North Mill Street, LLC v. the City of Aspen; the Aspen City Council

20-1130Court of Appeals for the Tenth Circuit27 juil. 2021

Texte intégral

PUBLISH
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
_________________________________
NORTH MILL STREET, LLC,
Plaintiff - Appellant,
v.
THE CITY OF ASPEN; THE ASPEN
CITY COUNCIL,
Defendants - Appellees.
No. 20-1130
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:19-CV-00188-PAB-GPG)
_________________________________
Christopher D. Bryan (David L. Lenyo, with him on the briefs), of Garfield & Hecht,
Aspen, Colorado, for Plaintiff - Appellant.
Josh A. Marks, Berg Hill Greenleaf & Ruscitti, Boulder, Colorado, for Defendants -
Appellees.
_________________________________
Before HOLMES, BALDOCK, and MATHESON, Circuit Judges.
_________________________________
MATHESON, Circuit Judge.
_________________________________
North Mill Street, LLC (“NMS”) owns commercial property in Aspen, Colorado.
It sued the City of Aspen and the Aspen City Council (collectively, the “City”) in federal
court. The complaint alleged several claims, including that the City’s changes to Aspen’s
FILED
United States Court of Appeals
Tenth Circuit
July 27, 2021
Christopher M. Wolpert
Clerk of Court
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zoning laws and denial of a rezoning application caused a regulatory taking of NMS’s
property without just compensation in violation of the Takings Clause of the Fifth
Amendment. The district court concluded NMS’s action was not ripe under Article III of
the Constitution because NMS has not obtained a final decision from the City on how the
property may be developed. The court thus dismissed the case for lack of jurisdiction
under Federal Rule of Civil Procedure 12(b)(1). Exercising jurisdiction under 28 U.S.C.
§ 1291, we affirm on the alternative ground that NMS’s claims lack prudential ripeness.1
I. BACKGROUND
A. Factual History
NMS owns Mill Street Plaza (“MSP”), a parcel of commercial real estate in
Aspen, Colorado. MSP is located within a Service Commercial Industrial (“SCI”) zoning
district. When NMS’s predecessor in interest purchased the property in 2007, free
1 This opinion contains many acronyms. To aid the reader, we list them as
follows:
Acronym Definition
AACP Aspen Area Community Plan
CCMP Civic Center Master Plan
CDD Community Development Department
FMR Free Market Residential
LUC Land Use Code
MSP Mill Street Plaza
NMS North Mill Street
NMSI North Mill Street Investors
P&Z Planning and Zoning
PD Planned Development
SCI Service Commercial Industrial
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market residential (“FMR”) development was allowed in the SCI zone as a “conditional”
or “ancillary” use. 2 Of the four SCI-zoned properties in Aspen, only MSP lacked any
FMR units. NMS alleged that without the opportunity to develop FMR units at MSP,
“future redevelopment of the Mill Street Plaza is not economically viable.” App., Vol. 1
at 60.
Ordinance 29
In 2017, the Aspen City Council adopted Ordinance 29. Ordinance 29 amended
Chapter 26.710 of the Aspen Land Use Code (“LUC”) to eliminate FMR housing as a
permitted conditional use within the SCI zoning district. 3
Section 26.310.040 of the LUC provides the standards the City must consider
when amending the LUC, as it did with Ordinance 29. The standards include:
 “Whether the objectives of the proposed amendment
further[] an adopted policy, community goal, or objective
2 NMS purchased MSP in 2018 from North Mill Street Investors (“NMSI”). In
2007, NMSI purchased the property for the purpose of “redeveloping it as a mixed use
building, incorporating service, commercial and light industrial uses, together with free
market residential units.” App., Vol. 1 at 52. NMSI assigned to NMS “all of its rights,
interests and claims pertaining to Mill Street Plaza, including, but not limited to, those
reflected in the Rezoning Application.” Id. at 56. For simplicity, we will refer to NMS
and NMSI collectively as “NMS” in this opinion.
3 The LUC governs zoning districts in Aspen and is codified as Title 26 of the
Aspen Municipal Code. See Aspen, Colo. Code, § 26.104.010 (2021),
https://library.municode.com/co/aspen/codes/municipal_code.
“Federal Rule of Evidence 201 authorizes federal courts to take judicial notice of
adjudicative facts, including provisions in municipal ordinances, at any stage of the
proceedings.” Boyz Sanitation Serv., Inc. v. City of Rawlins, 889 F.3d 1189, 1196 n.9
(10th Cir. 2018).
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of the City including, but not limited to, those stated in the
Aspen Area Community Plan,” and
 “Whether the objectives of the proposed amendment are
compatible with the community character of the City and
in harmony with the public interest and the purpose and
intent of this Title.”
LUC § 26.310.040.
In the resolution adopting Ordinance 29, the City Council found that the
amendments to the LUC prohibiting FMR development in the SCI zone met or exceeded
these standards. App., Vol. 1 at 101.
Rezoning Application
After Ordinance 29 was adopted, NMS filed a rezoning application with the City’s
Community Development Department (“CDD”).4 The application requested that the City
rezone MSP to a Mixed Use zoning district. Parcels that are zoned for Mixed Use may
combine commercial uses with FMR and affordable housing units.
The CDD staff prepared a report (the “CDD Report”) recommending denial of the
rezoning application. The CDD Report considered the review criteria for rezoning set
forth in Section 26.310.090 of the LUC. That section provides, “In reviewing an
amendment to the Official Zone District Map, the City Council and the Planning and
Zoning Commission shall consider,” among other things:
4 NMSI originally filed the rezoning application. NMS purchased MSP from
NMSI in 2018 while the rezoning application was pending.
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 “Whether the proposed amendment is compatible with
surrounding zone districts and land uses, considering
existing land uses and neighborhood characteristics;” and
 “Whether the proposed amendment is consistent and
compatible with the community character in the City and
in harmony with the public interest and the intent of [the
LUC].”
LUC § 26.310.090(a), (d). The staff found that the rezoning proposal failed to meet
either criterion. App., Vol. 2 at 38-41.
