Pulte Home Corp. v. Montgomery Cnty.

271 F.Supp.3d 762

PULTE HOME CORPORATION and Shiloh Farm Investments, LLC, Plaintiffs,

v.MONTGOMERY COUNTY, MARYLAND, et al., Defendants.

Case No.: GJH–14–3955

United States District Court, D. Maryland, Southern Division.

Signed August 25, 2017

Deborah Jean Israel, Louis J. Rouleau, Lela M. Ames, Womble Carlyle Sandridge and Rice LLP, Washington, DC, for Plaintiffs.

John Paul Markovs, Patricia P. Via, Paul F. Leonard, Jr., Haley Michelle Roberts, Office of the County Attorney, Rockville, MD, Erek Lawrence Barron, Whiteford Taylor and Preston LLP, Bethesda, MD, Howard Ross Feldman, Aaron L. Casagrande, Patrick Dugan McKevitt, Whiteford Taylor and Preston LLP, Michael Andrew Schollaert, Baker Donelson, Baltimore, MD, John J. Hathway, Whiteford Taylor and Preston LLP, Washington, DC, Tracey Ann Harvin, William Charles Dickerson, Elizabeth Lynn Adams, Maryland National Capital Park and Planning Commission, Riverdale, MD, for Defendants.

MEMORANDUM OPINION

GEORGE J. HAZEL, United States District Judge

Pulte Home Corporation and Shiloh Farm Investments, LLC (collectively, "Plaintiffs"), made a substantial investment in 541 acres of undeveloped land in Clarksburg, Maryland in hopes of developing the property. Steps taken by Montgomery County, Maryland (the "County") and the Maryland–National Capital Park and Planning Commission (the "Commission" and collectively, "Defendants") to change zoning, impose new restrictions and delay or deny water and sewer service to Plaintiffs' property have frustrated Plaintiffs' efforts and led to this litigation. Specifically, Plaintiffs have asserted claims against Defendants, pursuant to 42 U.S.C. § 1983, alleging violations of substantive and procedural due process and equal protection and that the Defendants' actions amounted to a taking for public use without just compensation. Plaintiffs have additionally asserted their claims pursuant to the Maryland Constitution. Pending before the Court is Defendants' Motion for Judgment on the Pleadings Pursuant to Fed. R. Civ. P. 12(c). ECF Nos. 145 and 146.¹ A hearing on the Motion was held on August 8, 2017. See Loc. Rule 105.6 (D. Md. 2016). For the following reasons, Defendants' Motion is granted.

I. BACKGROUND²

This dispute stems from zoning actions taken by the County regarding 541 acres of undeveloped land in Clarksburg. Maryland near the Ten Mile Creek, west of I–270, which is either owned by or under contract to be purchased by Plaintiffs. ECF No. 2 at 1–2. In 1994, the County designed and approved the Clarksburg Master Plan (the "Master Plan") to guide the development of Clarksburg along the I–270 corridor, while implementing measures to protect the local water quality. Id. ¶ 10. Plaintiffs' property was to be zoned for residential development, and was designated as a Transferable Development Rights ("TDR") receiving area. Id. ¶ 9. TDRs are development credits which, when purchased, allow property holders to develop their property at a higher density. The Master Plan divided Clarksburg development into four sequential stages, and Plaintiffs' property was included in Stage 4. Id. ¶ 8. Included with the staging plan were a number of "triggers" to be met before Stage 4 could proceed, id. ¶ 10, and the Master Plan directed that "[o]nce all of the ... conditions have been met, the County Council will consider Water and Sewer Plan amendments that would permit the extension of public facilities to the Ten Mile Creek area." Id. ¶ 11. The Master Plan also provided that "after conducting various assessments," "the County Council may" choose to "[d]efer action on a Water and Sewer Plan category change, pending further study or consideration as deemed necessary and appropriate by the Council." or "[c]onsider such other land use actions as are deemed necessary." ECF No. 191–1 at 23.

Plaintiffs allege that between July 2004 and February 2006, they invested nearly $50 million in purchasing property to the west of I–270, and spent an additional $12 million purchasing TDRs from Montgomery County farmers. ECF No. 2 ¶ 15–16. Plaintiffs further allege that the "triggers" contained in the Master Plan for Stage 4 development were met in 2009, and that Plaintiffs filed a Water and Sewer Category Change Request application on May 12, 2009. Id. ¶ 12. On September 17, 2010, sixteen months after Plaintiffs had submitted their application. Defendants stated that Plaintiffs' application would not be processed until early Spring 2011. Id. ¶ 18. However, Defendants did not act on Plaintiffs' application during that period either, nor did they act on it after Plaintiffs resubmitted the application in August 2012. Id. ¶ 19. In December 2012, Plaintiffs submitted a "Pre–Application Concept Plan" to Defendants, seeking review of their plan for their property. Id. ¶ 22. Defendants refused to review Plaintiffs' application, and informed them that it was "too early to get into having pre-applications meetings on sites in the Stage 4 area." Id. ¶ 23. Plaintiffs submitted a number of letters to various Montgomery County officials requesting a decision on their pre-application, but did not receive a substantive response. Id. ¶¶ 24–29.

