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Petworth Holdings, LLC v. Bowser

United States District Court, District of Columbia

October 3, 2019

PETWORTH HOLDINGS, LLC, et al., Plaintiffs,
v.
MURIEL BOWSER, et al., Defendants.

          MEMORANDUM OPINION

          JAMES E. BOASBERG UNITED STATES DISTRICT JUDGE

         Early last year, Plaintiffs Petworth Holdings, LLC and John Formant filed suit in this Court asserting that a local statute regulating certain gas stations in the District of Columbia violates the Fifth Amendment to the United States Constitution. Citing an intervening change in the law governing Fifth Amendment challenges, Plaintiffs now move to amend their Complaint to add a new claim under 42 U.S.C. § 1983 and a new defendant, the District of Columbia. This change would allow them to pursue monetary damages, as opposed to merely injunctive and declaratory relief. Because Plaintiffs have offered a plausible rationale for their delay, no prejudice would accrue from such an amendment, and Defendants have failed to establish futility, the Court will grant the Motion.

         I. Background

         Plaintiffs are the owners of a property on which currently sits a full-service Shell gas station. See Compl., ¶¶ 3-6. As the Court described in its prior Opinion, they allege that certain recent amendments to a longstanding D.C. statute that regulates the alteration and conversion of such gas stations in the District have unconstitutionally impeded their ability to sell this property. See Petworth Holdings, LLC v. Bowser, 308 F.Supp.3d 347, 350-51 (D.D.C. 2018). The Act as amended provides: “No retail service station which is operated as a full service retail service station on or after April 19, 1977, may be discontinued, nor may be structurally altered, modified or otherwise converted . . . into a non full service facility or into any other use.” D.C. Code § 36-304.01(b). Plaintiffs allege that the Act now prevents property owners such as themselves from selling their land because potential purchasers do not want to operate a full-service gas station “in perpetuity.” Compl., ¶ 36.

         Plaintiffs originally filed their Complaint in January 2018, seeking a declaration that the Act violates the Fifth and Thirteenth Amendments to the United States Constitution and an injunction barring the City from enforcing it. Defendants moved to dismiss. In April 2018, the Court granted Defendants' Motion as to Plaintiffs' Thirteenth Amendment claim only. In doing so, the Court held that Plaintiffs had sufficiently pled that the Act “frustrated their reasonable investment expectations” for their property and had thereby stated a plausible Fifth Amendment claim. See Petworth, 308 F.Supp.3d at 357. The parties proceeded to discovery, which is not yet complete.

         As noted above, Plaintiffs have recently moved to amend their Complaint, seeking to add the District of Columbia as a defendant and a new claim under 42 U.S.C. § 1983. Defendants consent to the former proposed addition but oppose the latter, which the Court now resolves. See ECF No. 36 (Opp.) at 3 n.4.

         II. Legal Standard

         A plaintiff may amend her complaint once as a matter of right within 21 days of serving it or within 21 days of being served a responsive pleading. See Fed.R.Civ.P. 15(a)(1). Otherwise, a plaintiff must seek consent from the defendant or leave from the court. See Fed.R.Civ.P. 15(a)(2). In such circumstances, however, the Court ought to “freely give leave [to amend a pleading] when justice so requires.” Id. The Supreme Court has instructed that leave to amend should accordingly be granted “[i]n the absence of . . . undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962). In this Circuit, “[a]lthough the grant or denial of leave to amend is committed to a district court's discretion, it is an abuse of discretion to deny leave to amend unless there is sufficient reason.” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (citing Foman, 371 U.S. at 182). Under Rule 15(a), “the non-movant generally carries the burden in persuading the court to deny leave to amend.” Nwachukwu v. Karl, 222 F.R.D. 208, 211 (D.D.C. 2004).

         III. Analysis

         Defendants argue that Plaintiffs' proposed amended Complaint is unduly delayed, unfairly prejudicial, and futile. The Court considers each of these arguments in turn.

         A. Undue Delay

         Defendants first assert that Plaintiffs' Motion to Amend - filed about twenty months after their Complaint - should be rejected because they exhibited undue delay in filing it. Delay, indeed, “is a valid reason to reject a party's attempt to add a new theory of liability to a complaint.” Elkins v. District of Columbia, 690 F.3d 554, 565 (D.C. Cir. 2012). But the delay must be “undue” - that is, the reason for the delay is pertinent to the determination of whether leave to amend should be granted. See Williamsburg Wax Museum, Inc. v. Historic Figures, Inc., 810 F.2d 243, 247-48 (D.C. Cir. 1987) (affirming denial of leave to amend when plaintiff “offered no explanation for its tardiness”). To justify their delay here, Plaintiffs point to a Supreme Court decision issued just a few months ago, which they argue cleared the way for their proposed amendment. See ECF No. 35 (Pl. Motion to Amend) at 1 (citing Knick v. Township of Scott, 139 S.Ct. 2162 (2019)).

         By way of background, in Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985), the Supreme Court reversed the granting of a jury award of $350, 000 to a plaintiff who had brought a takings claim against a regional planning commission under § 1983. In doing so, the Court held that plaintiffs could not bring certain takings claims in federal court against state or local governments before seeking “compensation [for that taking of property] through the procedures the State has provided for doing so.” Id. at 194-96. Knick, however, overturned Williamson County and explicitly eliminated any “exhaustion requirement for § 1983 takings claims.” 139 S.Ct. at 2172. The Court instead held that “a property owner may bring a Fifth Amendment claim under § 1983 upon the taking of his property without just compensation by a local government” and need not first seek compensation through state-provided procedures. Id. at 2179. Plaintiffs therefore argue that Knick “represents a change in the law” that justifies their addition of a § 1983 claim to their Complaint. See Pl. Motion to Amend at 1-2.

         The Court concurs with Plaintiffs that the Knick decision, at a minimum, clarified their litigation options respecting their takings challenge, plausibly excusing their not including such a claim in their original Complaint. It is true that prior to Knick, courts had sometimes waived Williamson County's exhaustion requirement (and perhaps this Court would have done the same had Plaintiffs originally brought a § 1983 claim), but even then, confusion reigned among the lower courts as to when, if at all, such waiver could occur. For example, courts were split as to whether facial - as distinct from as-applied - takings claims were exempt from WilliamsonCounty's state-litigation requirements. Compare Conjunta del Seguro de Responsabilidad Obligatorio v. Flores Glarza, 484 F.3d 1, 14 (1st Cir. 2007) (holding that “facial statutory challenges” are not blocked by Williamson County's state-litigation requirement), with Alto Eldorado Partnership v. County of Santa Fe, 634 F.3d 1170, 1175-77 (10th Cir. 2011) (reaching the opposite conclusion). Courts were also split as to whether Williamson County was a “prudential” doctrine (and thereby discretionary) or “jurisdictional” (and thereby mandatory). Compare Peters v. Village of Clifton, 498 F.3d 727, 734 (7th Cir. 2007) (“Williamson County's ripeness requirements are prudential in nature.”), with Snaza v. City of St. Paul, 548 F.3d 1178, 1182 (8th Cir. 2008) (“We have held that Williamson ...


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