the land in any zone.”
Ordinance 1221 also requires that before the construction of
new buildings and structures in these zones, the FAA and the
Clark County Department of Aviation must first determine
that “it does not constitute a hazard.”
The County also adopted Ordinance 1198 at Chapter 29.51
of the Clark County Code. Ordinance 1198 establishes an
“airport environs overlay district.” The stated purpose of the
ordinance is “to provide for a range of uses compatible with
airport accident hazard and noise exposure areas and to pro-
hibit the development of incompatible uses that are detrimen-
tal to the public health, safety and welfare in these airport
environs.” As applied, Ordinance 1198 designates 1.25 acres
of the Landowners’ property as a runway protection zone
(RPZ). Such designation limits the development of the 1.25-
acre parcel to uses such as a parking lot, a water area, or land-
scaping.
On December 17, 1993, the Landowners filed a complaint
in Nevada state court alleging, among other things, inverse
condemnation of airspace and inverse condemnation of 1.25
acres in the RPZ. A jury trial was originally scheduled for
March 11, 1996 but was continued to March 24, 1997 due to
the Landowners’ illness. At the Landowners’ request, the state
court set a new trial date of September 22, 1998.
On October 7, 1997, the Landowners filed a voluntary peti-
tion for bankruptcy under Chapter 11 in United States Bank-
ruptcy Court for the District of Nevada and listed their inverse
condemnation claims against the County as a contingent and
unliquidated claim in their Schedule of Personal Property.
The bankruptcy court confirmed the reorganization plan on
November 24, 1998.
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8859
Meanwhile, in Nevada state court, the Landowners reported
on September 23, 1998 that they were not ready to proceed
with trial. No other trial dates were available before the expi-
ration of the five-year limitations period for bringing a case
to trial under Nevada Rule of Civil Procedure 41(e). The state
court denied the Landowners’ request to “put on one witness,
put on a little bit of testimony” to satisfy the rule, and stated
that absent a waiver of the limitations period by the County,
the case would be automatically dismissed when the limita-
tions period ran under Rule 41(e).
The Landowners then filed a motion requesting that the
period following October 7, 1997, when the bankruptcy peti-
tion was filed, not be counted in determining the five-year
period for trial under Rule 41(e) because an “automatic stay”
applied. The state court denied the Landowners’ motion, find-
ing that no automatic stay was in place.
The Landowners next sought relief in the bankruptcy court
from the same alleged stay. The bankruptcy court judge,
Judge Robert C. Jones, opined that he did not “think there’s
a stay in any event to lift,” but nevertheless granted the Land-
owners’ motion to lift “the stay.” The Landowners thereupon
removed their inverse condemnation claims to the bankruptcy
court pursuant to 28 U.S.C. § 1452 and Rule 9027 of the Fed-
eral Rules of Bankruptcy Procedure. Following the County’s
motion for partial summary judgment, the Landowners filed
a second amended complaint in which they continued to
assert their inverse condemnation claims under the Nevada
Constitution.
In April 2002, the case proceeded to a bench trial in the
bankruptcy court before Judge Jones. Both parties consented
to the entry of a final order or judgment by the bankruptcy
judge. Judge Jones was subsequently confirmed as a federal
district judge for the district of Nevada, and a year after his
confirmation, he issued Findings of Fact and Conclusions of
Law in this case that he signed as a “United States Bank-
8860 VACATION VILLAGE v. CLARK COUNTY, NEVADA
ruptcy Judge.” Relevant to the issues discussed in this opin-
ion, Judge Jones (1) awarded the Landowners compensation
from the County for the taking of airspace as a result of Ordi-
nance 1221; (2) determined that Ordinance 1198 did not result
in a taking of the 1.25 acres in the RPZ; and (3) awarded the
Landowners compensation from the County for the taking of
certain ground easements.3
On January 4, 2005, Judge Jones, in his capacity as a dis-
trict court judge, entered an order sua sponte withdrawing the
bankruptcy reference. Judge Jones then entered a final judg-
ment awarding the Landowners $10,121,686.63 in damages,
fees, and prejudgment interest.
The County appealed and the Landowners cross-appealed.
