E-Alert Case Updates

Fourth Circuit Affirms Summary Judgment Against Beachfront Cottage Owners’ Procedural Due Process and Equal Protection Claims But Reverses Dismissal of their Takings Claim.

Roc Sansotta v. Town of Nags Head
Case No. 12-1538(4th Cir. July 25, 2013)
by Tony W. Torain, II Associate
Semmes, Bowen & Semmes (www.semmes.com)

Six beachfront cottage owners filed suit against the Town of Nags Head, North Carolina, alleging violations of their procedural due process and equal protection rights under the Fourteenth Amendment and claiming takings under the Fifth Amendment, which is incorporated by the Fourteenth Amendment. On November 12, 2009, a severe storm caused damage to several beachfront cottages. In an attempt to protect the cottages, Roc Sansotta, the manager of the properties, hired contractors to build supports around the cottages. The Nags Head officials ordered Sansotta and the contractors to cease work on the cottages during the storm. The storm removed a substantial amount of sand from the cottages, which led to property damages, including the exposure of septic tanks. As a result of the damage, the Town’s nuisance ordinance classified the six cottages as nuisances as a result of the storm damage due to the fact that they were located on public trust lands and the damage from the storm could reasonably cause personal injury or property damage.

On November 30, 2009, the Town Manager informed the cottage owners that the cottages were declared nuisances under the ordinance. He further indicated that the owners would face civil fines of $100 per day per cottage if the nuisances were not abated within eighteen (18) days. The only way for the owners to abate the nuisances was to demolish the cottages. In May 2010, the owners of the six cottages brought suit against the Town in state court. The Town removed the matter to federal court in the Eastern District of North Carolina. During the course of the suit, the U.S. Army Corps of Engineers granted the Town permission in 2011 to engage in a $36 million beach renourishment project. As the project resulted in 200 feet of “new beach” near the six (6) cottages, the Town withdrew one of the nuisance declarations and offered the owners a chance to apply for repair permits. The Town, however, did not withdraw the nuisance declaration based on the likelihood of personal injury or property damage.

Both parties filed dueling motions partial summary judgment. The district court granted the Town’s Motion for Summary Judgment on the procedural due process claim, as the Town did not deprive the cottage owners of any property rights. Furthermore, the owners had a remedy in an inverse condemnation proceeding. The district court also granted summary judgment in favor of the Town on the equal protection claim, concluding that the Town’s decision to find some cottages nuisances was rationally related to the legitimate goal of making the beach accessible to emergency vehicles. Finally, the district court dismissed the owner’s “takings” claim as unripe and remanded the state law claims back to state court. The cottage owners timely appealed to the United States Court of Appeals for the Fourth Circuit.

In its review of the procedural due process issue, the Court outlined the elements for a successful procedural due process claim. First, the owners had to demonstrate a “constitutionally cognizable life, liberty or property interest.” Next, the owners had to show that the right was deprived by state action. Finally, the owners had to show that the procedures leading to the deprivation were “constitutionally inadequate.” The Court concluded that the owners were not deprived of any property rights. The owners did not pay the fines, although fines were imposed, and the Town’s ordinance was a legitimate government limitation on the use and enjoyment of the cottage. Accordingly, the Court affirmed the district court’s grant of summary judgment with respect to the procedural due process claim.

The Court next analyzed the equal protection claim. Based on the nature of the alleged disparity, the Court utilized rational basis scrutiny to determine whether the owners’ equal protection rights were violated. The owners alleged that because fourteen (14) other cottages that were not declared a nuisance, the Town violated their equal protection rights. The Court found that the six cottages were “substantially closer” to the Atlantic Ocean than the other fourteen (14) cottages. Furthermore, the six (6) cottages obstructed the ability of emergency vehicles to access the beach due to the cottages’ proximity to the Ocean. Accordingly, the Court concluded that the Town had a rational basis for declaring the six (6) cottages to be nuisances and further concluded that the owners’ equal protection rights were not violated by the Town’s action.

Finally, the Court concluded that the district court erred in finding the owners’ takings claim unripe based on the state-litigation requirement. The Court indicated that the Town waived the state litigation requirement by removing the case to Federal court. In Federal court, a plaintiff must seek compensation before filing suit under the Takings Clause. In State court, however, there is no such requirement. As the owners sought compensation and brought suit simultaneously in state court, they complied with state law. By removing the case to federal court, the Town waived the Federal court requirement. The Court held that the Federal district court erred in dismissing the owners’ takings claim for lack of ripeness.