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Coleman v. District of Columbia

United States District Court, District of Columbia

April 13, 2015

BENJAMIN COLEMAN, through his Conservator, ROBERT BUNN, et al., Plaintiffs,
v.
DISTRICT OF COLUMBIA, Defendant.

MEMORANDUM OPINION

EMMET G. SULLIVAN, District Judge.

Benjamin Coleman brought this lawsuit to challenge a District of Columbia law that directed the sale of a lien on his home after he failed to pay a $133.88 property-tax bill. That law permitted the private purchaser of the lien to add $4, 999 in interest, costs, and fees to Mr. Coleman's bill and, when Mr. Coleman could not pay, to institute a foreclosure proceeding. After the foreclosure proceeding, the private purchaser obtained title to Mr. Coleman's home. Mr. Coleman, however, received nothing, although the amount of equity he had in his home far surpassed the amount he admittedly owed in taxes, interest, costs, and related fees. Because the loss of this surplus equity was dictated by District of Columbia law, Mr. Coleman sued to challenge that law. His claim is that the taking of his excess equity-the amount of equity minus the taxes and related costs he admits that he owed-violated his constitutional rights under the Takings Clause of the Fifth Amendment to the United States Constitution. As a remedy for the alleged constitutional violation, Mr. Coleman asked this Court to award him monetary damages and to issue a declaratory judgment. Mr. Coleman brought this case not only on his own behalf, but also as a representative of all District property owners who suffered a loss of excess equity due to the District's tax-sale law.

In September of 2014, this Court rejected the District's attempt to dismiss the case. See Coleman ex rel. Bunn v. District of Columbia, No. 13-1456, 2014 WL 4819092 (D.D.C. Sept. 30, 2014). Subsequently, the Court permitted Mr. Coleman to amend his Complaint to add a second named plaintiff, the Estate of Jean Robinson. Ms. Robinson, like Mr. Coleman, lost her excess equity due to the District's tax-sale law. Her son, Wellington Robinson, as personal representative of her estate, seeks the same relief as Mr. Coleman.

Mr. Coleman and Ms. Robinson's Estate now ask the Court to certify this lawsuit as a class action, to permit them to represent all other District of Columbia property owners who similarly lost equity in excess of the amount of taxes and related fees they owed because of the tax-sale law. Upon consideration of their motion, the response and reply thereto, the applicable law, the entire record, and the oral argument, the Court concludes that Mr. Coleman and Ms. Robinson's Estate are entitled to certification as a class action and GRANTS their motion.

I. Background

A. The Challenged Tax-Sale Statutes

"The District of Columbia's laws governing the procedure for collecting delinquent property taxes are codified in Chapter 13A of title 47 of the D.C. Code." Coleman, 2014 WL 4819092, at *2. When a property-tax payment becomes delinquent, that tax obligation "automatically become[s] a lien on the real property." D.C. Code § 47-1331(a). The District is then required to "sell all real property on which the tax is in arrears." Id. § 47-1332(a). These sales follow a defined procedure:

"At least 30 days before" any such sale is to be advertised, "the Mayor shall mail to the person who last appears as owner of the real property on the tax roll... a notice of delinquency." Id. § 47-1341(a). Once thirty days have passed "from the mailing of the notice of delinquency, " the District must advertise that the property "will be sold at public auction because of taxes." Id. § 47-1342(a). At this public sale, the District must sell the property "in its entirety, " id. § 47-1343, "to the purchaser who makes the highest bid." Id. § 47-1346(a)(2). Sales are not to be conducted "for less than the amount of the taxes, " however. Id. § 47-1346(c).

Coleman, 2014 WL 4819092, at *2.

During the six months following the sale, "the purchaser may not foreclose the original owner's right to redeem the property." Id. (citing D.C. Code § 47-1370(a)). The original owner is able to redeem the property "by paying to the District the amount paid by the purchaser... exclusive of surplus with interest thereon, ' as well as other taxes, interest, and penalties paid by a purchaser, ' and expenses for which the purchaser is entitled to reimbursement.'" Id. (citing D.C. Code § 47-1361(a)).

