Torromeo v. Town of Fremont

United States Court of Appeals
For the First Circuit

No. 04-2547

HENRY TORROMEO and MDR CORPORATION,

Plaintiffs, Appellants,

v.

TOWN OF FREMONT, NEW HAMPSHIRE,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Steven J. McAuliffe, U.S. District Judge]

Before

Selya, Lipez, and Howard, Circuit Judges.

Timothy S. Hollister with whom Patrick M. Fahey, Shipman &
Goodwin, LLP, Sumner F. Kalman, Thea S. Valvanis, and Duane J.
Desiderio were on brief, for appellants.
John J. Ryan with whom Casassa and Ryan, Eric Kane and Devine,
Millimet & Branch, PA were on brief, for appellee.

February 21, 2006
 HOWARD, Circuit Judge. This appeal arises from a dispute

between Plaintiffs Henry Torromeo and MDR Corporation and Defendant

Town of Fremont, New Hampshire over the Town's delay in issuing

certain building permits for property owned by Plaintiffs.

Plaintiffs sued in federal court under 42 U.S.C. § 1983, claiming

that the Town's delay constituted both a violation of the Takings

Clause of the Fifth Amendment and a breach of the due process and

equal protection guarantees of the Fourteenth Amendment.1 The

district court granted the Town's motion to dismiss under Fed. R.

Civ. P. 12 (b)(6) because the complaint was barred by the Rooker-

Feldman doctrine and res judicata. We affirm.

The case has a somewhat involved factual and procedural

history. In the late 1990s, Plaintiffs received approval from the

Fremont Planning Board for planned housing subdivisions.

Subsequently, however, the Town enacted a growth control ordinance

empowering the Board to limit the number of building permits that

it would issue for new residential housing. The Board thereafter

implemented such a limitation, which resulted in Plaintiffs being

denied the needed permits.

Displeased, Plaintiffs sued in New Hampshire Superior

Court, challenging the validity of the growth control ordinance and

1
The Takings Clause of the Fifth Amendment applies to the
states through the Fourteenth Amendment. See Dolan v. Tigard, 512
U.S. 374, 383-84 (1994).

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seeking an injunction compelling the Town to issue the building

permits. The court granted the injunction because the Town had

failed to satisfy a statutory prerequisite before adopting the

ordinance. After the New Hampshire Supreme Court affirmed that

ruling, the Town issued the permits.

Plaintiffs then filed additional separate suits in the

New Hampshire Superior Court, seeking compensation for the

temporary taking of their property during the period in which they

were wrongfully denied the permits. Their complaints referenced

both the Takings Clause of the Fifth Amendment to the United States

Constitution and the analogous provision of the New Hampshire

Constitution, Part 1, Article 12. In addition, the complaints

cited United States Supreme Court authority interpreting the

federal Takings Clause. The cases were consolidated.

The superior court ruled that Plaintiffs were entitled to

compensation to offset the losses from the wrongly-denied permits.

After a trial on damages, the court awarded MDR $71,600 and

Torromeo $23,800. The Town appealed to the New Hampshire Supreme

Court which reversed. See Torromeo v. Fremont, 813 A.2d 389 (N.H.

2002). It reasoned that compensation is due for a temporary taking

only where the losses are caused by a municipality's enactment of

an unconstitutional ordinance. Id. at 392. Because the growth

control ordinance had not been held unconstitutional, but merely

invalid due to the Town's failure to follow statutory enactment

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procedures, no compensation was due. Id. Plaintiffs petitioned

for a writ of certiorari in the United States Supreme Court,

claiming that the New Hampshire Supreme Court's opinion conflicted

with the Fifth Amendment's Takings Clause. The petition was

denied. See 539 U.S. 923 (2003).

After the state-court judgment became final, Plaintiffs

filed the present action. Their complaint claimed that the Town

failure to compensate them justly for a taking violated the Fifth

Amendment. They also alleged a violation of their substantive due

process rights on the ground that the Town's denial of the building

permits was "arbitrary and capricious," and a violation of their

equal protection rights because the Town treated them differently

from "other similarly situated property owners."