The CDD Report also found the loss of SCI-zoned land would run counter to the
goals of the “Aspen Area Community Plan” (“AACP”) and the “Civic Center Master
Plan” (“CCMP”). According to the Report, “[t]hough not a regulatory document, the
[AACP] provides aspirational guidance for long term goals of the Aspen community.”
Id. at 30. The CCMP, “which was adopted by the City Council in 2006, is a regulatory
document that contains a section relating to sustainable locally serving businesses.” Id.
at 30.
The City’s Planning and Zoning (“P&Z”) Commission, having considered the
CDD Report, adopted a resolution recommending that the City Council should deny the
rezoning application (the “P&Z Resolution”). The P&Z Resolution agreed with and
adopted the CDD Report’s findings. It found:
[P]ursuant to Land Use Code Section 26.310.090(A) the
rezoning proposal is not compatible with surrounding zone
districts and land uses, when considering existing land use
and neighborhood characteristics; and, the Planning and
Zoning Commission further finds that the proposed rezoning
is inconsistent with the goals and statements of the Aspen
Area Community Plan (AACP), the 2006 Civic Center Master
Plan, and the 2018 Commercial, Lodging, and Historic
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District Design Standards and Guidelines—River Approach
Area . . . .
Id. at 52. The City Council, acting on the P&Z Commission’s recommendation, denied
the rezoning application.
PD Review
Planned Development (“PD”) review is a process that “allows for the site specific
development of mixed land uses in circumstances that warrant variation from the
standard permitted zone district land uses.” App., Vol. 1 at 96-97.
The purpose of Planned Development review is to encourage
flexibility and innovation in the development of land which,
[among other things,] [p]romotes the purposes, goals and
objectives of applicable adopted regulatory plans, [and]
[a]chieves a more desirable development pattern, a higher
quality design and site planning, a greater variety in the type
and character of development and a greater compatibility with
existing and future land uses than would be possible through
the strict application of the zone district provisions.
LUC § 26.445.010. The LUC sets out a detailed procedure through which a landowner
may submit a proposal for a specific Planned Development. See id. ch. 26.445.
In PD review, “[a] development application may request variations in the allowed
uses permitted in the zone district.” Id. § 26.445.060. Section 26.445.060 of the LUC
provides that the City “shall consider” the following four criteria in determining whether
to vary existing zoning restrictions for a Planned Development:
(a) The proposed use variation is compatible with the
character of existing and planned uses in the project and
surrounding area. In meeting this standard, consideration
shall be given to the existence of similar uses in the
immediate vicinity, as well as how the proposed uses may
enhance the project or immediate vicinity.
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(b) The proposed use variation is effectively incorporated into
the project’s overall mix of uses. In meeting this standard,
consideration shall be given to how the proposed uses
within a project will interact and support one another.
(c) The location, size, design, and operating characteristics of
the proposed use variation minimizes adverse effects on
the neighborhood and surrounding properties.
(d) The proposed use variation complies with applicable
adopted regulatory plans.
Id. Section 26.445.060 further specifies that “[t]he permitted and conditional uses
allowed on the property according to its zoning shall be used as a guide, but not an
absolute limitation, to the land uses which may be considered during the review.” Id.
Although NMS applied to rezone MSP for Mixed Use, it has not submitted a
development application for PD review.
B. Procedural History
Rather than seek PD review, NMS sued the City of Aspen and the Aspen City
Council in federal district court. 5 NMS’s amended complaint asserted Fifth and
Fourteenth Amendment substantive due process, equal protection, and regulatory takings
claims under 42 U.S.C. § 1983. In addition to relief under § 1983, NMS requested a
declaratory judgment that Ordinance 29 is invalid and unenforceable, and a permanent
5 In 2019—with the rezoning application still pending—NMS initially commenced
a state law inverse condemnation action in Colorado state court. At the time, Williamson
County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985), required
that a plaintiff bring an inverse condemnation action in state court before asserting a
Takings Clause claim in federal court. The Supreme Court has since overruled that
requirement in Knick v. Township of Scott, Pennsylvania, 139 S. Ct. 2162 (2019).
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injunction against its enforcement. The amended complaint also asserted a “Reverse
Spot Zoning and/or Piecemeal Downzoning” claim under “the United States and
Colorado Constitutions, state statutes, the City of Aspen Home Rule Charter, and City of
Aspen Municipal ordinances.” App., Vol. 1 at 33-34.
The City moved to dismiss the amended complaint under Fed. R. Civ. P. 12(b)(1),
arguing that NMS’s claims were not ripe and the court therefore lacked subject matter
jurisdiction.6 It argued that the City Council had “not definitively determined if free
market residential uses are permissible at Mill Street Plaza” because NMS had not yet
pursued PD review. Id. at 79.
The district court agreed with the City and dismissed the amended complaint
without prejudice for lack of subject matter jurisdiction under Rule 12(b)(1).7
6 The City also moved under Rule 12(b)(6), arguing that NMS failed to state
viable claims for relief under § 1983. The district court did not reach that argument.
7 The district court concluded that, because NMS’s Takings Clause claim is
unripe, all of NMS’s remaining claims fall with it. As we explain later in this opinion,
due process and equal protection claims that rest upon the same facts as a concomitant
takings claim are subject to the same ripeness requirements as the takings claim. See
Schanzenbach v. Town of La Barge, 706 F.3d 1277, 1282-83 (10th Cir. 2013). NMS has
not articulated an independent legal or factual basis for its “reverse spot zoning” claim.
To the extent that claim was premised on state law, the district court declined to exercise
supplemental jurisdiction over it.
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II. DISCUSSION
A. Legal Background
Regulatory Takings
The Fifth Amendment’s Takings Clause provides that “private property [shall not]
be taken for public use, without just compensation.” U.S. Const. amend. V. The
Supreme Court has recognized that “government regulation of private property may, in
some instances, be so onerous that its effect is tantamount to a direct appropriation or
ouster—and that such ‘regulatory takings’ may be compensable under the Fifth
Amendment.” Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 537 (2005). The Court has
identified two categories of regulatory action that are “per se” takings: (1) “where
government requires an owner to suffer a permanent physical invasion of her property—
however minor,” and (2) “regulations that completely deprive an owner of ‘all
economically beneficial use’ of her property.” Id. at 538 (alteration omitted) (quoting
Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992)).