After the redemption period closes, the purchaser "may file a complaint to foreclose the right of redemption of the real property." D.C. Code § 47-1370(a). "The purchaser of the tax-sale certificate must bring the action against the original owner of the property and the District of Columbia, as well as any entity with a particular interest in the property." Coleman, 2014 WL 4819092, at *2 (citing D.C. Code § 47-1371(b)(1)). The Court has described the potential effects of such a legal action:

The law permits the Superior Court to issue a final judgment "foreclosing the right of redemption, " which bars the original owner from redeeming the property and vests in the purchaser a deed in fee simple. See id. § 47-1382(a). In doing so, the law permits the taking of not only the amount of delinquent taxes, plus any costs, fees, and interest, but also the entirety of the original owner's equity in the property.

Id.

B. The District's Amended Tax-Sale Statute

After this lawsuit was filed in 2013, the D.C. Council passed two temporary amendments to the District's tax-sale law. On October 4, 2013, the Council passed an emergency amendment, which served, among other things, "to cancel any tax sale that occurred for the July 2013 tax sale of a resident's real property who is a senior citizen, veteran, or disabled individual" and "to require the District to pay the owner of record before the tax sale any amount... in excess of the amount of taxes due to the District." District Real Property Tax Sale Emergency Act, A20-179, pmbl.; see also id. § 2. On October 17, 2013, the District passed a temporary amendment, which codified the October 4th emergency amendment. See District Real Property Tax Sale Temporary Act of 2013, A20-194, § 2.

In 2014, the D.C. Council enacted another temporary emergency measure, which expired on August 26, 2014. See Residential Real Property Equity and Transparency Emergency Amendment Act of 2014, A20-342. That amendment modified the procedures for future tax sales to, among other things, provide for the return of a portion of the excess equity to the former homeowner after the sale occurs. See id. § 101(c)(31). A permanent amendment to the District's tax-sale law, with similar effect, has now been passed. See D.C. Fiscal Year 2015 Budget Support Act of 2014, A20-424, § 7102(c)(30). That amendment appears to have taken effect on February 26, 2015. See B20-0750 - Fiscal Year 2015 Budget Support Act of 2014, D.C. Council, http://lims.dccouncil. us/Legislation/B20-0750 (last visited April 13, 2015).

C. Procedural History

This lawsuit was filed on behalf of Mr. Coleman by Robert Bunn, who was appointed by the Superior Court "to manage Mr. Coleman's legal and financial affairs." Compl., ECF No. 1 ¶ 15. The District moved to dismiss this case, arguing that the Court lacked jurisdiction over Mr. Coleman's claims and that he failed to state a claim for a violation of the Takings Clause. See Def.'s Mot. to Dismiss, ECF No. 5. While that motion was pending, Mr. Coleman moved for class certification. See First Mot. to Certify Class, ECF No. 12.

The Court held a hearing on the District's motion to dismiss on September 26, 2014, and issued its Opinion denying the motion on September 30, 2014. See Coleman, 2014 WL 4819092. The Court's Order denying the motion to dismiss directed the parties to "file supplemental briefs addressing the effect, if any, of the accompanying Memorandum Opinion on plaintiff's pending motion for class certification." Order, ECF No. 17 at 1. While the parties were briefing this issue, Mr. Coleman moved for leave to submit an amended complaint, to add as a named plaintiff the Estate of Jean Robinson. See Mot. to Amend, ECF No. 20. The District opposed the motion on the grounds that amendment would be futile because Ms. Robinson's will had not been admitted to probate, and her son, Wellington Robinson, had not been appointed as representative of her estate. See Opp. to Mot. to Amend, ECF No. 22. At Mr. Coleman's request, the Court deferred ruling on this motion while probate proceedings were underway.

On December 29, 2014, Mr. Coleman informed the Court that Ms. Robinson's will had been admitted to probate and that Wellington Robinson had been appointed personal representative of the estate. See Pl.'s Status Report, ECF No. 29. The Court granted the motion to amend the following day. See Minute Order of December 30, 2014. In light of the addition of a new potential class representative, the Court denied without prejudice Mr. Coleman's motion for class certification and directed the filing of a renewed motion to address "whatever effect, if any, the new plaintiff may have on the class-certification analysis." Id.