The district court dismissed the complaint on two

grounds. It first concluded that the complaint had to be

dismissed under the Rooker-Feldman doctrine because the Plaintiffs'

"federal lawsuit [was] little more than a thinly disguised effort

to reverse the New Hampshire Supreme Court's decision rejecting

their claimed entitlement, under the Fifth Amendment, to the

damages for the temporary 'taking' of their real property."

Torromeo v. Fremont, No. 03-481, 2004 WL 2300481, at *4 (D.N.H.

2004). The court alternatively held the complaint was res judicata

because the Fifth Amendment claim was in fact adjudicated in the

state-court proceeding, and the due process and equal protection

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claims could have been adjudicated in that proceeding. See id. at

*6-7.

We review the district court's dismissal order de novo.

See Roth v. United States, 952 F.2d 611, 613 (1st Cir. 1991). We

will affirm only if the well-pleaded facts fail to establish the

Town's liability under some actionable legal theory. See Rodi v.

S. New England Sch. of Law, 389 F.3d 5, 13 (1st Cir. 2004).

After the district court dismissed Plaintiffs' complaint,

the Supreme Court decided Exxon Mobil Corp. v. Saudi Basic Indus.

Corp., 544 U.S. 280 (2005), which substantially limited the reach

of the Rooker-Feldman doctrine. See Federación de Maestros de P.R.

v. Junta de Relaciones del Trabajo de P.R., 410 F.3d 17, 23-24 (1st

Cir. 2005) (describing the limitations placed on Rooker-Feldman by

Exxon Mobil). Because we agree that Plaintiffs' Fifth Amendment

claim is res judicata, we bypass the Rooker-Feldman issue and

proceed to the district court's alternative ruling.

Under federal law, "a federal court must give to a state-

court judgment the same preclusive effect as would be given that

judgment under the law of the state in which the judgment was

entered." Migra v. Warren City Sch. Dist. Bd. of Ed., 465 U.S. 75,

81 (1984). This principle applies to a § 1983 action brought in

federal court following a state-court judgment. Id. at 83-85.

Thus, the effect of the New Hampshire court's final judgment on

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Plaintiffs' federal action is determined by applying New

Hampshire's res judicata law.

In New Hampshire, "the essence of the doctrine of res

judicata is that a final judgment by a court of competent

jurisdiction is conclusive upon the parties in a subsequent

litigation involving the same cause of action." In re Juvenile,

888 A.2d 422, 425 (N.H. 2005). The doctrine precludes litigation

in a later case of matters actually litigated, and matters that

could have been litigated, in the earlier action . See Brzica v.

Trustees of Dartmouth Coll., 791 A.2d 990, 999 (N.H. 2002). For

res judicata to apply, three elements must be satisfied: (1) the

parties must be the same or in privity with one another; (2) the

same cause of action must be before the court in both instances;

and (3) a final judgment on the merits must have been rendered in

the first action. See id. "Cause of action" is broadly defined to

mean "the right to recover, regardless of the theory of recovery."

McNair v. McNair, 856 A.2d 5, 16 (N.H. 2004).

At first blush, this case appears to fall squarely within

New Hampshire's res judicata rules. The parties to the federal

action and the state actions were identical. The same cause of

action was before the federal court as was before the state court

because both suits sought compensation for harm caused by the

Town's wrongful denial of the permits. And the New Hampshire court

entered final judgments on the merits of Plaintiffs' state-court

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actions.