Outside of these categories, when a regulation
impedes the use of property without depriving the owner of
all economically beneficial use, a taking may still be found
based on a “complex of factors,” including (1) the economic
impact of the regulation on the claimant, (2) the extent to
which the regulation has interfered with distinct investment-
backed expectations, and (3) the character of the
governmental action.
Murr v. Wisconsin, 137 S. Ct. 1933, 1942 (2017) (quoting Palazzolo v. Rhode Island, 533
U.S. 606, 617 (2001)); see also Penn Cent. Transp. Co. v. City of New York, 438 U.S.
104, 124 (1978). “The general rule . . . is that while property may be regulated to a
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certain extent, if regulation goes too far it will be recognized as a taking.” Penn. Coal
Co. v. Mahon, 260 U.S. 393, 415 (1922).
Ripeness of a Takings Claim
a. The finality requirement
Ripeness doctrine draws “both from Article III limitations on judicial power and
prudential reasons for refusing to exercise jurisdiction.” Utah Republican Party v. Cox,
892 F.3d 1066, 1092 (10th Cir. 2018) (quotations omitted). Article III and prudential
ripeness are both “concerned with whether a case has been brought prematurely, but they
protect against prematureness in different ways and for different reasons.” Simmonds v.
I.N.S., 326 F.3d 351, 357 (2d Cir. 2003).
Until recently, the Supreme Court recognized “two independent prudential hurdles
to a regulatory takings claim brought against a state entity in federal court.” Suitum v.
Tahoe Reg’l Plan. Agency, 520 U.S. 725, 733-34 (1997). In Williamson County Regional
Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), the Court
held that a regulatory takings claim is not ripe until the plaintiff has (1) received a “final
decision regarding the application of the [challenged] regulations to the property at issue”
from “the government entity charged with implementing the regulations,” and (2) sought
“compensation through the procedures the State has provided for doing so.” Id. at
186, 194. In 2019, the Court overruled the second requirement in Knick v. Township of
Scott, 139 S. Ct. 2162, 2167 (2019). But Williamson County’s “finality” requirement
remains. Id. at 2169.
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The Supreme Court recently reaffirmed that “[w]hen a plaintiff alleges a taking in
violation of the Fifth Amendment, a federal court should not consider the claim before
the government has reached a ‘final’ decision.” Pakdel v. City & Cnty. of San Francisco,
141 S. Ct. 2226, 2228 (2021) (per curiam) (quoting Suitum, 520 U.S. at 737). This
finality requirement “responds to the high degree of discretion characteristically
possessed by land-use boards in softening the strictures of the general regulations they
administer.” Suitum, 520 U.S. at 738. “A final decision by the responsible state agency
informs the constitutional determination whether a regulation has deprived a landowner
of ‘all economically beneficial use’ of the property, or defeated the reasonable
investment-backed expectations of the landowner to the extent that a taking has
occurred.” Palazzolo, 533 U.S. at 618 (citations omitted). “These matters cannot be
resolved in definitive terms until a court knows ‘the extent of permitted development’ on
the land in question.” Id. (quoting MacDonald, Sommer & Frates v. Yolo Cnty., 477 U.S.
340, 351 (1986)). “After all, until the government makes up its mind, a court will be hard
pressed to determine whether the plaintiff has suffered a constitutional violation.”
Pakdel, 141 S. Ct. at 2228.
The finality requirement is satisfied when “there is no question about how the
regulations at issue apply to the particular land in question.” Id. at 2230 (alterations
omitted) (quoting Suitum, 520 U.S. at 739). A regulatory takings claim is therefore likely
to have ripened once “[(1)] it becomes clear that the agency lacks the discretion to permit
any development, or [(2)] the permissible uses of the property are known to a reasonable
degree of certainty.” Palazzolo, 533 U.S. at 620.
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Generally, a developer must “at least ‘resort to the procedure for obtaining
variances and obtain a conclusive determination by the [agency] whether it would allow’
the proposed development, in order to ripen its takings claim.” Suitum, 520 U.S. at 733
(alterations and citation omitted) (quoting Williamson Cnty., 473 U.S. at 193); see also
Alto Eldorado P’ship v. Cnty. of Santa Fe, 634 F.3d 1170, 1174 (10th Cir. 2011) (“First,
there must be a final decision about how a regulation will be applied to the property in
question, including whether the implementing administrative body will grant any waiver
or variance.”). But the Supreme Court has also instructed us to “bear in mind the purpose
that the final decision requirement serves,” explaining that “ripeness jurisprudence
imposes obligations on landowners because a court cannot determine whether a
regulation goes ‘too far’ unless it knows how far the regulation goes.” Palazzolo, 533
U.S. at 622 (quotations and alteration omitted). Thus, “[r]ipeness doctrine does not
require a landowner to submit applications for their own sake.” Id.
The Supreme Court recently explained that the “finality requirement is relatively
modest” and “nothing more than de facto finality is necessary.” Pakdel, 141 S. Ct.
at 2230. It is not an administrative exhaustion requirement. Id. at 2231. That is, it does
not require “compliance with an agency’s deadlines and other critical procedural rules.”
Id. at 2230 (quoting Woodford v. Ngo, 548 U.S. 81, 90 (2006)). But “a plaintiff’s failure
to properly pursue administrative procedures may render a claim unripe if avenues still
remain for the government to clarify or change its decision.” Id. at 2231.
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b. Futility
Some of our sister circuits have recognized futility as an “exception” to the
Williamson County final decision requirement.8 We have never explicitly done so. In
Landmark Land Co. of Oklahoma, Inc. v. Buchanan, we assumed without deciding that
futility may be an exception to the final decision requirement. 874 F.2d 717, 721-22
(10th Cir. 1989), abrogated on other grounds by Fed. Lands Legal Consortium ex rel.