On October 9, 2012, the Montgomery County Council requested that the Planning Board study the Ten Mile Creek watershed and prepare an amendment to the Master Plan. Id. ¶ 36. Plaintiffs or their agents submitted a number of letters to Defendants and appeared at public hearings, expressing concern over the proposed amendment. Id. ¶¶ 37–53. Despite Plaintiffs' vigorous opposition, on October 25, 2013, the Planning Board submitted a draft amendment to the County Council, proposing a heightened limit on the amount of impervious terrain in any new development, a heightened open space requirement, and a downzoning of Plaintiffs' property from a residential classification to an agricultural classification. Id. ¶ 54. The County Council subsequently held public hearings, during which Plaintiffs presented written and in-person testimony, and conducted a number of closed working sessions. Id. ¶¶ 57, 63. In March and April 2014, the County Council approved the 10 Mile Creek Area Limited Amendment (the "Amendment"), id. ¶¶ 65–66, which was subsequently adopted by the Commission. Plaintiffs allege that the "cumulative effect of the severe and interrelated planning, zoning, and regulatory restrictions" is that "Pulte can develop no more than 17 percent of its property ..." ECF No. 2 ¶ 83.

On November 14, 2014. Plaintiffs filed a Complaint in Montgomery County Circuit Court. ECF No. 2. On December 18, 2014, with the consent of the County, the Commission removed the case to this Court. ECF No. 1. The Complaint alleges a litany of constitutional and state law violations including: violation of substantive due process rights under the Maryland and United States constitutions and the Civil Rights Act of 1871 (Count I, ECF No. 2 at 54); violation of equal protection rights under the Maryland and United States constitutions and the Civil Rights Act of 1871 (Count II, ECF No. 2 at 57); violation of the takings clauses of the Maryland and United States constitutions (Count III. ECF No. 2 at 60); violation of procedural due process rights under the Maryland and United States constitutions and the Civil Rights Act of 1871 (Count IV, ECF No. 2 at 62); and violation of Article 19 of the Maryland constitution (Count V, ECF No. 2 at 64). The Commission filed a Motion to Dismiss on January 2, 2015, and that motion was denied. ECF Nos. 19 and 33. The Commission then filed a Motion for Reconsideration, which was also denied. ECF Nos. 36 and 46. The County did not originally move to dismiss the Complaint and instead filed a timely Answer on January 14, 2015. ECF No. 24. The Defendants now move for Judgment on the Pleadings.³ ECF No. 145–1. The Court reviewed submissions from both parties and held a hearing on August 8, 2017. ECF No. 194.

II. STANDARD OF REVIEW

Pursuant to Rule 12(c), "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. Pro. 12(c). In ruling on a Rule 12(c) motion, courts apply "the same standard as motions brought under Rule 12(b)(6)." Massey v. Ojaniit , 759 F.3d 343, 347 (4th Cir. 2014) (citing Edwards v. City of Goldsboro , 178 F.3d 231, 243 (4th Cir. 1999) ). To survive a Rule 12(b)(6) motion, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Courts will dismiss complaints under Rule 12(c) if "after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief." Edwards , 178 F.3d at 244. This Court's role is to test "the sufficiency of the complaint." and not to "resolve the merits of the plaintiff's claims or any disputes of fact." Drager v. PLIVA USA. Inc. , 741 F.3d 470, 474 (4th Cir. 2014). As such, the Court will assume all well-pleaded factual allegations in the complaint to be true. See Belmora LLC v. Bayer Consumer Care AG , 819 F.3d 697, 702 (4th Cir. 2016).

III. DISCUSSION

Defendants seek judgment on all claims, arguing that Plaintiffs have not alleged a property interest, that Defendants had a rational basis for their actions and that Plaintiffs have not alleged a taking. In support of their arguments, Defendants specifically point to the language in the 1994 Master Plan and the 2014 Amendment, which they attach to their Motion. Plaintiffs argue that the Court should not consider the documents attached to Defendants' Motion and that they have alleged sufficient facts to state each claim. The Court...