II. GENERAL STANDARDS OF REVIEW
On appeal from a bankruptcy court’s decision, we afford no
deference to the prior decision of the district court. We review
the bankruptcy court’s conclusions of law de novo and the
bankruptcy court’s factual findings for clear error. Thus, “we
accept findings of fact made by the bankruptcy court unless
these findings leave the definite and firm conviction that a
mistake has been committed by the bankruptcy judge.” In re
Rains, 428 F.3d 893, 900 (9th Cir. 2005) (quoting Latman v.
Burdette, 366 F.3d 774, 781 (9th Cir. 2004)).
3
The final judgment includes a $287,781 award for the taking of certain
ground easements plus prejudgment interest. The County does not appeal
the district court’s finding that there was a taking of the ground easements;
the County only appeals the compensation award regarding the ground
easements for (1) lack of subject matter jurisdiction and (2) excessive
interest. We address the former argument in this opinion and the latter in
the concurrently filed memorandum disposition.
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8861
III. PRELIMINARY ISSUES
We first address a number of global challenges to the exis-
tence and exercise of jurisdiction in this case.
A. Rooker-Feldman
The County argues that the district court lacked subject
matter jurisdiction under the Rooker-Feldman doctrine
because any judgment rendered by that court “undercut the
state court’s ruling regarding dismissal, which was inextrica-
bly intertwined with the state law claims that the Landowners
intended to pursue in the adversary proceeding.” We disagree.
[1] The Rooker-Feldman doctrine holds that “[a]s courts of
original jurisdiction . . . federal district courts lack jurisdiction
to review the final determinations of a state court in judicial
proceedings.” Doe & Assocs. Law Offices v. Napolitano, 252
F.3d 1026, 1029 (9th Cir. 2001) (citing Branson v. Nott, 62
F.3d 287, 291 (9th Cir. 1995); D.C. Ct. of App. v. Feldman,
460 U.S. 462, 476 (1983)). A district court is in essence being
called upon to review the state court’s decision if the federal
claims presented to the district court are inextricably inter-
twined with a state court decision. Napolitano, 252 F.3d at
1029. Claims are inextricably intertwined when “the district
court must hold that the state court was wrong in order to find
in favor of the plaintiff.” Id. State court decisions subject to
the Rooker-Feldman doctrine include not only final judg-
ments, but also interlocutory orders. Id. at 1030.
[2] Here, the state court stated only that it would dismiss
the case if and when the statute of limitations expired. Even
though the statute of limitations was set to expire in a matter
of days, the state judge’s warning that the deadline was soon
approaching, and that he would be forced to dismiss the case
when the deadline came, is not the equivalent of an actual
order dismissing the suit. Indeed, the state judge indicated that
he would not dismiss the case if the County would sign a writ-
8862 VACATION VILLAGE v. CLARK COUNTY, NEVADA
ten stipulation to waive the five-year rule; otherwise “the five-
year rule . . . is a mandatory provision,” over which the court
had no discretion. In agreeing to accept the case from the state
court prior to the expiration of the five-year period, the bank-
ruptcy court did not need to find that the state court was incor-
rect in its interpretation of Nevada Rule of Civil Procedure
41(e).4 Cf. id. Accordingly, the Rooker-Feldman doctrine does
not apply to preclude federal jurisdiction over the Landown-
ers’ claims.
B. “Related to” Jurisdiction under § 1334(b)
[3] The County also challenges whether subject matter
jurisdiction over the case lies under 28 U.S.C. § 1334(b),
which provides that federal courts shall have “original but not
exclusive jurisdiction of all civil proceedings arising under
title 11, or arising in or related to a case under title 11.” In
Celotex Corp. v. Edwards, 514 U.S. 300 (1995), the Supreme
Court described the scope of “related to” jurisdiction under
§ 1334(b):
Proceedings “related to” the bankruptcy include (1)
causes of action owned by the debtor which become
property of the estate pursuant to 11 U.S.C. § 541,
and (2) suits between third parties which have an
effect on the bankruptcy estate. . . . The first type of
“related to” proceeding involves a claim like the
state-law breach of contract action at issue in North-
ern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982).
Id. at 307 n.5 (internal citation omitted). Where the cause of
action is not of the first type of proceeding identified in
Celotex—owned by the debtor which becomes property of the
4
Similarly, a minute order reflecting the state court’s unavailablity for
trial was not an interpretation of Rule 41(e) found erroneous by the federal
court, and thus does not raise Rooker-Feldman concerns.
