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Flying J Inc. v. City of New Haven

December 5, 2008

FLYING J INC., PLAINTIFF-APPELLANT,
v.
CITY OF NEW HAVEN, A POLITICAL SUBDIVISION OF THE STATE OF INDIANA, BRIAN YOH, INDIVIDUALLY AND AS PLAN DIRECTOR AND ZONING ADMINISTRATOR OF THE CITY OF NEW HAVEN, AND TERRY E. MCDONALD, INDIVIDUALLY AND AS MAYOR OF THE CITY OF NEW HAVEN, DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Indiana, Fort Wayne Division. No. 1:07-CV-237 RM-Robert L. Miller, Jr., Chief Judge.

The opinion of the court was delivered by: Flaum, Circuit Judge.

ARGUED NOVEMBER 4, 2008

Before BAUER, FLAUM, and WILLIAMS, Circuit Judges.

Flying J purchased 53.3 acres in New Haven, Indiana in the hopes of constructing a travel plaza and various other developments, including hotels and restaurants, on that land. Unfortunately, the New Haven Plan Commission was not as sanguine about the development plans, and after two adverse zoning decisions Flying J sued New Haven in Indiana state court. After losing in the trial court, Flying J prevailed on appeal, and the Indiana Supreme Court's decision not to review the case made Flying J's victory final. The victory proved to be short-lived, however. As the state court litigation was winding down, New Haven amended its zoning ordinance and limited all service stations (such as Flying J's travel plaza) to two acres in size. Needless to say, Flying J's proposed development was not permitted under the amended ordinance. Flying J then filed suit in federal court, alleging that New Haven's actions violated their rights to equal protection and due process. New Haven then filed a motion to dismiss for lack of subject matter jurisdiction, charging that the case was not ripe, and a motion to dismiss for failure to state a claim. The district court found that the controversy was ripe and thus that it had subject matter jurisdiction over the case, but granted the motion to dismiss for failure to state a claim.

Flying J appeals this decision, and for the following reasons we affirm the district court's dismissal.

I. Background

Flying J develops travel plazas, facilities that offer food, fuel, groceries, financial services, and other services to truck drivers and other travelers. Flying J was planning on constructing a new travel plaza on 53.3 acres that Flying J purchased in New Haven, Indiana. The land is designated as a C-1(P) General Commercial Planned District, which permits a variety of uses including automobile service stations, stores, businesses, general retail, food service, motels, and various other uses. Flying J's proposed use of the site would include a 17.7 acre travel plaza and room to expand with other developments, including hotels and restaurants.

To start the development process, in 2005 Flying J made a presentation to Brian Yoh, the Plan Director and Zoning Administrator for the City of New Haven. Yoh determined that some of the proposed uses were not permitted in property with a C-1 zoning designation, and he informed Flying J of this fact shortly after they gave their initial presentation. Displeased, Flying J appealed to the Board of Zoning Appeals, which affirmed Yoh's decision. Flying J then took the matter to the Indiana state courts. The Circuit Court of Allen County granted summary judgment for the Board of Zoning Appeals on September 23, 2005. Flying J then appealed to the Indiana Court of Appeals, and in 2006 that court reversed the circuit court and instructed it to enter summary judgment for Flying J, concluding that Yoh and the Board of Zoning Appeals had erroneously ruled that some of Flying J's proposed uses were not permitted in property zoned C-1. The Board of Zoning Appeals unsuccessfully filed petitions for rehearing and for transfer to the Indiana Supreme Court, and the appellate court decision became final on May 3, 2007.

In light of this ruling, Flying J's representatives met with Yoh and other city officials in late 2006 and 2007 to discuss how they could move forward with their development plans. At this time, and unbeknownst to Flying J, the City of New Haven was moving forward with plans to amend the zoning ordinance in a way that would eliminate Flying J's plans to construct a service center on the property. The amendment limited "service stations" in property zoned C-1 to two acres, an amendment that apparently would not affect any of the existing service stations in the area. The City Plan Commission conducted a public hearing on the change on February 20 but did not give Flying J specific notice of the hearing. The Common Council of the City of New Haven voted to adopt the amendment on February 27, 2007. Flying J, once again, was not given notice of this meeting. At a third meeting two weeks later, the Common Council again voted to adopt the amendment. Again, Flying J did not receive notice of the meeting.

Flying J in fact learned about the ordinance through litigation, when the Zoning Board filed a Motion to Correct Error with the Circuit Court, claiming that Flying J's proposed use was permitted only under the old zoning plan, in effect when they first applied in 2005, but not the new zoning plan. The Circuit Court denied this motion, but nevertheless in August 2007, Yoh informed Flying J that its application for development of its 53.3 acre tract in New Haven must comply with the amended zoning ordinance.

On appeal, Flying J makes additional factual allegations, which they claim are consistent with the general tenor of the complaint and thus are appropriate to add at the appellate stage. These facts allege conflicts of interest on the part of Ronald Steinman, a member of the New Haven Common Council who voted for the amended ordinance, and Michelle Hill, a member of the Board of Zoning Appeals. According to the allegations, both separately own parcels of land near the 53.3 acres that Flying J is planning to develop. Flying J argues that its proposed development would affect the value of the property owned by Hill and Steinman, and that this conflict explains New Haven's vigilance in attempting to stop the development of the travel plaza.*fn1

On September 11, 2007, Flying J filed suit in federal court alleging that the City of New Haven, Yoh, and the city's mayor, Terry McDonald (collectively "New Haven") had violated its rights to substantive due process, procedural due process, and equal protection under both the United States Constitution and the Indiana Constitution, and seeking declaratory relief and damages. New Haven responded by filing a motion to dismiss for lack of subject matter jurisdiction, arguing that Flying J was actually positing a Takings Clause claim that was not yet ripe, and an alternative motion to dismiss for failure to state a claim under Rule 12(b)(6). On April 28, 2008, the district court granted the city's Rule 12(b)(6) motion. This appeal followed.

II. Discussion

This appeal involves two issues. First, New Haven challenges the subject matter jurisdiction of this court, arguing that Flying J's constitutional claims are actually takings claims, and that because Flying J has not gone through the process for receiving compensation from the city for the alleged taking the claim is not ripe. Flying J challenges the district court's dismissal of the case under Rule ...


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