2910 Ga. Ave. LLC v. Dist. of Columbia

2910 GEORGIA AVENUE LLC, Plaintiff, v. DISTRICT OF COLUMBIA, et al., Defendants.

Civil Action No. 12-1993 (CKK)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

December 29, 2015

MEMORANDUM OPINION AND ORDER

Plaintiff 2910 Georgia Avenue LLC filed suit against the District of Columbia, Mayor Vincent C. Gray, and Michael P. Kelly in his official capacity as Director for the Department of Housing and Community Development ("DHCD"), alleging that the District of Columbia's Inclusionary Zoning Program ("IZ Program") constitutes an unconstitutional taking and violates Plaintiff's substantive due process and equal protection rights.

Presently before the Court are Plaintiff's [45] Motion to Reopen Discovery for a Limited Purpose and Plaintiff's [43] Motion for Leave to File Amended Complaint. Upon consideration of the pleadings,¹ the relevant legal authorities, and the record as a whole, the Court GRANTSPlaintiff's [45] Motion to Reopen Discovery for a Limited Purpose and GRANTS Plaintiff's [43] Motion for Leave to File Amended Complaint.

As explained more fully below, the Court shall reopen discovery so that both parties may conduct limited discovery within the parameters set forth in this Memorandum Opinion and Order. The Court shall allow the parties 45 days from the date of this Memorandum Opinion and Order, until February 12, 2016, to complete this discovery.

The Court also observes that this discovery concerns facts at issue in the parties' motions for summary judgment that have been filed with the Court, but have not yet been fully briefed. Because this new round of discovery affects the arguments presented by the parties in their motions for summary judgment, the Court shall deny without prejudice the pending motions for summary judgment and permit the parties to file renewed motions after the parties have fully developed the factual record through the above-described discovery. Accordingly, the Court DENIES without prejudice Defendants' [49] Motion for Summary Judgment and DENIES without prejudice Plaintiff's [50] Motion for Summary Judgment.

The parties shall file a Joint Status Report by February 19, 2016, proposing a schedule of dates for filing and briefing the parties' renewed motions for summary judgment. The Court shall then issue an order setting a briefing schedule.

I. BACKGROUND

The factual allegations and legal claims at issue in the case are set forth fully in the Court's September 30, 2013 Memorandum Opinion granting in part and denying in part Defendant's Motion to Dismiss. See 2910 Georgia Ave. LLC v. D.C., 983 F. Supp. 2d 127, 129-33 (D.D.C. 2013) reconsideration denied, 59 F. Supp. 3d 48 (D.D.C. 2014).

In short, Plaintiff is a real estate company which purchased the property at 2910 GeorgiaAvenue N.W. in 2009, intending to construct a twenty-two unit condominium building. Compl. ¶ 19. Plaintiff subsequently set aside two of the twenty-two units for sale in order to comply with the District of Columbia's IZ program, which was passed with the intent to increase the amount of affordable housing in the District. Id. ¶ 21; see also D.C. Mun. Regs. tit. 11, § 2600.1. Between May 2011—when the DCHD began marketing the two set-aside units—and December 13, 2012—when Plaintiff filed its Complaint—neither of the two set-aside units were sold. Compl. ¶¶ 22-36. By contrast, the twenty other units in the development sold for market rates between $225,000 and $404,000 within four months. Id. ¶ 27. Plaintiff contended in its Complaint that the two set-aside units had failed to sell, in part, due to an Inclusionary Zoning Covenant (the "IZ Covenant") that rendered units "effectively unmarketable." Id. ¶¶ 32, 58.

On December 13, 2012, Plaintiff filed a three-count Complaint against Defendants, alleging that (1) the District of Columbia's IZ Program constitutes an unconstitutional taking; (2) the IZ Program violates Plaintiff's substantive due process rights and equal protection rights; and (3) Plaintiff is entitled to a declaratory judgment stating that: (a) the IZ Program is unconstitutional; (b) Defendants Gray and Kelly, acting under color of state law, have deprived Plaintiff of rights, privileges, and immunities secured by the United States Constitution, in violation of 42 U.S.C. § 1983; and (3) Plaintiff is entitled to compensation. See Compl. ¶¶ 56-84.

On September 30, 2013, the Court denied in part and granted in part Defendants' Motion to Dismiss Plaintiff's Complaint. See Mem. Op. & Order, ECF Nos. [20], [21]. In relevant part, the Court granted Defendants' Motion to Dismiss Plaintiff's takings claims against the general "set-aside" requirement of the IZ Program writ large on the basis that the claim was not ripe, but denied Defendants' Motion to Dismiss with respect to Plaintiff's challenge to the IZ Covenant, finding that it was ripe. Mem. Op. at 1. On April 9, 2014, the Court denied Defendants' [24]Motion for Reconsideration of the Court's holding that Plaintiff's challenge to the IZ Covenant was ripe.² See Mem. Op & Order, ECF Nos. [31], [32]. After those decisions, Plaintiff's claims, as to all counts, remained viable as to Plaintiff's challenge to all aspects of the IZ Covenant.

