In PA takings case, US Supreme Court rejects legal basis for 5-year City defense of Footing Drain Disconnection Program; High Court overturns both pillars of City case and Sixth Circuit judgement against homeowners

5-4 majority opinion by Chief Justice Roberts gives FDD homeowners a big win

Lumbard class action appeal heads to US Supreme Court; Reasons for cautious optimism at the Supreme Court

I reported in my earlier post about the Knick v Township of Scott case, in which the only two precedents supporting the City’s FDD arguments and the favorable opinion it obtained in the Sixth Circuit of Appeals were in deep jeopardy in the United States Supreme Court.

I’m pleased to report that the decision in Knick was handed down on June 21, 2019 and FDD homeowners in Ann Arbor had a big win. The United States Supreme Court exceeded our expectations and threw out both cases that were used by the City and its lawyers in tandem to “preclude” the Class Action Plaintiffs from a single day in federal court. The Court’s decision is a game changer for litigation on behalf of FDD homeowners in Ann Arbor.

Chief Justice Roberts Writes for 5-4 Majority

Chief Justice Roberts wrote the opinion in Knick and summed up the problems faced by the class plaintiffs in the FDD litigation since 2014 in a few paragraphs:

The Takings Clause of the Fifth Amendment states that “private property [shall not] be taken for public use, without just compensation.” In Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), we held that a property owner whose property has been taken by a local government has not suffered a violation of his Fifth Amendment rights—and thus cannot bring a federal takings claim in federal court—until a state court has denied his claim for just compensation under state law. 

Williamson is the only reason the FDD plaintiffs were forced to litigate first in state court, on the City’s home court. 4 years of difficult, expensive and ultimately pointless state court proceedings, or even one day, would not have occurred but for the Williamson case. Without that case, the FDD claimants would have filed and stayed in an independent federal court, before a life-tenured US District Judge, from day 1. The FDD Class Plaintiffs obeyed Williamson to the letter in state court. We did exactly as Justice Roberts describes above.

The Chief Justice says this was supposed to be the end of the burden of state litigation on the municipality’s home court:

The Williamson County Court anticipated that if the property owner failed to secure just compensation under state law in state court, he would be able to bring a “ripe” federal takings claim in federal court.

Instead, as Justice Roberts explains, the plaintiff in Knick–exactly like the FDD Class Plaintiffs–were intentionally deprived of a day in federal Court. That was precise objective of the City and its lawyers in the FDD litigation.

But as we later held in San Remo Hotel, L. P. v. City and County of San Francisco, 545 U. S. 323 (2005), a state court’s resolution of a claim for just compensation under state law generally has preclusive effect in any subsequent federal suit. The takings plaintiff thus finds himself in a Catch-22: He cannot go to federal court without going to state court first; but if he goes to state court and loses, his claim will be barred in federal court. The federal claim dies aborning.

As stated, that was the whole point of the City’s litigation strategy in the FDD cases. In Knick, however, the City’s strategy (while still in progress) was finally under the microscope of the only court with the power to rid the law of the Williamson/San Remo “Catch-22.” Justice Roberts did not pick nits in response:

The San Remo preclusion trap should tip us off that the state-litigation requirement rests on a mistaken view of the Fifth Amendment. The Civil Rights Act of 1871, after all, guarantees “a federal forum for claims of unconstitutional treatment at the hands of state officials,” and the settled rule is that “exhaustion of state remedies ‘is not a prerequisite to an action under [42 U. S. C.] §1983.’” Heck v. Humphrey, 512 U. S. 477, 480 (1994) (quoting Patsy v. Board of Regents of Fla., 457 U. S. 496, 501 (1982)). But the guarantee of a federal forum rings hollow for takings plaintiffs, who are forced to litigate their claims in state court.

[Emphases added.] That is exactly what happened to the FDD Class Action Plaintiffs and the class of FDD homeowners in federal court in January.

Justice Roberts went even further than we had hoped. The Court overturned Williamson and the whole case argued by the Township:

We now conclude that the state-litigation requirement imposes an unjustifiable burden on takings plaintiffs, conflicts with the rest of our takings jurisprudence, and must be overruled. A property owner has an actionable  Fifth Amendment takings claim when the government takes his property without paying for it. … [T]he property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court under §1983 at that time.

The Court stated that Fifth Amendment takings claims that had been made a “stepchild” of the Bill of Rights were now “restored.” I and my co-counsel, Dan O’Brien, Esq., have represented the Class Plaintiffs in the Lumbard litigation as they went through the Williamson and San Remo processes and its indignities, now banished from the legal system entirely. We will continue to represent them vigorously and zealously. Their case is brought on their own behalf and on behalf of all owners of homes where the City completed mandatory footing drain disconnections under the Footing Drain Disconnection Program.

City and Mlive reports of the death of the FDDP Class Action were premature

In January, Mlive’s coverage of the Sixth Circuit’s decision featured the City’s supposed big win, commentary by the City Attorney, and an obituary for the FDD Class Action. Knick in a legal instant (“eo instante“) left the City’s case in ashes and “restored” the rights of of owners of FDD homes to file their federal claims before an independent federal court in the first place. We have no plans for any further proceedings in state court.