Robart Est. v. United States, 195 F.3d 1190, 1195 (10th Cir. 1999). We also followed
that course in an unpublished decision. See Dakota Ridge Joint Venture v. City of
Boulder, 162 F.3d 1172 (Table), 1998 WL 704694 (10th Cir. 1998) (unpublished).
B. Analysis
We first discuss (1) whether the district court lacked subject matter jurisdiction
over NMS’s claims for lack of ripeness. As explained below, because Williamson
County’s finality requirement is prudential, not jurisdictional, we conclude that the
district court erred by dismissing the amended complaint for lack of jurisdiction. We
then address (2) whether NMS’s claims nonetheless should be dismissed due to lack of
8 See Freeman v. United States, 875 F.3d 623, 628 (Fed. Cir. 2017) (“A failure to
secure a final decision may be excused under the futility exception where an agency’s
decision makes clear that pursuing remaining administrative remedies will not result in a
different outcome.” (quotations and alteration omitted)); Murphy v. New Milford Zoning
Comm’n, 402 F.3d 342, 349 (2d Cir. 2005) (A property owner “need not pursue [further
administrative action] when a zoning agency lacks discretion to grant variances or has
dug in its heels and made clear that all such applications will be denied.”); Pascoag
Reservoir & Dam, LLC v. Rhode Island, 337 F.3d 87, 93 n.5 (1st Cir. 2003); Eide v.
Sarasota Cnty., 908 F.2d 716, 726 (11th Cir. 1990); Kinzli v. City of Santa Cruz, 818
F.2d 1449, 1454 (9th Cir. 1987).
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prudential ripeness, and we conclude they should. Finally, we consider (3) NMS’s
arguments concerning its non-takings claims. Because all of NMS’s claims are
prudentially unripe, we affirm the district court’s dismissal of the amended complaint.
Article III Jurisdiction
The district court concluded that it lacked subject matter jurisdiction over NMS’s
claims because NMS has not pursued PD review and thus has not received a “final
decision” from the City. The court therefore dismissed the amended complaint under
Rule 12(b)(1). Although we agree that NMS has failed to satisfy Williamson County’s
finality requirement, we do not agree that the district court lacked Article III subject
matter jurisdiction. But we hold dismissal was proper for lack of prudential ripeness.
a. Is the Williamson County finality rule jurisdictional?
The Supreme Court has said the existence of a “discretionary” procedure by which
a takings plaintiff “may regain . . . beneficial use of his land goes only to the prudential
‘ripeness’” of his challenge. Lucas, 505 U.S. at 1013. The Court later described
Williamson County’s ripeness requirements as “two independent prudential hurdles.”
Suitum, 520 U.S. at 733-34. And the Court has recognized, in addressing Williamson
County’s (now defunct) state-litigation requirement, that such prudential considerations
are “not, strictly speaking, jurisdictional.” Horne v. Dep’t of Agric., 569 U.S. 513, 526
(2013) (citing Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Env’t Prot., 560 U.S.
702, 729 & n.10 (2010)). This is so because a claim is “ripe insofar as Article III
standing is concerned” when the plaintiff “has been deprived of property.” Stop the
Beach Renourishment, 506 U.S. at 729 n.10; see Horne, 569 U.S. at 526 n.6 (“A ‘Case’
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or ‘Controversy’ exists once the government has taken private property without paying
for it. Accordingly, whether an alternative remedy exists does not affect the jurisdiction
of the federal court.”). 9
In Bateman v. City of West Bountiful, we stated that “whether a claim is ripe for
review bears on the court’s subject matter jurisdiction under Article III of the
Constitution,” and “a ripeness challenge, like most other challenges to a court’s subject
matter jurisdiction, is treated as a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(1).” 89 F.3d 704, 706 (10th Cir. 1996). We then applied the Williamson
County ripeness test within this jurisdictional framework, without referencing the
Supreme Court’s earlier statement in Lucas about prudential ripeness. Id. at 706-08; see
9 The majority of circuit courts that have addressed the issue also have described
Williamson County’s ripeness requirements as prudential rather than jurisdictional. See
Pakdel v. City & Cnty. of San Francisco, 952 F.3d 1157, 1169 (9th Cir. 2020), rev’d on
other grounds, 141 S. Ct. 2226 (2021) (“Because Williamson County’s ripeness
requirements are prudential, not jurisdictional, we do have some discretion whether to
impose them.”); Sherman v. Town of Chester, 752 F.3d 554, 561 (2d Cir. 2014)
(“Because Williamson County is a prudential rather than a jurisdictional rule, we may
determine that in some instances, the rule should not apply and we still have the power to
decide the case.” (quotations omitted)); Sansotta v. Town of Nags Head, 742 F.3d 533,
545 (4th Cir. 2013) (same); Rosedale Missionary Baptist Church v. New Orleans City,
641 F.3d 86, 88-89 (5th Cir. 2011) (“[T]he Supreme Court has . . . explicitly held that
Williamson County’s ripeness requirements are merely prudential, not jurisdictional.”);
Peters v. Vill. of Clifton, 498 F.3d 727, 734 (7th Cir. 2007) (“Williamson County’s
ripeness requirements are prudential in nature.”).
But see Snaza v. City of Saint Paul, 548 F.3d 1178, 1182 (8th Cir. 2008) (“[W]e
have held that Williamson County is jurisdictional.”); Perfect Puppy, Inc. v. City of
E. Providence, 807 F.3d 415, 420-21 (1st Cir. 2015) (noting that the First Circuit has
described Williamson County as jurisdictional, but “confess[ing] that we are not 100%
sure that the state-exhaustion requirement actually is jurisdictional”); Arrigoni Enters.,
LLC v. Town of Durham, 136 S. Ct. 1409, 1411-12 (2016) (Thomas, J., dissenting from
denial of cert.) (identifying split among courts of appeals).