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8863
estate in bankruptcy—courts are concerned with the closeness
of the relationship between the proceeding and the bankruptcy
estate. See, e.g., Pacor Inc. v. Higgins, 743 F.2d 984, 994
(1984) (holding that where the cause of action is between
third parties, the test for “whether a civil proceeding is related
to bankruptcy is whether the outcome of that proceeding
could conceivably have any effect on the estate being admin-
istered in bankruptcy” (emphasis omitted)), In re Pegasus
Gold Corp., 394 F.3d 1189, 1193-94 (9th Cir. 2005) (adopting
a more stringent test than applied in Pacor for a claim of the
debtor that did not arise until after the confirmation of the
bankruptcy plan).
[4] Here, the Landowners’ inverse condemnation suit falls
squarely within the “first type of ‘related to’ proceeding”
described in Celotex, 514 U.S. 307 n.5, and is thus “related
to” the bankruptcy within the meaning of § 1334(b) without
further scrutiny. Similar to the claim before the court in
Northern Pipeline, where the debtor filed a state action to
recover contract damages to augment the debtor’s estate, the
debtors in this case seek to recover on state law inverse con-
demnation claims that are listed as property of the estate. See
Northern Pipeline, 458 U.S. at 55-56. The present suit is “re-
lated to” the bankruptcy because it is a part of the estate, and
thus subject matter jurisdiction exists under § 1334(b).
C. Ripeness
[5] “Ripeness is more than a mere procedural question; it
is determinative of jurisdiction.” S. Pac. Transp. Co. v. City
of Los Angeles, 922 F.2d 498, 502 (9th Cir. 1990). Under the
Supreme Court’s decision in Williamson County Regional
Planning Commission v. Hamilton Bank, 473 U.S. 172(1985), an as-applied taking claim is ripe only if the land-
owner can establish that: (1) “the government entity charged
with implementing the regulations has reached a final deci-
sion regarding the application of the regulations to the prop-
erty at issue,” and (2) the landowner has sought
8864 VACATION VILLAGE v. CLARK COUNTY, NEVADA
“compensation through the procedures the State has provided
for doing so.” Id. at 186, 194. We conclude that both of the
Landowners’ claims are ripe under this standard.
[6] Application of the first requirement in Williamson
County (the “finality” requirement) is dependent on the nature
of the taking. See Daniel v. County of Santa Barbara, 288
F.3d 375, 382 (9th Cir. 2002). As we explain below, we fol-
low the Nevada Supreme Court’s characterization of Ordi-
nance 1221 as an “unconditional and permanent” taking and
a “physical occupation of private property” under the Nevada
Constitution. See Sisolak, 137 P.3d at 1123. For such takings,
the ripeness analysis of Williamson County applies in a modi-
fied form—the first requirement, that the government entity
reach a final decision regarding the application of the regula-
tions to the property at issue, is “automatically satisfied at the
time of the physical taking” because “[w]here there has been
a physical invasion, the taking occurs at once, and nothing the
city can do or say after that point will change that fact.” Dan-
iel, 288 F.3d at 382 (9th Cir. 2002) (quoting Hall v. City of
Santa Barbara, 833 F.2d 1270, 1281 n.28 (9th Cir. 1986)
(overruled on other grounds by Yee v. City of Escondido, 503
U.S. 519 (1992))). Thus, as to Ordinance 1221, the ripeness
doctrine does not require the Landowners to first seek and be
denied a variance to satisfy the finality requirement.
[7] Ordinance 1198 is not a physical taking, so we must
apply an unmodified form of the Williamson County finality
requirement. Cf. Daniel, 288 F.3d at 382. Clarifying the first
prong of Williamson County, the Supreme Court held that
“once it becomes clear that . . . the permissible uses of the
property are known to a reasonable degree of certainty, a tak-
ings claim is likely to have ripened.” Palazzolo v. Rhode
Island, 533 U.S. 606, 620 (2001). Thus, in applying the final-
ity requirement for ripeness, courts have imposed a “meaning-
ful application requirement,” which requires that “local
decision-makers must be given an opportunity to review at
least one reasonable development proposal before an as-
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8865
applied challenge to a land use regulation will be considered
ripe.” S. Pac. Transp. Co., 922 F.2d at 503. This requirement
applies “even in instances where a regulation appeared on its
face to be highly restrictive.” Id.[8] After reviewing the record, Judge Jones found that the
Landowners met the meaningful application requirement. In
particular, he noted:
Examining the recent use applications involving the
1.25 acres reveals that Vacation Village has
requested to use that land for activities ranging from
hotel development to a temporary automobile sales
show. Vacation Village received approval for all of
these uses. However, the approvals provided that
none of the proposed activities could occur on the
1.25 acres.
