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Miles v. Township of Barnegat

2009 WL 2840733 (U.S. Ct. App. 3rd Cir. 2009) (Unpublished)

CONDEMNATION; DUE PROCESS — An owner has no actionable substantive due process claim in federal courts for an inverse taking of its property if it does not first pursue a just compensation claim in state court.

Property owners inherited six contiguous parcels. Over the course of several years, overflow from the owners’ detention basins flooded their properties creating a man-made wetland. This rendered the property unbuildable. The owners claimed the municipality created public rights of way on the property, approved plans for water drainage from adjacent properties, and granted easements to private development corporations for water drainage onto their property. The property owners also claimed that the Pinelands Commission, which had previously declared the property to be buildable, changed its position and declared part of the property a “wetland.” Further, they contended that: (a) the Department of Environmental Protection allowed private parties to file fraudulent applications for the placement of wells on their property; and (b) various private parties placed wells on their property and granted easements to utility companies without their consent. The property owners filed a Section 1983 complaint against the municipality and various private parties. In their complaint, they alleged violations of their Fifth Amendment rights under the Takings Clause, violations of procedural due process, and a conspiracy to encroach on and diminish their property. They also raised state law claims, including a claim that the municipality had fraudulently changed their properties’ boundaries on various maps.

The United States District Court dismissed the complaint in its entirety, ruling that it lacked jurisdiction to consider the takings claims because they were not yet ripe. Even if a taking had occurred, the Court concluded that the property owners failed to avail themselves of New Jersey’s eminent domain procedures for obtaining compensation through the Eminent Domain Act. The Court also dismissed the owner’s procedural due process claims because New Jersey afforded them a full judicial mechanism to challenge the municipality’s decision to build a road on their property. It dismissed the remaining Section 1983 claims for failure to state a plausible claim of “state action” claim against to the private parties charged with violating the statute. Finally, it refused to exercise supplemental jurisdiction over the state law claims. The property owners appealed.

The Court of Appeals affirmed. First, it agreed with the lower court that the property owners failed to provide a plausible connection between the private party defendants and the governmental agency or official such that their private actions would be considered “state action.” Second, it agreed with the lower court that the takings were not ripe for review as the owners did not avail themselves of state remedies for inverse condemnation claims, i.e., by requesting a writ of mandamus from New Jersey’s courts compelling the governmental entity to initiate condemnation proceedings. In this regard it noted that without resort to the Act, there was no actionable substantive due process claim unrelated to the taking of the property. Thus, they were not ripe for review until the property owners pursued their just compensation remedies in state court. Finally, since there was no justiciable federal question, the Court determined that the United States District Court did not abuse its discretion in declining to exercise supplemental jurisdiction over the state law claims.

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