UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-2115
ROBERT D. ADAMS, JR.; AILEEN S. ADAMS,
Plaintiffs - Appellants,
versus
VILLAGE OF WESLEY CHAPEL, a North Carolina
Municipal Corporation; ALBERT W. BLACK,
Individually,
Defendants - Appellees.
--------------------------------------------
NORTH CAROLINA PROPERTY RIGHTS COALITION,
INCORPORATED; JOHN LOCKE FOUNDATION,
Amici Supporting Appellants.
Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Robert J. Conrad, Jr.,
Chief District Judge. (3:03-cv-00411)
Argued: October 31, 2007 Decided: December 11, 2007
Before TRAXLER and GREGORY, Circuit Judges, and Jerome B. FRIEDMAN,
United States District Judge for the Eastern District of Virginia,
sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: William J. Brian, Jr., KENNEDY, COVINGTON, LOBDELL &
HICKMAN, L.L.P., Research Triangle Park, North Carolina, for
Appellants. Steven Kepner McCallister, SHANAHAN LAW GROUP,
Raleigh, North Carolina, for North Carolina Property Rights
Coalition, Incorporated, and John Locke Foundation, Amici
Supporting Appellants. Ann Cox Rowe, DAVIS & HAMRICK, L.L.P.,
Winston-Salem, North Carolina; Torin L. Fury, FRAZIER, FRANKLIN,
HILL & FURY, R.L.L.P., Greensboro, North Carolina, for Appellees.
ON BRIEF: Patrick L. Byker, KENNEDY, COVINGTON, LOBDELL & HICKMAN,
L.L.P., Research Triangle Park, North Carolina, for Appellants. H.
Lee Davis, Jr., DAVIS & HAMRICK, L.L.P., Winston-Salem, North
Carolina; William L. Hill, FRAZIER, FRANKLIN, HILL & FURY,
R.L.L.P., Greensboro, North Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Robert D. Adams and Aileen S. Adams appeal a district court
order granting summary judgment against them on various claims
arising out of the annexation of a tract of land that they owned
and declining to exercise supplemental jurisdiction over their
remaining claims. We affirm.
I.
Because this is an appeal from the grant of summary judgment,
we view the facts in the light most favorable to the Adamses, the
non-movants. See Saucier v. Katz, 533 U.S. 194, 201 (2001).
In July 1999, Albert Black, the mayor of the Village of Wesley
Chapel, North Carolina (“the Village”), spoke to Mr. Adams
regarding the possible voluntary annexation of a 184-acre tract of
land that the Adamses owned. Both men testified that they could
not remember the particulars of the conversation. Afterwards,
however, Black sent Adams a letter stating in pertinent part:
It was a pleasure to talk with you on Saturday about the
Village of Wesley Chapel. I have enclosed some
information about Wesley Chapel along with a “Petition
for Voluntary Annexation.”
Because some of your neighboring property owners have
expressed interest in being voluntarily annexed into
Wesley Chapel within the next thirty or so days, I wanted
to make sure you were made aware of this in case you
would also like to become part of Wesley Chapel at this
time.
The Village of Wesley Chapel offers you protection from
another municipality attempting to take you into its
boundaries through involuntary annexation as well as
3
offering a low tax rate ($.02 per $100.00 of property
valuation).
If you wish to be a part of this voluntary annexation,
please complete the enclosed form and mail it to us as
soon as possible. If you have questions, please do not
hesitate to contact me . . . .
J.A. 3030. Adams also had a conversation with Black in which Black
told him that his zoning would not change if the Adamses
voluntarily annexed their property. The Adamses subsequently
completed the form and sent it in, and in September 1999, their
petition was approved.
At the time the tract was annexed, it was zoned “R-40” by
Union County, where the tract was located, and the Village had not
enacted a zoning ordinance. On July 7, 2000, however, the Village
sent the Adamses a notice of a public hearing on a proposed new
zoning ordinance. The letter stated “that the Village Council does
not plan to change the current zoning designations of any
property.” J.A. 3085, 5769. Indeed, when the zoning ordinance was
subsequently enacted on August 21, 2000, the Adamses’ tract
continued to be zoned R-40; however, the meaning of that
designation changed under the new ordinance. Under Union County’s
zoning, R-40 was a density standard, while under the Village’s, it
was a minimum lot size. The new designation excluded flood plain
and power line rights of way from a parcel’s usable area and
allowed no deviations from a minimum-40,000-square-foot lot. That
excluded approximately 40 acres of usable area from the Adamses’
4
tract, resulting in 35 fewer house lots that could be developed,
and reducing the property value by $1,590,000. The Adamses later
petitioned unsuccessfully to rezone their property.