We do not find that Judge Jones clearly erred in making these
findings of fact. Based on the reasonable plans for “hotel
development” and “temporary automobile sales show” which
were denied as to the 1.25 acres in the RPZ, along with the
clearly enumerated uses for land in an RPZ in Ordinance
1198, the Landowners have satisfied the Williamson County
finality requirement as to Ordinance 1198.
The second requirement of Williamson County is also
referred to as the “exhaustion” prong. Carson Harbor Village,
Ltd. v. City of Carson, 353 F.3d 824, 827 (9th Cir. 2004). In
Carson Harbor Village, the property owner alleged that, as
applied to its property, the city’s ordinance enacting a ceiling
on rent levels for mobile home spaces amounted to a regula-
tory taking. Id. at 825-26. Instead of pursuing California’s
procedures for seeking just compensation, however, the prop-
erty owner filed a complaint in federal district court alleging
a taking under 42 U.S.C. § 1983. Id. at 826. Applying the sec-
ond prong of Williamson County, we dismissed the property
owner’s regulatory takings claim as unripe. Id. at 830.
8866 VACATION VILLAGE v. CLARK COUNTY, NEVADA
[9] Unlike the § 1983 claim in Carson Harbor Village, the
Landowners’ inverse condemnation claims meet the exhaus-
tion prong of Williamson County. In Nevada, an acceptable
state procedure for obtaining just compensation for a takings
claim is the filing of an inverse condemnation lawsuit. See,
e.g., Sisolak, 137 P.3d at 1116. The Landowners initially
brought their state law inverse condemnation claims in state
court. That the case is presently in federal court is a product
of 28 U.S.C. § 1334(b), not a failure to meet the ripeness
requirement of Williamson County; the nature of the Land-
owners’ state law inverse condemnation claims are not
changed by the exercise of federal subject matter jurisdiction.
As the Landowners are currently pursuing their state law
inverse condemnation action, we find that the exhaustion
prong of Williamson County is met as to both claims.
[10] Because the Landowners’ claims satisfy both of Wil-
liamson County’s requirements—finality and exhaustion—we
hold that they are ripe for adjudication.
D. Compliance with State Appeal Procedures
[11] The Landowners argue that we should dismiss the
County’s appeal because it did not comply with N.R.S.
§ 37.170(1) which requires that in a takings case a govern-
ment agency must first deposit into court the full amount of
the judgment before it may dispute a money judgment on
appeal. See State ex rel. Dep’t of Highways v. 2d Jud. Dist.
Ct., 337 P.2d 274, 276 (Nev. 1959). Federal Rule of Civil
Procedure 62(d), however, requires only that the appellant
post a supersedeas bond in order to obtain a stay on appeal.
We apply the Federal Rule.
[12] “[F]ederal courts are to apply state substantive law and
federal procedural law.” Hanna v. Plumer, 380 U.S. 460, 465
(1965). Thus, “[w]hen a situation is covered by one of the
Federal Rules [of Civil Procedure] . . . the court has been
instructed to apply the Federal Rule,” even it “is in direct col-
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8867
lision with the law of the relevant State.” Id. at 471-72. Rule
62(d) “is a purely procedural mechanism to preserve the sta-
tus quo during a stay pending appeal of a district court deci-
sion and creates no choice of law concerns.” Bass v. 1st Pac.
Networks, Inc., 219 F.3d 1052, 1055 (9th Cir. 2000). The
County’s monetary obligations on appeal is a situation “cov-
ered by” Rule 62(d). We apply Rule 62(d) and find that the
County properly complied by posting a supersedeas bond.
E. Dual Role of Judge Jones
A year after his confirmation to the United States District
Court for the District of Nevada, Judge Jones issued Findings
of Fact and Conclusions of Law, which he signed as a “United
States Bankruptcy Judge.” Soon thereafter, acting in his
capacity as a district judge, Judge Jones entered an order sua
sponte withdrawing the bankruptcy reference for reasons of
judicial efficiency, and entered a final judgment. We hold that
the unique procedural history of this case does not require
reversal.
