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Sherman v. Town of Chester

United States Court of Appeals, Second Circuit

May 16, 2014

NANCY J. SHERMAN, Plaintiff-Appellant,
v.
TOWN OF CHESTER, Defendant-Appellee.[*]

Argued March 18, 2014

Page 555

Appeal from the United States District Court for the Southern District of New York. No. 12-cv-647 -- Edgardo Ramos, Judge. Appeal from an order of the United States District Court for the Southern District of New York (Edgardo Ramos, Judge) granting defendant Town of Chester's motion to dismiss plaintiff Steven M. Sherman's complaint. We hold that Sherman's takings claim was ripe under Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). Seeking a final decision from the Town would be futile because the Town used unfair and repetitive procedures to avoid a final decision. Additionally, the " state procedures" prong of Williamson County is satisfied because the Town removed the case from state court. Sherman also adequately alleged a taking. Accordingly, we REVERSE that part of the District Court's decision that dismissed Sherman's takings claim. We VACATE the District Court's decision to dismiss Sherman's federal non-takings claims solely on ripeness grounds and to decline to exercise supplemental jurisdiction over Sherman's state claw claims. Finally, we AFFIRM the District Court's decision to dismiss certain claims on the merits.

MICHAEL D. DIEDERICH, JR. Stony Point, NY, for Nancy J. Sherman.

ANTHONY CARDOSO (Steven C. Stern on brief), Sokoloff Stern LLP, Carle Place, NY, for Town of Chester.

J. David Breemer, Pacific Legal Foundation, Sacramento, CA, for amicus curiae Pacific Legal Foundation in support of appellant.

Before: STRAUB, SACK, and LOHIER, Circuit Judges.

OPINION

Page 556

Straub, Circuit Judge.

Hungry Joe packed up his bags and wrote happy letters home. He had flown the 25 missions required to complete a tour of duty. But things were not so simple on Catch-22 's Pianosa island. He soon discovered that Colonel Cathcart had just raised the number of missions to 30,

Page 557

forcing Hungry Joe to unpack his bags and rewrite his happy letters. At the time, Yossarian had flown 23 missions.

The Colonel later increased the number to 35. When Yossarian was just three away from that mark, the number was increased to 40, and then to 45. When Yossarian had 44 missions under his belt, the Colonel made the number 50. And later 55.

When Yossarian reached 51 missions, he knew it was no cause to celebrate: " He'll raise them," Yossarian understood. He appealed to squadron commander Major Major to be exempted from flying his four remaining missions. " Every time I get close he raises them," Yossarian complained. Major Major responded, " Perhaps he won't this time." But of course Yossarian was right. Colonel Cathcart raised the number to 60, then 65, then 70, then 80, with no end in sight.

Plaintiff Steven M. Sherman must have felt a lot like Yossarian in his decade of dealing with defendant Town of Chester. In 2000, Sherman applied for subdivision approval while he was in the process of buying a nearly 400 acre piece of land for $2.7 million. That application marked the beginning of his journey through the Town's ever-changing labyrinth of red tape. In 2003, the Town enacted a new zoning ordinance, requiring Sherman to redraft his proposed development plan. When he created a revised proposal in 2004, the Town again enacted new zoning regulations. When he created another revised plan in 2005, the Town changed its zoning laws once more. And again in 2006. And again in 2007.

On top of the shifting sands of zoning regulations, the Town erected even more hurdles. Among other tactics, the Town announced a moratorium on development, replaced its officials, and required Sherman to resubmit studies that he had already completed. When the Town insisted that Sherman pay $25,000 in consultants' fees before he could obtain a hearing, he might have thought, " The Colonel will just raise it again." And he would have been right. After paying the $25,000, he was told he owed an additional $40,000, and that he would also have to respond to a lengthy questionnaire.

By the time this lawsuit was filed, over ten years had passed. In that time, Sherman became financially exhausted -- forced to spend $5.5 million on top of the original $2.7 million purchase. The District Court (Edgardo Ramos, Judge ) ruled that Sherman's claim under the Takings Clause was not ripe under Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), because Sherman had not received a final decision on his property and seeking a final decision would not be futile. The court reasoned that while Sherman may have to jump through more hoops in the future, he had not established that his application would definitely be denied in the end. To Sherman, this must have sounded a lot like: " Perhaps he won't raise the number this time."