Dissatisfied with this result, the Adamses filed suits in
state and federal court against the Village and Black in his
individual capacity (“Appellees”). The state court action was
subsequently removed to federal court and consolidated with the
other federal action. The Adamses then sold the property in
question for $3,700,000 on March 1, 2004, while this action was
pending. The Adamses had paid $56,500 for the land in 1964.
As is relevant here, the Adamses’ complaint alleges violations
of federal and state constitutional provisions protecting against
takings without just compensation and violations of equal
protection and substantive due process rights. It also includes
state law claims for fraud, negligent misrepresentation, and
violation of North Carolina’s unfair and deceptive trade practices
statute, see N.C.G.S. § 75-1.1. The district court granted summary
judgment against the Adamses on the constitutional claims, finding
that their sale of the land rendered the claims moot and that the
claims failed as a matter of law in any event. Declining to
exercise supplemental jurisdiction over the remaining state law
claims, the district court remanded them to state court. See
28 U.S.C.A. § 1367(c)(3) (West 2006).
5
II.
The Adamses first contend that the district court erred in
concluding that their constitutional claims were moot. We agree.
In order to have standing, a plaintiff must allege and prove
an actual or imminent injury caused by the defendant’s challenged
conduct that can be redressable by the relief sought. See Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103 (1998).
Generally speaking, these elements must continue to exist
throughout the lawsuit; otherwise, the action becomes moot. See
United States Parole Comm’n v. Geraghty, 445 U.S. 388, 397 (1980).
But cf. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),
Inc., 528 U.S. 167, 190-92 (2000) (explaining that standing need
not always be present through time to prevent a case from becoming
moot).
The Adamses’ constitutional claims allege that Appellees’
actions proximately caused a reduction in the value of their
property, entitling them to damages. That they have since sold the
property is irrelevant to the redressability of their claim since
a damages award could redress the injury they allege. See Memphis
Light, Gas & Water Div. v. Craft, 436 U.S. 1, 8 (1978)
(“Respondents’ claim for actual and punitive damages . . . saves
this cause from the bar of mootness.”). Thus, the Adamses’ sale of
their property did not moot their constitutional claims.
6
III.
The Adamses next argue that the district court erred in ruling
that they failed to create a genuine issue of material fact
regarding their regulatory takings claims. We disagree.
The Takings Clause of the Fifth Amendment to the United States
Constitution provides, “[N]or shall private property be taken for
public use, without just compensation.”1 This constitutional
protection “is not restricted to physical invasions, occupations,
or removals of property.” Houlton Citizens’ Coalition v. Town of
Houlton, 175 F.3d 178, 190 (1st Cir. 1999). Rather, in some cases,
overly burdensome government regulation can constitute an
unconstitutional taking. See id. “A regulatory taking occurs
when the value or usefulness of private property is diminished by
a regulatory action that does not involve a physical occupation of
the property.” Levald, Inc. v. City of Palm Desert, 998 F.2d 680,
684 (9th Cir. 1993). It may occur as a result of “a radical
curtailment of a landowner’s freedom to make use of or ability to
derive income from his land,” even if the government does not
physically intrude upon, or acquire a legal interest in, the
property. Kirby Forest Indus., Inc. v. United States, 467 U.S. 1,
14 (1984). However, a regulatory action only becomes a compensable
1
The Adamses advance the same arguments with regard to their
state constitutional claims as they do for their federal ones. We
therefore do not distinguish between the two for the purposes of
our discussion.
7
taking under the Fifth Amendment if the government interference has
gone “too far,” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415
(1922), which it does when “some people alone” are forced “to bear
public burdens which, in all fairness and justice, should be borne
by the public as a whole,” Armstrong v. United States, 364 U.S. 40,
49 (1960).