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also Rocky Mountain Materials & Asphalt, Inc. v. Bd. of Cnty. Comm’rs of El Paso Cnty.,
972 F.2d 309, 311 (1992) (stating, without referencing Lucas, that a procedural due
process claim identical to a takings claim “should have been dismissed for lack of
jurisdiction on ripeness grounds”). But in cases decided after Bateman, the Supreme
Court has continued to describe both Williamson County requirements as “prudential
hurdles.” Suitum, 520 U.S. at 733-34; Horne, 569 U.S. at 526.10
The tension between Bateman and Supreme Court precedent has caused
significant confusion in our circuit. In SK Finance SA v. La Plata County, Board of
County Commissioners, we described Williamson County’s ripeness requirements as
“bear[ing] on the court’s subject matter jurisdiction.” 126 F.3d 1272, 1275-76 (10th Cir.
1997) (quoting Bateman, 89 F.3d at 706). Then, in B. Willis, C.P.A., Inc. v. BNSF
Railway Corp., we treated Williamson County as prudential, stating that where a plaintiff
“asserts a ‘genuine case or controversy,’ ripeness implicates only prudential concerns.”
531 F.3d 1282, 1299 n.20 (10th Cir. 2008). And in Alto Eldorado Partnership v. County
10 Bateman was decided when courts, including the Supreme Court, were
“sometimes . . . profligate in [their] use of [jurisdictional terminology].” Arbaugh v.
Y&H Corp., 546 U.S. 500, 510 (2006). “[T]he Supreme Court has instructed courts to
give ‘no precedential effect’ to such ‘drive-by jurisdictional rulings.’” Sinclair Wyo.
Refin. Co. v. A&B Builders, Ltd., 989 F.3d 747, 782 n.26 (10th Cir. 2021) (quoting Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 91 (1998)). Cases that “employ the
jurisdictional label with little or no analysis” are “exactly the sort of ‘drive-by
jurisdictional rulings’ the Court tells us to view with a jaundiced eye.” Hobby Lobby
Stores, Inc. v. Sebelius, 723 F.3d 1114, 1159 (10th Cir. 2013) (en banc) (Gorsuch, J.,
concurring). Such rulings “too easily can miss the critical differences between true
jurisdictional conditions and nonjurisdictional limitations on causes of action.” Reed
Elsevier, Inc. v. Muchnik, 559 U.S. 154, 161 (2010) (quotations and alteration omitted).
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of Santa Fe, we acknowledged the Supreme Court’s “characterization of the Williamson
County requirements as ‘prudential,’” but nonetheless affirmed the district court’s Rule
12(b)(1) dismissal. 634 F.3d at 1179-80 (2011).
Some district courts within our circuit, following Supreme Court precedent, have
treated Williamson County as prudential. E.g. River N. Props., LLC v. City & Cnty. of
Denver, No. 13-cv-1410-CMA-CBS, 2014 WL 1247813, at *4-*6 (D. Colo. Mar. 26,
2014); Race v. Bd. of Cnty. Comm’rs of the Cnty. of Lake, No. 15-cv-1761-WJM-KLM,
2016 WL 1182791, at *2 (D. Colo. Mar. 28, 2016); Lech v. Jackson, No. 16-cv-01956-
PAB-MJW, 2018 WL 10215862, at *5 (D. Colo. Jan. 8, 2018). But others have relied on
Bateman to dismiss takings claims for lack of subject matter jurisdiction under Rule
12(b)(1) when Williamson County was not satisfied. See River N. Props., 2014 WL
1247813 at *5 n.5 (collecting cases).
The Supreme Court’s statements in Lucas, Suitum, and Horne control. “When the
Supreme Court speaks, it (of course) supercedes our prior case law.” Hydro Res., Inc. v.
E.P.A., 608 F.3d 1131, 1163 (10th Cir. 2010) (en banc).11 Although decisions of prior
panels, absent en banc consideration, generally bind us, that is not so when a “subsequent
Supreme Court decision contradicts or invalidates our prior analysis.”12 United States v.
11 To the extent the statements in any of these cases are dicta, we are “bound by
Supreme Court dicta almost as firmly as by the Court’s outright holdings, particularly
when the dicta is recent and not enfeebled by later statements.” United States v.
Serawop, 505 F.3d 1112, 1122 (10th Cir. 2007) (quotations omitted).
12 Lucas was decided before Bateman, but Bateman did not squarely address or
consider the distinction between prudential and jurisdictional ripeness. Later Supreme
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Salazar, 987 F.3d 1248, 1254 (10th Cir. 2021) (quotations omitted). We follow the
Supreme Court decisions and hold that Williamson County’s ripeness test is prudential,
not jurisdictional.
b. Article III ripeness
Unlike the district court, we conclude that NMS’s allegations are sufficient to
satisfy Article III ripeness requirements.
“If a threatened injury is sufficiently ‘imminent’ to establish standing, the
constitutional requirements of the ripeness doctrine will necessarily be satisfied.” Awad
v. Ziriax, 670 F.3d 1111, 1124 (10th Cir. 2012) (quotations and alteration omitted).
“Article III standing requires the plaintiff to ‘have (1) suffered an injury in fact, (2) that is
fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be
redressed by a favorable judicial decision.’” Baker v. USD 229 Blue Valley, 979 F.3d
866, 871 (10th Cir. 2020) (quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)).
“To establish injury in fact, a plaintiff must show that he or she suffered an invasion of a
legally protected interest that is concrete and particularized and actual and imminent, not
conjectural or hypothetical.” Id. (quotations omitted).
Whether or not the City’s adoption of Ordinance 29 and denial of NMS’s rezoning
application caused a regulatory taking, NMS adequately alleged that it suffered economic
injury that is fairly traceable to those decisions. Ordinance 29 places NMS at a
Court cases—such as Suitum and Horne—clarified that the Supreme Court meant what it
said in Lucas: Williamson County is prudential, not jurisdictional.
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disadvantage compared to owners of other SCI-zoned properties that already have FMR
development. NMS alleged that Ordinance 29’s restrictions make it more difficult to find
suitable tenants, resulting in a higher than average vacancy rate. And NMS cannot build
FMR units—which it alleged is the only way to make MSP economically viable—unless
it pursues a costly and time-consuming PD application. The Supreme Court has routinely
recognized that a likelihood of economic injury resulting from governmental action that
changes market conditions is sufficient to satisfy Article III justiciability requirements.