There is, however, a complication. In 1985, the United

States Supreme Court held that a takings claim under the Fifth

Amendment is not ripe until the plaintiff has sought compensation

through available state procedures. See Williamson County Reg'l

Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 194-95 (1985); see

also Deniz v. Guaynabo, 285 F.3d 142, 146 (1st Cir. 2002). In

1989, building on Williamson County, the New Hampshire Supreme

Court held that federal takings and related federal due-process

claims raised in a state-court proceeding, alongside state-law

claims for compensation, had to be dismissed without prejudice

because they were not ripe until the state-law claims were

resolved. See Blue Jay Realty Trust v. Franklin, 567 A.2d 188,

190-91 (N.H. 1989).2

Invoking Blue Jay Realty, Plaintiffs argue that res

judicata does not bar their federal-court action because (1) their

federal claims were not litigated in the state-court action and (2)

they were not required to raise these claims in the state-court

action because they were not ripe. See In re Iannochino, 242 F.3d

2
Last term, the Supreme Court decided San Remo Hotel, L.P. v.
San Francisco, -- U.S. --, 125 S.Ct. 2491 (2005), which calls Blue
Jay Realty into substantial doubt. The San Remo Court held that
Williamson County "does not preclude state courts from hearing
simultaneously a plaintiff's request for compensation under state
law and the claim that, in the alternative, the denial of
compensation would violate the Fifth Amendment of the Federal
Constitution." Id. at 2506.

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36, 43 n.4 (1st Cir. 2001) (res judicata does not apply where a

claim could not have been raised in the first litigation); see also

Restatement (Second) of Judgments § 26(1)(c) (1982) (res judicata

does not bar a claim for relief in a subsequent action where the

claim was not raised in the initial action "because of . . .

restrictions on [the court's] authority to entertain multiple

theories . . . in a single action").

But Plaintiffs' argument fails because the federal

takings claim was actually litigated to a final judgment on the

merits in the state court. As noted above, Plaintiffs' state-court

complaints identified the Takings Clause of the Fifth Amendment to

the United States Constitution as a basis for the cause of action.

The complaints also cited First English Evangelical Lutheran Church

v. Los Angeles County, 482 U.S. 304 (1987), a Supreme Court case

interpreting the Takings Clause. In addition, after losing in the

New Hampshire courts, Plaintiffs filed a writ of certiorari with

the United States Supreme Court claiming that the New Hampshire

decision violated their rights under the federal Takings Clause.

These filings demonstrate that a federal takings claim was actually

litigated in the state-court action. See C. Wright, A. Miller & E.

Cooper, Federal Practice & Procedure § 4406, at 143 (2d ed. 2002)

(stating that formal pleadings and other filings are relevant to

determining the claims that were advanced in a prior suit).

Indeed, Plaintiffs admitted as much in their federal complaint,

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which states that the state-court proceedings were actions "to

obtain just compensation for a taking under the U.S. and New

Hampshire Constitutions."3 The district court thus correctly

concluded that res judicata barred Plaintiffs' Fifth Amendment

claim.4 See Peduto v. N. Wildwood, 878 F.2d 725, 728-29 (3d Cir.

1989) (affirming res judicata dismissal of a Takings Clause claim

filed in federal court where the claim was litigated to a final

judgment on the merits in a prior state-court proceeding).

We turn now to the Plaintiff's substantive due process

and equal protection claims. Whether res judicata bars these

3
Plaintiffs point to the fact that the New Hampshire Supreme
Court cited only cases interpreting the New Hampshire Constitution
as evidence that the litigation did not involve a federal takings
claim. See Torromeo, 813 A.2d at 392. But the New Hampshire
Supreme Court has stated that where a plaintiff raises state and
federal takings claims in the same action, the court need not
consider the claims independently because the Fifth Amendment's
Takings Clause is no more protective than its state analogue. See
Sanderson v. Candia, 787 A.2d 167, 169 (N.H. 2001). Therefore, the
court's decision that the Town did not violate the takings
provision of the state constitution means, a fortiori, that, in its
view, there was no unlawful taking under federal law.
4
Plaintiffs also assert that, even if the elements of res
judicata are satisfied, we should permit the Fifth Amendment claim
to proceed because New Hampshire law imbues courts with discretion
to decline to apply res judicata. We have not found New Hampshire
authority to this effect. The most that can be said is that New
Hampshire applies res judicata on a "case-by-case basis." Cook v.
Sullivan, 829 A.2d 1059, 1063 (N.H. 2003). But even assuming that
New Hampshire law affords courts some discretion in applying res
judicata, Plaintiffs have failed to explain why their case is
exceptional. See Sondel v. Northwest Airlines, Inc., 56 F.3d 934,
941 (8th Cir. 1995) (doubting that res judicata was a discretionary
doctrine under Minnesota law, but concluding that, even if
discretion existed, res judicata barred a claim where the plaintiff
failed to show that applying the doctrine worked an "injustice").