[13] The County cites no authority for the proposition that
Judge Jones’s entering of findings of fact signed as a bank-
ruptcy judge following his confirmation as an Article III
judge constituted reversible error. In Northern Pipeline, on
which the County’s opening brief primarily relies, the
Supreme Court was concerned with the opposite problem —
the potential for a violation of the separation of powers doc-
trine when the “judicial Power of the United States” is
bestowed on Article I bankruptcy judges, who lack the salary
and tenure protections of Article III. 458 U.S. at 58-60. Judge
Jones was an Article III judge, with all of the attendant bene-
fits and protections when he entered his findings. Absent a
reasoned argument for concern, we do not find that reversal
is warranted on these facts.
[14] Similarly, we do not find that Judge Jones’s with-
drawal of reference to the bankruptcy court was reversible
8868 VACATION VILLAGE v. CLARK COUNTY, NEVADA
error. Under 28 U.S.C. § 157(d), “[t]he district court may
withdraw, in whole or in part, any case or proceeding referred
under this section, on its own motion . . . for cause shown.”
In determining whether cause exists, we consider the follow-
ing: “the efficient use of judicial resources, delay and costs to
the parties, uniformity of bankruptcy administration, the pre-
vention of forum shopping, and other related factors.” In re
Cantor, 299 F.3d 1150, 1154 (9th Cir. 2002) (quoting Sec.
Farms v. Int’l Bhd. of Teamsters, Chauffers, Warehousemen,
& Helpers, 124 F.3d 999, 1008 (9th Cir. 1997)). Judge Jones
explained that “it is necessary and appropriate to withdraw the
reference to the United States District Court of this adversary
proceeding in order to allow the undersigned to file a final
judgment.” We find that Judge Jones efficiently used judicial
resources and minimized further delay and costs to the parties
by entering final judgment at the conclusion of protracted liti-
gation. Thus, although there may have been some abrogation
of the County’s right to an intermediate appeal from the bank-
ruptcy court’s decision based on the precise timing of Judge
Jones’s withdrawal of the reference, see, e.g., In re Pruitt, 910
F.2d 1160, 1168 (9th Cir. 2002), we find that an examination
of all the factors identified in In re Cantor, 299 F.3d at 1154,
indicates that Judge Jones properly withdrew the reference for
cause.
IV. ORDINANCE 1221
Our review of the Landowners’ claim that Ordinance 1221
effected a taking of airspace under the Nevada Constitution is
limited by the Nevada Supreme Court’s decision in McCarran
International Airport v. Sisolak, 137 P.3d 1110, issued after
the close of briefing in this appeal. Like the Landowners,
Sisolak also owned property near McCarran Airport and
brought an inverse condemnation action against the County
alleging that the height restrictions in Ordinance 1221 consti-
tuted a per se regulatory taking under the Nevada Constitu-
tion. Id. at 1116. Citing the Nevada constitution and statutes,
the Nevada Supreme Court first held that Sisolak had a valid
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8869
property interest in the airspace above their land up to 500
feet. Id. at 1120. The court then reasoned:
Although the airplanes flying over Sisolak’s property
are not constantly occupying the airspace in a tempo-
ral sense, the invasion is nevertheless permanent
because the right to fly through the airspace is pre-
served by the Ordinances and expected to continue
into the future. . . . Therefore, the Ordinances autho-
rize a physical invasion of Sisolak’s property and
require Sisolak to acquiesce to a permanent physical
invasion.
Id. at 1225. Based on its finding that Ordinance 1221 was a
physical invasion of Sisolak’s airspace, the Nevada Supreme
Court concluded that “under both the United States and
Nevada Constitutions, the facts of this case present a regula-
tory per se taking and that Sisolak is due just compensation
for the government’s physical invasion of his property.” Id. at
1121. Given the similarities between Sisolak and the present
case, we first determine the proper weight to accord to the
Nevada Supreme Court’s decision in Sisolak.
As a general rule, “state law as announced by the highest
court of the State is to be followed.” Comm’r v. Estate of
Bosch, 387 U.S. 456, 465 (1967) (citing Erie R.R. Co. v.