E.g., Clinton v. City of New York, 524 U.S. 417, 432-33 (1998). NMS’s claims are
therefore constitutionally ripe.
Prudential Ripeness
The district court erred by dismissing NMS’s complaint for lack of jurisdiction
under Rule 12(b)(1), but we otherwise agree with the court’s ripeness analysis and affirm
on the alternative ground that NMS’s claims are prudentially unripe. See VR
Acquisitions, LLC v. Wasatch Cnty., 853 F.3d 1142, 1146 (10th Cir. 2017) (“[D]espite the
district court’s explicit reference to Article III standing, we conclude the district court
actually dismissed based on a finding that VRA lacks prudential standing.”); Brumfiel v.
U.S. Bank, 618 F. App’x 933, 936 (10th Cir. 2015) (unpublished) (affirming Rule
12(b)(1) dismissal without prejudice on alternative ground that plaintiff lacked prudential
standing) (cited for persuasive value under Fed. R. App. P. 32.1; 10th Cir. R. 32.1(A)).
NMS’s regulatory takings claim is not prudentially ripe. Although its rezoning
application was denied, “avenues still remain for the government to clarify or change its
decision.” Pakdel, 141 S. Ct. at 2231. Specifically, NMS has not obtained a “final
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decision” from the City because it has not yet submitted a development proposal for PD
review.
a. Rule 12(b)(6) and standard of review
Prudential ripeness is properly analyzed under Rule 12(b)(6) rather than Rule
12(b)(1) because it does not implicate subject matter jurisdiction. See VR Acquisitions,
853 F.3d at 1146 n.4 (collecting cases); Kerr v. Polis, 930 F.3d 1190, 1194 (10th Cir.
2019) (“Plaintiffs argue that in light of the Supreme Court’s decision in Lexmark Int’l,
Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), the district court erred in
examining these prudential concerns on a Rule 12(b)(1) motion to dismiss for lack of
subject matter jurisdiction. We agree.”), vacated & reh’g en banc granted 977 F.3d 1010
(2020); Sherman v. Town of Chester, 752 F.3d 554, 560-61 (2d Cir. 2014) (analyzing
Williamson County ripeness under Rule 12(b)(6)); Bowlby v. City of Aberdeen, 681 F.3d
215, 219 (5th Cir. 2012) (same).
Under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted
as true, to state a claim to relief that is plausible on its face.” Doe v. City of Albuquerque,
667 F.3d 1111, 1118 (10th Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009)). NMS bears the burden of showing that its claims are prudentially ripe for
judicial review. See Los Alamos Study Grp. v. U.S. Dep’t of Energy, 692 F.3d 1057,
1064 (10th Cir. 2012). We review the district court’s order of dismissal premised on lack
of prudential ripeness de novo. See Alto Eldorado P’ship, 634 F.3d at 1173.
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b. Futility and finality
NMS urges us to adopt a “futility exception” to Williamson County’s finality
requirement and thereby excuse its failure to pursue the PD process. We think, however,
that futility is better viewed as part of the finality analysis rather than an exception to the
finality requirement. Williamson County requires “nothing more than de facto finality.”
Pakdel, 141 S. Ct. at 2230. A plaintiff may demonstrate de facto finality by showing
(1) “the agency lacks the discretion to permit any development,” or (2) “the permissible
uses of the property are known to a reasonable degree of certainty.” Palazzolo, 533 U.S.
at 620. The finality requirement does not require landowners to exhaust administrative
procedures, or to “submit applications for their own sake.” Id. at 621. Instead, a “final
decision” has been reached and a regulatory takings claim becomes prudentially ripe for
judicial resolution “[o]nce the government is committed to a position.” Pakdel, 141
S. Ct. at 2230. So a showing that pursuit of further administrative relief would be futile
would satisfy the finality requirement.13
c. Application
This case should be dismissed on prudential ripeness grounds because NMS has
failed to adequately plead that “the agency lacks the discretion to permit any
13 In practice, the futility analysis is largely the same whether it is cast as an
“exception” to finality, as our sister circuits have held, or as part of the determination of
finality itself. As the Sixth Circuit has explained, “[t]he ‘futility exception’ to the
threshold requirement of finality developed by the Ninth Circuit is but another way of
articulating [the final decision analysis]. . . . In these cases, ‘futility’ is tantamount to the
requirement of finality.” Bannum, Inc. v. City of Louisville, 958 F.2d 1354, 1363 (6th
Cir. 1992) (citations omitted). We agree.
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development, or the permissible uses of the property are known to a reasonable degree of
certainty.” Palazzolo, 533 U.S. at 620.
Drawing on Palazzolo, NMS argues that (i) pursuing PD would be futile because
the City lacks discretion, as a matter of municipal law, to allow any FMR development at
MSP; and (ii) the City’s actions and statements make it reasonably certain that no FMR
development will be allowed at MSP—that is, that the City has “dug in its heels.” See
Murphy v. New Milford Zoning Comm’n, 402 F.3d 342, 349 (2d Cir. 2005). Neither
argument is persuasive. 14
i. Discretion
In NMS’s view, the City lacks discretion to approve FMR development through
the PD process because (1) Ordinance 29 prohibits FMR development and (2) the City is
bound by the findings it made in denying the rezoning application. We disagree.
1) Ordinance 29
The LUC, as amended by Ordinance 29, states, “No new Free-Market Residential
units may be established” within the SCI zone. App., Vol. 1 at 110. NMS argues this
language forecloses the City from approving any FMR development, including through
the PD process. But nothing in Ordinance 29 eliminated or changed the PD process or
standards for PD review, which are codified in a different section of the LUC. See LUC
ch. 26.445.
14 NMS’s “finality” and “futility” arguments are largely duplicative, further
demonstrating that the question of futility merges into the finality analysis. Compare,
Aplt. Br. at 16-23, with id. at 29-34.
