We all know that Knick v. Township of Scott, 139 S. Ct. 2162 (2019) only knocked out the “state action” prong of the two-part Williamson County takings ripeness requirement. You may not need to pursue and lose compensation via state procedures to ripen a takings claims, but still active is the “final decision” requirement under which the alleged taker must have made a decision applying the regulation to the property owner, so that a reviewing court can determine what, if any, uses the owner may make of the property under the regulation. 

Here’s the latest on that one, from the U.S. Court of Appeals for the Fifth Circuit. In DM Arbor Court, Ltd. v. City of Houston, No. 20-20194 (Feb. 12, 2021), the court was faced with a choice between final decision ripeness on one hand (and the notion that an unripe case can become ripe down the road when the government does get around to making a final decision), and on the other the rule that appeals courts generally take the record as they find it, and events after the trial court’s final judgment can’t be considered by the appeals court.

In this case, the district court dismissed the plaintiff’s takings claim as unripe because the plaintiff filed suit challenging the city’s placing a “hold” on repair permits and refusing to issue such permits, even though the city had not actually determined whether the plaintiff could get one of those permits. Slip op. at 2. After the dismissal, however, the city public works director denied the permit because of the risk of flooding. 

So what to do on appeal? Reverse because the case had ripened post-final judgment? Or affirm because the district court’s decision was correct at the time it made its decision? The Fifth Circuit chose the latter path. 

First, it noted that the district court was indeed correct: “At the time the district court ruled, Arbor Court’s claims were not ripe.” Slip op. at  3. See also slip op. at 5 (For City of Houston development permits, the City Council has the final say. Floodplain Ordinance art. II, § 19-23(g). When this matter was pending in district court, the Council had not yet reached a decision about Arbor Court’s permits. Because the City had not taken a “final, definitive position” about the permits, the asserted claims were not ripe.”). The court noted that takings ripeness is a timing thing, and that an unripe case “becomes ripe when it ‘would not benefit from any further factual development and when the court would be in no better position to adjudicate the issues in the future than it is now.'” Slip op. at 3-4. 

Because after the district court’s ruling the city had made a final decision, and “[a]s ripeness is perculiarly a question of timing, it is the situation now rather than the situation at the time of the District Court’s decision that must govern.'” Slip op. at 5 (quoting Regional Rail Reorganization Act Cases, 419 U.S. 102, 140 (1974)). Thus, the court of appeals may consider post-judgment events when evaluating ripeness.

This is more so correct because takings ripeness is a prudential rule, not jurisdictional, and a district court only declined to exercise jurisdiction even though it possessed jurisdiction. But even though that side of the equation is prudential, the court concluded the other side is not: if the case ripened on appeal, “we have an obligation to exercise the jurisdiction Article III and Congress grant us when any impediments, such as prudential concerns, have been eliminated.” Slip op. at 7.

The court also addressed the city’s claim that to hold the case ripe on appeal did not take into account it was the plaintiff’s premature lawsuit that raised this problem in the first place:

The remand should not be viewed as a “reward” to Arbor Court. As is proper when a dispute is not ripe, the district court dismissed the case without prejudice. A without-prejudice dismissal allows the filing of a new lawsuit once the case ripens. In fact, Arbor Court did just that after the City Council denied the permit; there is now a second suit in district court (though it was stayed pending the outcome of this appeal). We have trouble seeing the practical difference between Arbor Court’s pursuing the merits of its claims on remand in this case as opposed to going forward in the recently filed case. Either way, Arbor Court will be able to litigate its claims. The City is understandably frustrated that it had to devote resources to litigating ripeness because Arbor Court filed this suit prematurely. But Arbor Court’s premature filing of its claims does not appear to have benefitted it in any way; pursuit of this appeal rather than just proceeding in the newly filed suit has only delayed resolution of the merits.

Slip op. at 8.

Ripeness dismissal vacated, case sent back down.

DM Arbor Court, Ltd. v. City of Houston, No. 20-20194 (5th Cir. Feb. 12, 2021)