The Adamses agree that the district court was correct to apply
the three-factor regulatory takings test provided in Penn Central
Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978),
to their claim. Under that test, when a regulation such as a
zoning ordinance causes substantial economic harm but does not
deprive the landowner’s property of all economic value, whether a
taking occurred depends on “the regulation’s economic effect on the
landowner, the extent to which the regulation interferes with
reasonable investment-backed expectations, and the character of the
government action.” Palazzollo v. Rhode Island, 533 U.S. 606, 617
(2001). Importantly, diminution in the property value alone cannot
establish a taking. See Penn Central, 438 U.S. at 131.
Here, the only injury that the Adamses can show is a
diminution in the value of their property. They certainly were not
denied the ability to obtain a reasonable return on their
investment. They purchased the property for $56,500 and sold it
for $3.7 million. The property was worth that much because it
could still be developed, just not quite to the extent that it
8
could have been before the Village adopted its zoning ordinance.
With regard to the test’s final factor, the character of the
government action, the regulation at issue is garden-variety zoning
based on the need to control growth, preserve a small-town
atmosphere, and maintain a low tax rate.2 The Supreme Court has
previously recognized the legitimacy of similar regulations. See,
e.g., City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 732-33
(1995).
The Adamses confuse matters by trying to include Black’s
actions in inducing them--fraudulently, they contend--to
voluntarily annex their property as part of the challenged
government action. But the annexation did not impose any burden on
the Adamses’ property rights. See Lingle v. Chevron U.S.A. Inc.,
544 U.S. 528, 539 (2005) (noting that the regulatory takings test
“focuses directly upon the severity of the burden that government
imposes upon private property rights”). “Government action” in
this context refers to the action that imposed the burden--the
Village’s adoption of its zoning ordinance. Appellees’ actions in
2
The Adamses contend that they received no “reciprocity of
advantage” by the annexation and the Village’s adoption of the
zoning ordinance. Tahoe-Sierra Pres. Council, Inc. v. Tahoe
Regional Planning Agency, 535 U.S. 302, 341 (2002) (internal
quotation marks omitted). But the Adamses, in fact, received the
very benefits that the zoning ordinance was adopted to provide.
See Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470,
491 (1987) (“While each of us is burdened somewhat by such
restrictions, we, in turn, benefit greatly from the restrictions
placed on others.”).
9
inducing the Adamses to annex their property thus are not relevant
to the regulatory takings claim. The district court therefore
correctly granted summary judgment against the Adamses on these
claims.
IV.
The Adamses also maintain that the district court erred in
granting summary judgment against them on their substantive due
process claims. We disagree.
In order to recover for a violation of substantive due
process, plaintiffs must prove that they had a property interest,
that the defendants deprived them of that interest, and that the
deprivation “falls so far beyond the outer limits of legitimate
governmental action that no process could cure the deficiency.”
Tri-County Paving, Inc. v. Ashe County, 281 F.3d 430, 440 (4th Cir.
2002) (internal quotation marks omitted). To prove this third
element, plaintiffs must show that the challenged actions had “no
foundation in reason and [were] a mere arbitrary or irrational
exercise of power having no substantial relation to the public
health, the public morals, the public safety or the public welfare
in its proper sense.” Sylvia Dev. Corp. v. Calvert County, Md., 48
F.3d 810, 827 (4th Cir. 1995) (internal quotation marks omitted).
Here, the Adamses maintain that Black misled them by falsely
stating that their land was in danger of being involuntarily
annexed by another town with a higher tax rate if they did not
10
voluntarily annex their property to the Village. The Adamses
maintain that Black knew from his involvement in two lawsuits to
prevent previous attempts by the town of Indian Trail to annex
property in the Wesley Chapel area that North Carolina law
prohibits involuntary annexation of large tracts of undeveloped
land such as theirs.
The Adamses, however, have failed to forecast any evidence
that Black told them that such an involuntary annex attempt could
succeed. Black’s letter states only that voluntary annexation to
Wesley Chapel could protect the Adamses “from another municipality
attempting” involuntary annexation of their property. J.A. 3030
(emphasis added). Indeed, as the Adamses themselves point out, the
town of Indian Trail had attempted such involuntary annexations
previously.