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Before Ordinance 29, FMR development was allowed for MSP as a “conditional
use” subject to City review and approval under Chapter 26.425 of the LUC. Ordinance
29 removed this avenue for potential FMR development at MSP. But it did not close the
door altogether. The extent of FMR development that will ultimately be allowed on the
property is an open question, notwithstanding Ordinance 29, because the City retains
discretion to approve a use variation from the SCI zoning regulations through the PD
process. 15
2) Rezoning findings
The CDD Report and the P&Z Resolution included findings that FMR
development at MSP is not compatible with the City’s “community character” or
surrounding land uses, and that such development would be inconsistent with the AACP
and CCMP.16 NMS contends these findings closely mirror two of the criteria for granting
a variance in the PD process:
15 In its reply brief and at oral argument, NMS argued that it “cannot seek a
variance from the permitted uses within the SCI district under the LUC’s variance
provisions.” Aplt. Reply Br. at 4; Oral Arg. at 3:05-4:30. It relies on LUC
§ 26.314.030(B), which states that “variances” from permitted uses may be granted only
for the temporary off-site location or storage of materials, structures, or construction
equipment. But that has no bearing on the availability of a “use variation” through the
PD process, which the LUC provides for in a separate section. See LUC § 26.445.060.
16 When evaluating the sufficiency of a complaint under Rule 12(b)(6), we may
consider “documents referred to in the complaint if the documents are central to the
plaintiff’s claim and the parties do not dispute the documents’ authenticity.” Wasatch
Equal. v. Alta Ski Lifts Co., 820 F.3d 381, 386 (10th Cir. 2016) (quotations omitted); see
also Brokers’ Choice of Am. v. NBC Universal, Inc., 861 F.3d 1081, 1103 & n.22 (10th
Cir. 2017).
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 “The proposed use variation is compatible with the
character of existing and planned land uses in the project
and surrounding area,” and
 “The proposed use variation complies with applicable
adopted regulatory plans.”
LUC § 26.445.060(a), (d). NMS therefore asserts the rezoning findings are fatal to any
future PD application that includes FMR development at MSP. We disagree for two
reasons.
First, nothing in the LUC prohibits the City from revisiting the findings and
recommendations made by the CDD staff. NMS has not explained why staff findings
made during the rezoning process would bind the City in the PD process. The purpose of
PD review is to “encourage flexibility and innovation in the development of land”
through holistic consideration of concrete development proposals. LUC § 26.445.010.
Findings made in the context of a proposal to rezone MSP as Mixed Use—which would
have allowed virtually unfettered FMR development as well as other commercial uses—
were not addressed to a more narrow or concrete PD proposal. The CDD Report and the
P&Z Resolution found that rezoning the property as Mixed Use would be incompatible
with community character and applicable regulatory documents. They did not find that
allowing any FMR housing would be incompatible.17
17 NMS relies on a single statement in the CDD Report concerning the
incompatibility of FMR development with the CCMP. The full-quoted sentence states:
“Though the application does not include a development plan and is solely a request to
rezone the subject properties, it should be noted that free market residential development
is inconsistent with the direction of the Civic Center Master Plan.” App., Vol. 2 at 31.
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Second, even if the City were bound to defer to the earlier findings when
reviewing a PD proposal, it would still have discretion to grant a use variation. The
criteria for granting a use variation through PD review are non-mandatory guidelines.
The City does not need to find every factor is satisfied before granting a variation.
Section 26.445.060 provides that the City “shall consider” the applicable standards for
deviating from permitted and conditional uses. The LUC does not make any one
criterion or combination of criteria dispositive.
NMS argues the City must find that any PD application meets all four criteria we
set forth above, and that failure to meet any is fatal to the application. It relies in part on
Section 26.445.040, which details a three-step procedure for PD review before the P&Z
Commission and the City Council. That section provides: “If use variations are
proposed, the proposed development shall also comply with Section 26.445.060, Use
Variation Standards.” LUC § 26.445.040(b)(1)(c). NMS reads the term “shall also
comply” to mean that compliance with all four criteria is mandatory. But this reasoning
is circular. Section 26.445.060 requires the City only to consider the four criteria. To
say that the City “shall also comply” with that section is simply to say that the City “shall
consider” the criteria.
* * * *
NMS offers no reason why this staff report statement would require the City Council to
reject all future development proposals that involve any amount of FMR development.
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In sum, the City retains discretion to approve FMR development on the MSP
property through the PD process.
ii. Reasonable Degree of Certainty
Even when a municipality retains some discretion to grant a rezoning request, the
finality requirement may be satisfied if “the permissible uses of the property are known to
a reasonable degree of certainty.” Palazzolo, 533 U.S. at 620. For example, pursuing
further administrative procedures may not be necessary when the agency “has dug in its
heels and made clear that all such applications will be denied.” Murphy, 402 F.3d at 349.
NMS argues that the City’s actions thus far—adopting Ordinance 29 and rejecting
NMS’s rezoning application—show it is reasonably certain the City will not approve any
PD application that includes FMR development. We are unpersuaded.
As we observed in Landmark, “it is clear that the best support for a claim of
futility is completion of the steps mandated by Williamson County and Yolo County:
unsuccessful pursuit of either a variance or a proposal for less intense development.”
874 F.2d at 722.18 Put differently, the best way for NMS to demonstrate the City is likely
18 Relying in part on this language, NMS argues that “the futility exception is
available” when “a sufficient number of prior applications have been rejected by the
applicable authority, which . . . is at least one.” Aplt. Br. at 28. It points us to several
other circuits that it claims have adopted this “rejected application test.” But the cases it
cites simply stand for the proposition that “the filing of one meaningful application will
ordinarily be a necessary, although not alone sufficient, precondition for invoking the
futility exception.” Gilbert v. City of Cambridge, 932 F.2d 51, 61 (1st Cir. 1991).
As we explained above, “futility” is an aspect of the finality requirement. The
“unsuccessful pursuit of either a variance or a proposal for less intense development” is
evidence of finality. Landmark, 874 F.2d at 722.
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to reject any future PD proposals is to show the City has already rejected at least one such
application. But NMS has not submitted one. It relies instead on Ordinance 29 and the
request to rezone to Mixed Use.