The plaintiffs filed their motion for class certification on January 9, 2015. See Pls.' Mem. in Supp. of Mot. to Certify Class ("Mem."), ECF No. 31-1. In that motion, they seek to certify two classes. See id. at 4. The first, "the damages class, " is defined as:

All persons who owned residential property on which the District of Columbia assessed a lien for an unpaid property tax deficiency, and where following the sale of a tax deed, such property was foreclosed upon and title transferred pursuant to D.C. Code §§ 47-1330 to 47-1385 and where such property included equity above the amount of real estate taxes, interest, penalties, expenses and attorney's fees at the time a tax deed was issued.

Id. The second class, "the declaratory relief class, " is defined slightly differently:

All persons who own or owned residential property on which the District of Columbia has assessed a lien for an unpaid property tax deficiency, and for which lien the District subsequently sold the right to foreclose the right of redemption for the property pursuant to D.C. Code §§ 47-1330 to 47-1385 and where such property included equity above the amount of real estate taxes, interest, penalties, expenses and attorney's fees at the time a tax deed was issued.

Id. The District opposes the motion for class certification, Def.'s Opp. to Mot. to Certify Class ("Opp."), ECF No. 33, and the plaintiffs have filed a reply brief. See Pls.' Reply in Supp. of Mot. to Certify Class ("Reply"), ECF No. 34. At the Court's request, the parties filed supplemental briefs on March 18, 2015 answering a question not addressed in either parties' pleadings. See Pls.' Suppl. Br., ECF No. 35; Def.'s Suppl. Br., ECF No. 36; Part III.B.1, infra. The Court held oral argument on the motion on March 25, 2015, and the motion is now ripe for resolution.

II. Standing

"Any analysis of class certification must begin with the issue of standing." Prado-Steinman ex rel. Prado v. Bush, 221 F.3d 1266, 1280 (11th Cir. 2000) (quotation marks and alteration omitted); see also In re Lorazepam & Clorazepate Antitrust Litig., 289 F.3d 98, 108 (D.C. Cir. 2002) ("The question of constitutional standing... is a prerequisite to Rule 23 class certification because it goes to the court's jurisdiction."). "To satisfy Article III's standing requirement, a plaintiff ordinarily must establish that (1) he or she has suffered an injury-in-fact; (2) there is a causal connection between the injury and the conduct complained of; and (3) the injury will likely be redressed by a favorable decision.'" Assoc. Builders & Contractors, Inc. v. Shiu, 30 F.Supp. 3d 25, 34 (D.D.C. 2014) (quoting In re Polar Bear Endangered Species Act Listing, 627 F.Supp.2d 16, 24 (D.D.C. 2009)).

Plaintiffs also "bear[] the burden of showing that [they have] standing for each type of relief sought." Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). When a party seeks a declaratory judgment, this requires that the case be one "of actual controversy within [the Court's] jurisdiction." 28 U.S.C. § 2201(a). "To establish that a matter is a controversy rather than an abstract question, a party seeking declaratory relief must show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.'" Covington v. JPMorgan Chase, No. 9-30, 2014 WL 3734265, at *7 (D.D.C. July 30, 2014) (quoting Hoffman v. District of Columbia, 643 F.Supp.2d 132, 140 (D.D.C. 2009)).

Plaintiffs have asserted, and the District does not dispute, that the Damages Class has standing. See Mem. at 5.[1] The District argued in its opposition brief that the Declaratory Relief Class lacks standing because it contains members whose claims would be rendered moot by the enactment of amendments to the District's tax-sale law. See Opp. at 25-27. Those amendments went into effect soon after the parties finished briefing the motion for class certification. During the March 25, 2015 hearing, the plaintiffs conceded that the Court should consider defining the Declaratory Relief Class in a manner that would render it identical to the Damages Class. The District agreed that this would absolve any standing issue. Accordingly, the Court will consider whether to certify the Declaratory Relief Class, defined as:

All persons who owned residential property on which the District of Columbia assessed a lien for an unpaid property tax deficiency, and where following the sale of a tax deed, such property was foreclosed upon and title transferred pursuant to D.C. Code §§ 47-1330 to 47-1385 and where such property included equity above the amount of real estate taxes, interest, penalties, expenses and attorney's fees at the time a tax deed was issued.

Mem. at 4. This class may seek a retrospective declaratory judgment because its claims are "intertwined with a claim for monetary damages that requires [the Court] to declare whether a past constitutional violation occurred." Lippoldt v. Cole, ...


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