Tompkins, 304 U.S. 64 (1938)). However, “interpretation of
state statutes by state courts under compulsion of federal law
erroneously understood does not bind federal courts.” Breisch
v. Cent. R.R., 312 U.S. 484, 489 (1941).
We respectfully disagree with our colleagues on the
Nevada Supreme Court concerning their interpretation of fed-
eral takings jurisprudence. No Fifth Amendment taking of the
Landowners’ property occurred under the standards set forth
in Penn Central Transportation Co. v. New York City, 438
U.S. 104 (1978).
8870 VACATION VILLAGE v. CLARK COUNTY, NEVADA
[15] The Landowners, however, raise inverse condemna-
tion claims only under Article 1, Section 8(6) of the Nevada
Constitution and under the circumstances of this case, the
Nevada Supreme Court is the final arbiter of that fundamental
state charter. Despite our disagreement with the Nevada
Supreme Court’s interpretation of federal takings cases, we
cannot find that it felt compelled to interpret the Nevada Con-
stitution in a particular manner based on those cases. Cf. Del-
aware v. Prouse, 440 U.S. 648, 651-53 (1979). The Nevada
Supreme Court considered and rejected the argument that
Sisolak’s state constitution takings claim should be analyzed
under Penn Central, noting that “a state may place stricter
standards on its exercise of the takings power through its state
constitution or state eminent domain statutes.” 137 P.3d at1126 (citing Kelo v. City of New London, 545 U.S. 469, 489
(2003)). In holding that Ordinance 1221 effected a taking, the
majority in Sisolak cited to the Nevada Constitution and state
statutes, as well as the decisions of other state supreme courts.
See, e.g., 137 P.3d at 1120, 1125. Justice Becker’s dissent in
Sisolak also confirms that the Nevada Supreme Court’s deci-
sion was made on state grounds:
I realize that the majority has determined to apply
state constitutional principles to this takings analysis.
This is certainly a reasonable approach. Having said
this, I do not believe it necessary to deviate from
federal takings jurisprudence to justly evaluate
whether a compensable regulatory taking has
occurred.
Id. at 1136 (Becker, J., dissenting). Thus, the Nevada
Supreme Court clearly found that the Nevada Constitution
defines takings more broadly than the United States Constitu-
tion and that Ordinance 1221 is a per se regulatory taking
under the Nevada Constitution.5
5
Sisolak, does not, however control the outcome of this case under prin-
ciples of collateral estoppel. As a rule we “give to a state-court judgment
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8871
[16] We further find that we are bound by the Nevada
Supreme Court’s decision in Sisolak when reviewing Ordi-
nance 1221 under the Nevada Constitution despite the exis-
tence of federal aviation regulations. Applying the Supreme
Court’s decision in Jankovich v. Indiana Toll Road Comm’n,
379 U.S. 487, 493-94 (1965), we hold that federal airport reg-
ulations do not preempt Sisolak’s application of the Nevada
Constitution’s takings clause with respect to Ordinance 1221.
In Jankovich, the operators of the Gary Municipal Airport
filed a complaint in Indiana state court alleging violations of
the city’s airport zoning ordinance which set height limita-
tions for structures in the immediate vicinity of the airport. Id.
at 488. The Indiana Supreme Court invalidated the ordinance,
holding that such a restriction “purported to authorize an
unlawful and unconstitutional appropriation of property rights
without payment of compensation.” Id. The Supreme Court
initially granted review of the Indiana Supreme Court’s deci-
sion and then dismissed the writ of certiorari as improvidently
granted, reasoning that it did not have jurisdiction over a deci-
sion of the Indiana Supreme Court made on independent and
adequate state grounds. Id. at 489.
Relevant to the present case, the petitioners in Jankovich
contended that the Indiana Supreme Court’s “state ground of
decision is not adequate because it is inconsistent with the
policy of the Federal Airport Act . . . and therefore founders
on the Supremacy Clause.” Id. at 492. The Supreme Court
rejected this argument, noting that the decision of the Indiana
the same preclusive effect as would be given that judgment under the law
of the State in which the judgment was rendered.” Migra v. Warren City
Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). Because Nevada courts
have not applied offensive nonmutual collateral estoppel against a state
party on a question of law, we do not apply it here. See Coeur D’Alene
Tribe v. Hammond, 384 F.3d 674, 689 (9th Cir. 2004) (“[w]e hesitate to
give preclusive effect to the previous litigation of a question of law by
estoppel against a state party when no state law precedent compels that we
do so”); Restatement (Second) of Judgments § 29 (1982).