1) Ordinance 29
The City’s adoption of Ordinance 29 does not make it reasonably certain that
NMS’s PD proposal will be denied. Ordinance 29 changed the zoning laws to prohibit
FMR development as a conditional use on all SCI-zoned properties, not just MSP.19
Ordinance 29 reflects a general policy judgment that FMR should no longer be allowed
within the SCI zone as a conditional use. It did not definitively determine the type or
intensity of development that may be allowed at MSP specifically.
2) Rezoning application
The only application that NMS submitted was a request to rezone MSP as Mixed
Use. The proposed rezoning would have had a far wider-reaching effect than just
allowing limited FMR development following PD review. NMS alleged in its amended
complaint that Mixed Use uses would have included “office, formula retail, services, both
general and specialty retail uses; as well as free market residential and affordable
housing, which could be combined on one parcel or within one building.” App., Vol. 1
at 55-56. Rezoning the property as Mixed Use would have allowed “single family
19 NMS alleges that, of the four SCI-zoned properties in Aspen, the one where
MSP is located is the only one that does not already have FMR units. So, NMS argues,
Ordinance 29 was necessarily targeted at prohibiting FMR development at MSP
specifically. But Ordinance 29’s scope extends beyond MSP. It also bars additional
FMR development at any of the other three SCI-zoned properties.
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residences, duplexes, and standalone multi-family units.” App., Vol. 2 at 31. It also
would have allowed “lodging, specialty retail uses, and restaurant/bar,” none of which are
allowed in the SCI zone. Id. at 29.
The City’s rejection of such a sweeping request sheds little light on the amount
and type of FMR development it might ultimately approve when faced with a more
narrow, concrete PD proposal. That is why a final decision generally requires “an initial
rejection of a particular development proposal,” and a “definitive action by local
authorities indicating with some specificity what level of development will be permitted
on the property in question.” SK Fin., 126 F.3d at 1276 (quoting Landmark, 874 F.2d
at 720.); see Yolo Cnty., 477 U.S. at 353 n.9 (“Rejection of exceedingly grandiose
development plans does not logically imply that less ambitious plans will receive
similarly unfavorable reviews.”).
The standards for PD applications are more flexible than the standards for
rezoning. Compare LUC § 26.445.10, with id. § 26.310.090. NMS is correct that there is
some overlap between the PD and rezoning criteria. But the overlapping criteria may be
weighed differently in the PD context. In short, NMS’s rezoning application is not an
adequate substitute for seeking an individualized final decision through the PD process.20
20 Indeed, the minutes of the City Council meeting at which the Council rejected
NMS’s rezoning request indicate that the City was open to considering a more concrete
proposal. One Council member stated: “I’m not sure the zoning can’t be changed
without a plan, but I think there should be a serious discussion about what types of uses
should go there. It is too early to get rezoned.” App., Vol. 3 at 25. Another member
agreed “change is inevitable. I’m sure what you come up with will gain traction.” Id.
And the then-mayor did not “disagree with reconsidering the status quo.” Id. The
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* * * *
Neither the passage of Ordinance 29 nor the denial of NMS’s rezoning application
shows that the City has come to a “final, definitive position regarding how it will apply
the regulations at issue to the particular land in question.” Williamson Cnty., 473 U.S.
at 191. NMS has not carried its burden to demonstrate that “there is no question about
how the regulations at issue apply to the particular land in question.” Pakdel, 141 S. Ct.
at 2230 (alterations omitted) (quoting Suitum, 520 U.S. at 739). It therefore has not met
the final decision requirement or shown that this case is prudentially ripe.
Non-Takings Claims
NMS argues that, even if its takings claim is unripe, its declaratory judgment and
“reverse spot zoning” claims should not have been dismissed because they rely in part on
facts and law that are independent of the takings analysis. 21 We disagree.
a. Declaratory judgment
NMS’s declaratory judgment claim rests on the same factual and legal bases as its
other constitutional claims. It asserts the same constitutional violations, but seeks a
different remedy. Specifically, Count One of the amended complaint seeks a declaration
that Ordinance 29 is invalid and unenforceable because it runs afoul of the Substantive
Council specifically expressed its openness to “discussions” with NMS and “community
engagement.” Id.
21 NMS does not dispute that its substantive due process and equal protection
claims fall with its takings claim. We have “repeatedly . . . held that the ripeness
requirement of Williamson applies to due process and equal protection claims that rest
upon the same facts as a concomitant takings claim.” Bateman, 89 F.3d at 709.
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Due Process, Equal Protection, and Takings Clauses. This mirrors the claims raised in
Count Two (Substantive Due Process), Count Three (Equal Protection), and Count Four
(Regulatory Taking). Count One is therefore prudentially unripe for the same reasons
discussed above.
b. Reverse spot zoning
NMS has not articulated a legal basis for its “reverse spot zoning” claim or
explained how it has an independent factual or legal basis. The district court understood
this claim to be based at least in part on Colorado law. To the extent it is, the court
properly declined to exercise supplemental jurisdiction under 28 U.S.C. § 1367. See
Brooks v. Gaenzle, 614 F.3d 1213, 1229-30 (10th Cir. 2010) (stating that district courts
should generally decline to exercise jurisdiction over state claims if all federal claims are
dismissed before trial), abrogated on other grounds by Torres v. Madrid, 141 S. Ct. 989
(2021). To the extent the claim is based on federal law, the district court correctly
concluded that NMS “fail[ed] to identify any basis for the Court to construe this claim
differently from its Takings Clause § 1983 claim.” App., Vol. 3 at 36.
* * * *
Because NMS’s regulatory takings claim is prudentially unripe, its remaining
claims resting on the same facts also lack prudential ripeness.
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III. CONCLUSION
We affirm the district court’s dismissal without prejudice of NMS’s amended
complaint.22
22 Although dismissal with prejudice is generally appropriate under Rule 12(b)(6)
when amending the complaint would be futile, see Brereton v. Bountiful City Corp., 434
F.3d 1213, 1219 (10th Cir. 2006), dismissal without prejudice is more appropriate when
the court relies on prudential ripeness grounds, see Wyoming v. Zinke, 871 F.3d 1133,
1146 (10th Cir. 2017) (remanding to the district court to dismiss the action without
prejudice on prudential ripeness grounds).
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