The Adamses also argue that their substantive due process
rights were violated in light of Black’s prior representation that
the property’s zoning would not change if they voluntarily annexed
it. Although the R-40 designation did not change under the Village
zoning ordinance, the Adamses argue that the changes in the meaning
of that designation under the ordinance significantly lessened the
value of their property. We conclude that the Adamses’ evidence,
even taken as true, cannot give rise to an inference of conduct
“fall[ing] so far beyond the outer limits of legitimate
governmental action that no process could cure the deficiency.”
11
Tri-County Paving, 281 F.3d at 440. It is undisputed that when the
property was annexed, its zoning did not change. In fact, the
zoning changed only in August 2000, nearly a year after the
annexation. Concerns regarding the density requirements that were
eventually adopted were discussed at the August 3, 2000, public
hearing concerning the ordinance. That those concerns did not
carry the day cannot constitute the basis for a claim of government
conduct so egregious as to amount to a violation of the Adamses’
substantive due process rights. Moreover, it is worth noting that
the Village honored all plats and subdivision plans that were filed
with Union County before enactment of the Village zoning ordinance.
There is no reason to doubt that the Adamses would have received
the same treatment had they filed a plat prior to the ordinance’s
enactment. The district court therefore correctly granted summary
judgment on this claim.
V.
The Adamses further argue that the district court erred in
granting summary judgment against them on their Equal Protection
claims. We disagree.
The Equal Protection Clause of the Fourteenth Amendment
“limits all state action, prohibiting any state from denying a
person equal protection through the enactment, administration, or
enforcement of its laws and regulations.” Front Royal & Warren
County Indus. Park Corp. v. Town of Front Royal, 135 F.3d 275, 289
12
(4th Cir. 1998) (internal quotation marks & emphasis omitted). To
establish an Equal Protection claim with a “class of one,” a
plaintiff must show that he “has been intentionally treated
differently from others similarly situated and that there is no
rational basis for the difference in treatment.” Village of
Willowbrook v. Olech, 528 U.S. 562, 564 (2000). Because the
Adamses do not allege the infringement of a fundamental right or
claim a suspect classification, Appellees need only show that the
challenged action “is rationally related to a legitimate state
interest.” City of Cleburne v. Cleburne Living Ctr., Inc., 473
U.S. 432, 440 (1985).
The Adamses maintain that Black intentionally treated them
differently than he treated similarly situated landowners when he
solicited the voluntary annexation of their property. The record
does not bear that out, however. In fact, Black testified in his
deposition that he had “talked to a lot of people” about voluntary
annexation. J.A. 2671; see J.A. 2676-77.3
The Adamses also maintain that Appellees violated their Equal
Protection rights by denying their request to rezone their property
from R-40 to R-20. The Adamses emphasize that theirs was the only
3
The Adamses claim that they were treated differently from
similarly situated landowners because the Village failed to conduct
the statutorily requisite verification of their annexation petition
or publish the statutorily required notice advertising the public
annexation hearing. The Adamses do not contend, however, that they
were harmed by this treatment.
13
zoning request the Village ever denied, and they note that 79% of
the zoning permits issued by the Village for new house construction
on property zoned for lots with a minimum size of 40,000 square
feet were, in fact, issued for lots with less than 40,000 square
feet in spite of their R-40 zoning. However, the Adamses ignore
the uncontradicted evidence that these lots had been platted under
Union County zoning, that the plats for those subdivisions had been
approved, adopted, and accepted under Union County zoning, and that
the Village had no lawful right to deny those building permits
because the Union County zoning was the lawful zoning ordinance in
place at the time the developments were platted. Thus, the Adamses
failed to create a genuine issue of fact regarding whether these
other lots were similarly situated to theirs.4
VI.
In sum, we conclude that although the Adamses’ constitutional
claims are not moot, the district court properly determined that
the Appellees were entitled to summary judgment on each of them.
AFFIRMED
4
We note that while the Adamses contend that the district
court erred in remanding their claims for fraud, negligent
misrepresentation, and unfair trade practices, they do so only on
the basis that the court erred in granting summary judgment on
their other claims.
14