8872 VACATION VILLAGE v. CLARK COUNTY, NEVADA
Supreme Court “certainly does not portend the wholesale
invalidation of all airport zoning laws,” id. at 493, and the
Indiana Supreme Court’s decision that the city’s ordinance
was invalid as a taking was “compatible with the congressio-
nal policy embodied in the Federal Airport Act.” Id. at 495.
[17] The County cites no subsequent Supreme Court
authority which would call the holding of Jankovich into
question. As the Supreme Court has already spoken on a sub-
stantially similar issue, we likewise hold that the Supremacy
Clause does not invalidate the decision of the Nevada
Supreme Court finding that height restrictions in airport zon-
ing ordinances amount to a taking of the underlying property
requiring compensation under the Nevada Constitution.
We now turn to the County’s challenges specific to Ordi-
nance 1221.
A. Constitutional Estoppel
The County also argues that the Landowners are constitu-
tionally estopped from claiming a taking of their airspace.
Based on the Nevada Supreme Court’s decision in City of Las
Vegas Downtown Redevelopment Agency v. Pappas, 76 P.3d
1 (Nev. 2003), we find that the Nevada Supreme Court would
not find that the Landowners have waived their claims under
the Nevada Constitution.
[18] In Pappas, the Nevada Supreme Court declined to
apply the doctrine of constitutional waiver, but held that the
doctrine would apply to all eminent domain cases filed in the
future (post-2003). Id. at 9. We believe that the Nevada
Supreme Court would find that the holding of Pappas pertains
to the present case because “[i]nverse condemnation proceed-
ings are the constitutional equivalent to eminent domain
actions and are governed by the same rules and principles that
are applied to formal condemnation proceedings.” County of
Clark v. Alper, 685 P.2d 943, 949 (Nev. 1984). The Landown-
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8873
ers filed their inverse condemnation complaint in 1993, ten
years before the Pappas ruling. Thus under Pappas, the Land-
owners’ claims are not constitutionally estopped.
B. Waiver by Easement
The County argues that by granting it perpetual avigation
easements, the Landowners effectively transferred their prop-
erty interest in the airspace and, therefore, cannot now bring
a claim alleging a taking of that airspace. This argument also
fails under Sisolak.
The interpretation of the language of an easement is a mat-
ter of state law. See S.O.C., Inc. v. Mirage Casino-Hotel, 23
P.3d 243, 246 (Nev. 2001). This court is bound by the Nevada
Supreme Court’s interpretation of the perpetual avigation
easement involved in Sisolak, insofar as it does not conflict
with federal law, because the avigation easement language at
issue in this case is identical to the language considered in
Sisolak. See Sisolak, 137 P.3d at 1115-16.
[19] The Sisolak court explained that “an easement
obtained by a government entity for public use is only as
broad as necessary for the accomplishment of the public pur-
pose for which the easement was obtained.” Id. at 1120 (quot-
ing S.O.C., Inc., 23 P.3d at 247). Noting that the avigation
easement did “not contain any height restriction terms,” the
court held that the easement “did not abrogate Sisolak’s prop-
erty interest in the airspace or serve as a defense to the inverse
condemnation claim.” Id. Under Nevada law, the agreement
was nothing more than an “overflight easement exacted . . .
to preclude liability for aircraft noise.” Id. at 1120-21. Follow-
ing Sisolak, we hold that the avigation easements are not a
defense to the taking of the Landowners’ airspace.
C. Just Compensation for Airspace
20The district court’s conclusion that the taking of airspace
by Ordinance 1221 was capped at the heights provided in
8874 VACATION VILLAGE v. CLARK COUNTY, NEVADA
Ordinance 728 was predicated on its erroneous interpretation
—in light of Sisolak—of an avigation easement as waiving or
conveying the Landowners’ property interests for the airspace
above a 20:1 approach path extending from the end of the
runway. As discussed above, Sisolak holds that Nevadans
have a property interest “in the usable airspace above [their]
property up to 500 feet” notwithstanding the avigation ease-
ments granted. Sisolak, 137 P.3d at 1120. We thus remand to
the district court for a determination of just compensation fol-
lowing Sisolak.