Discovery closed in this case on May 7, 2015.³ On May 8, 2015, the Court held a Status Conference, at which Plaintiff expressed an intent to file a Motion for Leave to Amend its Complaint. See Order, ECF No. [42]. Later that day, the Court issued an order setting May 20, 2015 as the deadline by which Plaintiff would have to file said Motion. Id. The Court's Order also included a briefing schedule contemplating that the parties would file their Cross-Motions for Summary Judgment on or before June 29, 2015, with Oppositions due on July 20, 2015 and Replies due on August 3, 2015. Id.

In compliance with the Court's Order, Plaintiff filed its Motion for Leave to File Amended Complaint on May 20, 2015. See id. In this motion, Plaintiff seeks leave to amend its Complaint in order to: (1) add factual allegations based on information learned during the discovery, (2) update factual allegations in the original Complaint that require amendment due to the passage of time, and (3) include an additional cause of action for denial of procedural due process based on the facts and information either learned or confirmed in discovery. See Pl.'s Mot. to Amend, ECF No. [43], at 1.

One week later, on May 27, 2015, Plaintiff filed a second motion, a Motion to ReopenDiscovery for a Limited Purpose. See Pl.'s Mot. to Reopen Discovery, ECF No. [45]. In this motion, Plaintiff seeks to reopen discovery regarding the April 10, 2015 sale of one of the two set-aside units, Unit C-02, including Defendants' approval of the buyer's eligibility for the IZ program. See id. at 3. Plaintiff's motion also included a request to extend the summary judgment briefing schedule to allow for the additional discovery. See id. at 7.

On June 29, 2015, both parties filed motions for summary judgment. See Defs.' Mot. for Summary Judgment, ECF No. [49] and Pl.'s Mot. for Summary Judgment, ECF No. [50]. Two days later, on July 1, 2015, the Court issued an order staying the briefing schedule of the motions for summary judgment until the Court resolved the outstanding motions filed by Plaintiff. See ECF No. [51]. The Court's Order also required the parties to file supplemental briefing as to Plaintiff's outstanding motions. See id.

II. LEGAL STANDARD

A. Motion to Reopen Discovery under Rule 16(b)(4)

Federal Rule of Civil Procedure 16(b)(4) provides that the Court may modify a scheduling order where there is "good cause." Fed. R. Civ. P. 16(b)(4). In determining whether a motion to reopen discovery satisfied this "good cause" requirement, a court should consider the following factors:

(1) whether trial is imminent; (2) whether the request is opposed; (3) whether the non-moving party would be prejudiced; (4) whether the moving party was diligent in obtaining discovery within the guidelines established by the court; (5) the foreseeability of the need for additional discovery in light of the time allotted by the district court; and (6) the likelihood that discovery will lead to relevant evidence.

In re Rail Freight Fuel Surcharge Antitrust Litig., 281 F.R.D. 12, 14 (D.D.C. 2011) (quoting Childers v. Slater, 197 F.R.D. 185, 187-88 (D.D.C. 2000)). In determining whether there isgood cause to reopen discovery, a court should particularly focus on whether the moving party was diligent in obtaining discovery. Id.

B. Motion to Amend under Rule 15(a)(2)

Under the Federal Rules of Civil Procedure, a party may amend its pleadings once as a matter of course within twenty-one days after service or within twenty-one days after service of a responsive pleading. Fed. R. Civ. P. 15(a)(1). Where, as here, a party seeks to amend its pleadings outside that time period, they may do so only with the opposing party's written consent or the district court's leave. Fed. R. Civ. P. 15(a)(2). The decision whether to grant leave to amend a complaint is within the discretion of the district court, but leave should be freely given unless there is a good reason to the contrary. Willoughby v. Potomac Elec. Power Co., 100 F.3d 999, 1003 (D.C. Cir. 1996).

"When evaluating whether to grant leave to amend, the Court must consider (1) undue delay; (2) prejudice to the opposing party; (3) futility of the amendment; (4) bad faith; and (5) whether the plaintiff has previously amended the complaint." Howell v. Gray, 843 F. Supp. 2d 49, 54 (D.D.C. 2012) (citing Atchinson v. District of Columbia, 73 F.3d 418 (D.C. Cir. 1996)); see also Foman v. Davis, 371 U.S. 178, 182 (1962). With respect to an amendment causing undue delay, "[c]ourts generally consider the relation of the proposed amended complaint to the original complaint, favoring proposed complaints that do not 'radically alter the scope and nature of the case.' " Smith v. Cafe Asia, 598 F.Supp.2d 45, 48 (D.D.C. 2009) (citation and internal quotations...