We conclude that under these circumstances, Sherman was not required to obtain a final decision from the Town. Sherman's takings claim was ripe and adequately alleged. Accordingly, we REVERSE that part of the District Court's decision that dismissed the takings claim, and we REMAND for further proceedings consistent with this opinion.

BACKGROUND

The allegations recited below are taken from the complaint, and we assume they are true for the purposes of this appeal.

Page 558

This case concerns the decade's worth of red tape put in place by the Town of Chester, its Town Board, and its Planning Board. The Town Board is the governing body of the Town, and the Planning Board appears to give at least preliminary approval to development proposals.

In March of 2000, Sherman applied to the Planning Board for subdivision approval so that he could use and develop MareBrook. The proposed project would include 385 units of housing as well as " an equestrian facility, baseball field, tennis courts, clubhouse, on-site restaurant and a golf course that wove through the property." When Sherman completed his purchase of the property in 2001, it was already zoned for residential use. But soon thereafter, Sherman's troubles began.

I. The Moratorium

In July 2001, the Town Board announced that it was imposing a six month moratorium on major subdivision approvals retroactive to May 1, 2001. At least two members of the Town Board " expressed the view that the Moratorium was specifically aimed at Plaintiff's MareBrook project." Sherman was the only developer affected even though other projects were similarly situated.

When the six month period expired, the moratorium was extended, which " singularly affected" Sherman. During the extension, Sherman applied for a " minor" subdivision approval that was permitted under the moratorium. However, the Town still refused to allow Sherman to pursue the application.

Sherman brought suit against the Town in state court, and as a result of the lawsuit, the Town ended the moratorium, but not until January 2003. In other words, the six month moratorium lasted over a year and a half.

II. Draft Environmental Impact Statement and the First Zoning Change

In October 2003, the Planning Board " deemed complete" Sherman's Draft Environmental Impact Statement (" DEIS" ). That determination established that Sherman's application to the Town was satisfactory in form and content.

In 2003, the Town Board approved the first in a series of changes to its zoning regulations. When Sherman learned of the new requirements early the next year, he was assured by the Town Planner, Garling Associates, that he could meet all its requirements with only " a modest amount of additional work" and that he would soon obtain preliminary approval.

III. More Changes to the Zoning Regulations

Approximately five months later, sometime in late May to early June 2004, Sherman finished revising his plan. But the Town had already amended its zoning regulations. Garling Associates, which helped write the new regulations, did not tell Sherman about the changes even though it was advising Sherman about complying with the 2003 regulations. These amendments created several new requirements, further delaying Sherman.

It took him approximately eleven months to once again revise his application. In May 2005 -- five years after he first sought subdivision approval -- he finally met with some success. The Planning Board approved the MareBrook proposal. But this success was not to last. The Town Board refused to entertain Sherman's application, despite holding meetings concerning another development.

One month later, the Town amended its zoning law for a third time without informing Sherman in advance. Sherman revised his application again, and in February

Page 559

2006, the Town for the fourth time changed its zoning law without warning Sherman. Sherman responded by submitting yet another revised plan, this one in March 2007. That same month, the Town changed its zoning for the fifth time, and it once again did not let Sherman know these changes were coming.

Fed up, Sherman filed suit in federal court in May 2008, a precursor to the case before us now.

IV. Further Obstruction

In November and December of 2008, Sherman resubmitted his MareBrook application and Supplemental DEIS. By this point, over eight years had passed since Sherman first applied for subdivision approval.

A. The Town Engineer

In January 2009, the Town Engineer gave Sherman a list of corrections to the 2008 Supplemental DEIS. As part of that list, the Town Engineer demanded final designs for water and sewer plants. But Sherman could not submit the final water and sewer designs until other aspects of the plan -- like the number and location of the homes -- were finalized. That, in turn, required preliminary approval, which is the very thing he was trying to obtain from the Town Engineer.

A few months later, the Town appointed a new Town Engineer. The new appointee needed time to get up to speed on MareBrook. The Town billed Sherman for the expense of having the new Town Engineer review the entire MareBrook project, even though Sherman already paid for the first engineer to conduct that same review. The new Town Engineer had an entirely new set of questions, concerns, and items for Sherman to address. Despite that, for ...


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