To determine just compensation for a taking of airspace by
Ordinance 1221, Sisolak instructs:
Constitutional principles provide that just compensa-
tion is measured by the fair market value of the con-
demned property. [T]he market value of the property
should be determined by reference to the highest and
best use for which the land is available and for which
it is plainly adaptable. However, the highest and best
use must be “reasonably probable.” In determining
fair market value, the trier of fact may consider any
elements that fairly enter into the question of value
which a reasonable businessman would consider
when purchasing.
Id. at 1128 (internal quotation marks and citations omitted).
On remand, the district court “should give ‘due consideration
. . . to those zoning ordinances that would be taken into
account by a prudent and willing buyer.’ ” City of Las Vegas
v. Bustos, 75 P.3d 351, 352 (Nev. 2003) (per curiam) (quoting
Clark County v. Alper, 685 P.2d 943, 948 (1984) (ellipses in
Bustos)).6
6
For example, the Nevada Supreme Court has “permitted the trier of
fact to consider the effect that future zoning or variances may have on the
condemned property’s highest and best use when there is evidence that a
prudent purchaser would conclude that he or she would likely receive a
VACATION VILLAGE v. CLARK COUNTY, NEVADA 8875
V. ORDINANCE 1198
[21] Under Sisolak, Ordinance 1198 does not effect a regu-
latory per se taking under the Nevada Constitution of the sep-
arate parcel consisting of 1.25 acres. Outside the “two
relatively narrow categories” of regulatory per se takings —
where the regulation (1) requires an owner to suffer a perma-
nent physical invasion of her property or (2) completely
deprives an owner of all economical beneficial use of her
property—“regulatory takings challenges are governed by the
standards set forth in Penn Central.” Sisolak, 137 P.3d at
1122 (quoting Goldblatt v. Hempstead, 369 U.S. 590, 594
(1962)). The Landowners do not set forth a claim that Ordi-
nance 1198 amounts to a regulatory per se taking because
they do not allege that the designation of the 1.25 acres in
question as within the RPZ constitutes either a permanent
physical invasion or a complete deprivation of all economi-
cally beneficial use of that property.
When presented with a regulatory taking that is not a per
se taking, the Nevada Supreme Court instructs that “[a] court
should consider (1) the regulation’s economic impact on the
property owner, (2) the regulation’s interference with
investment-backed expectations, and (3) the character of the
government action.” Sisolak, 137 P.3d at 1122 (quoting Penn
Central, 438 U.S. at 124).
[22] In this case, Judge Jones evaluated the facts presented
and properly applied the Penn Central test to the Landown-
ers’ inverse condemnation claim as it relates to Ordinance
1198. In particular, Judge Jones found that (1) the economic
zoning change.” City of N. Las Vegas v. Robinson, 134 P.2d 705, 708
(Nev. 2006). See also Sisolak, 137 P.3d at 1128 (“Although evidence
regarding variance procedures is irrelevant to establish whether a property
owner is entitled to compensation for a regulatory per se taking, such evi-
dence is still relevant in calculating the amount of compensation due.”).
8876 VACATION VILLAGE v. CLARK COUNTY, NEVADA
impact on the Landowners was minimal because the property
in the RPZ accounted for only 5% of the Landowners’ prop-
erty, and that that small portion “could still be put to use as
a water feature, as some form of landscaping, or possibly as
a parking lot,” (2) interference with reasonable investment-
backed expectations was also minimal because the regulation
furthers an important public policy of airline safety and
because the initial development of the airport predated the
acquisition of the Vacation Village property, and (3) the char-
acter of the government action favors the County because air-
port zoning benefits the public as a whole. These factual
findings are not clearly erroneous. Accordingly, we affirm
Judge Jones’s determination that Ordinance 1198 as applied
to 1.25 acres of the Landowners’ land designated as within
the RPZ was not a taking.
VI. CONCLUSION
Following Sisolak, and in the absence of federal preemp-
tion, we have no choice but to find that Ordinance 1221, as
applied to the Landowners’ property, amounted to a regula-
tory per se taking under the Nevada Constitution. We remand
the district court’s award of just compensation for reconsider-
ation in light of Sisolak.
We affirm the district court’s decision that Ordinance 1198,
as applied to the small parcel that is part of the Landowners’
property, did not amount to a taking.
The parties shall each bear their own costs on appeal.
AFFIRMED IN PART and REMANDED.