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claims presents a somewhat closer question. These additional

federal-law theories were not litigated in the state-court action,

and there is a plausible argument that they are not res judicata

because they could not have been litigated in that action under

Blue Jay Realty. See Restatement of Judgments (Second), supra. On

the other hand because, as just explained, Plaintiffs ignored the

Blue Jay Realty rule by litigating their takings claim in the

state-court action, one could argue that the due process and equal

protection claims should have been raised along with the takings

claim. In any event, we need not decide how New Hampshire's res

judicata law would apply to this unique situation because the due

process and equal protection claims fail as a matter of law. See

Carroll v. Xerox Corp., 294 F.3d 231, 241 (1st Cir. 2002) (court of

appeals may affirm the dismissal of complaint on any ground

supported by the record).

We begin with the substantive due process claim. We

recently explained the limits on substantive due process claims

arising from land-use disputes:

This Court has repeatedly held that
rejections of development projects and
refusals to issue building permits do not
ordinarily implicate substantive due process.
Even where state officials have allegedly
violated state law or administrative
procedures, such violations do not ordinarily
rise to the level of a constitutional
deprivation. The doctrine of substantive due
process does not protect individuals from
all governmental actions that infringe liberty

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 or injure property in violation of some law.
Rather, substantive due process prevents
governmental power from being used for
purposes of oppression, or abuse of government
power that shocks the conscience, or action
that is legally irrational in that it is not
sufficiently keyed to any legitimate state
interest. Although we have the left door
slightly ajar for federal relief in truly
horrendous situations, the threshold for
establishing the requisite abuse of government
power is a high one indeed.

SFW Arecibo Ltd. v. Rodríguez, 415 F.3d 135, 141 (1st Cir. 2005)

(internal citations omitted).

In Arecibo, real estate developers sued after a state

planning board incorrectly determined that their building permit

had expired. Id. at 137. When suit was filed, the state court had

already determined that the permit had been wrongly revoked. Id.

at 138. We affirmed the dismissal of the substantive due process

claim because the complaint stated "[i]n its strongest form . . .

that the [p]lanning board made an erroneous decision in violation

of state law," which is insufficient to establish a substantive due

process violation. Id. at 141. So too here. Plaintiffs allege

that the Town violated substantive due process by enacting the

growth control ordinance without following the procedures mandated

by New Hampshire law. But, as in Arecibo, the claim is only that

the Town's violation of state law caused Plaintiffs harm. This is

not enough. See id. at 141; see also Licari v. Ferruzzi, 22 F.3d

344, 349 (1st Cir. 1994)(affirming dismissal of substantive due

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process claim based on allegations that a town planning board

improperly revoked the developer's building permits and delayed

processing and approval of an application for an amended permit);

PFZ Properties, Inc. v. Rodríguez, 928 F.2d 28, 32 (1st Cir. 1991)

(affirming dismissal of substantive due process claim were

developer alleged that government agency failed to comply with

agency regulations or practices in the review and approval process

of construction plans).

The equal protection claim fares no better. Plaintiffs

contend that they stated a viable equal protection claim by

pleading that, in denying the permits, the Town treated them

differently from other "similarly situated property owners." But

only in "extreme circumstances" will a land-use dispute give rise

to an equal protection claim. Arecibo, 415 F.3d at 142. It is

insufficient for a plaintiff merely to allege that the permitting

entity violated state law in denying a permit request. Id.

"Absent facts reflecting more fundamental discrimination, [a

plaintiff] ha[s] not stated a claim under the Equal Protection

Clause of the Fourteenth Amendment." Id. Yet, that is all that is

alleged here.

Affirmed.

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