FDD Federal Class Action heads to US Supreme Court

We are in the midst of preparing a Petition for Supreme Court review in the Lumbard case–the one currently in court. This is an important step. The due date for filing is now July 29, 2019, two weeks away. The City will have 30 days to respond to the Petition, if the City wishes to respond at all.

Lumbard is among a very few federal “preclusion” cases that were decided under Williamson/San Remo while the plaintiffs were waiting for Knick to come down, including us. One of the other plaintiffs whose case is in that posture, from the Ninth Circuit, to petitioned the Court for review, arguing the case would come out in his favor if Knick were applied.

The Court quickly granted the Petition, reviewed the case, and summarily “vacated” (wiped out) the judgement of the Ninth Circuit. The case was returned to federal court for proceedings “not inconsistent” with Knick, which is now the Law of the Land. There is reason for some cautious optimism about the Court’s treatment of the FDD Class Action Plaintiffs’ Petition.

Irvin Mermelstein


October 1973 City Council Ordinance grandfathered all pre-existing footing drain connections in Ann Arbor prior to the new law; No homeowners were told about their grandfathered rights before, during or after FDDs were completed

City Council was apparently kept in the dark about 1973 grandfathering; FDD Homeowners Should Have Been Left Alone by the City and FDD Contractors

In 1972, Congress passed the landmark federal Clean Water Act. One of the main purposes of the Act was to eliminate municipal discharges of combined stormwater and wastewater sewage from municipal combined sewer systems such as Ann Arbor’s. The intent of the Clean Water Act was the elimination of the combined sewer overflows by eliminating combined sewer systems. The law created a regulatory process through which municipalities like Ann Arbor would move from aging “combined sewer systems” to new “separate sanitary sewer systems.”

In October 1973, the Ann Arbor City Council passed City Ordinance 8-73 as the City’s first legislation intended to further the new national policy of complete separation of municipal and storm water and wastewater flows into two separate systems.

The short, one-paragraph Ordinance has three parts.

1. Prohibition on Discharging Storm Water into Sanitary Sewers

Ordinance 8-73 prohibited introduction of stormwater, groundwater , cooling water, and similar liquids into the City’s “sanitary sewers.” That portion of the Ordinance provides:

2:43. Prohibited Uses of Sanitary Sewer. No person shall discharge, or permit to be discharged, into any sanitary sewer, storm water, surface water, sub-surface groundwater, condensate, cooling water, or similar liquid waste, except as provided for in chapter 98 of this code.

As discussed below, the City Council was well aware of the need to make clear that this provision was prospective only and did not apply to homes built with footing drains that were already connected to the existing combined sewers before the Ordinance went into effect.

2. New Requirements for Separated Sewer Systems for Post-1973 Subdivisions

Significantly, Ordinance 8-73 required developers of subdivisions approved by the City after the new Ordinance went into effect to include entirely separate storm and sanitary sewers to handle all the stormwater in the subdivision, including all groundwater. The Ordinance said as follows:

Any development that is subject to plat or site plan approval and concerning which final approval has not been granted prior to the effective date of this ordinance [i.e., November 1973] shall be designed with an adequate enclosed storm sewer system that receives all discharges from the above-mentioned sources by gravity.

This language was in line with the Clean Water Act’s goals. It was a progressive law aimed at new construction only.

“Grandfather” clause: New stormwater discharge rule does not apply to footing drain connections to sanitary sewers that were “existing” in November 1973

According to the US Census, in 1970 there were already almost 27,000 existing housing structures in Ann Arbor, of which all were required to be built with footing drains, under City law, to prevent basement flooding. Of these, the footing drains in perhaps 20,000 houses were already connected to combined sewers. The City Council went out of its way to make crystal clear that footing drain connections to sanitary sewers were “grandfathered” against and not covered by the new discharge prohibition provisions of the Ordinance.

The Ordinance seems quite plain:

THE ABOVE PROVISIONS SHALL NOT APPLY TO EXISTING STRUCTURES THAT HAVE FOOTING DRAINS PRESENTLY CONNECTED TO SANITARY SEWERS.

The capital letter are from the original Ordinance, in which the City Council created specific enforceable rights for owners of homes as part of the bundle of rights that constitute “home ownership.” I don’t know of any case where the City advised the owners of homes targeted for FDDs that a City Council Ordinance specifically shielded their FD connections from the City.

When the representatives of the City and its contractors came to my house on Ascot Road to inform my family that a disconnection would be “required,” they did not mention the 1973 Ordinance.

Lawyers for the City failed to disclose the grandfathering clause to the City Council

Ordinance 8-73 should have been the end of the idea of a footing drain disconnection program in 2001, at least a program involving the older houses that were targeted by the FDDP. This failure to advise homeowners was not a tragic oversight or mistake. Quite the contrary. Early in July 2001, the City staff and contractors working on the FDDP had organized a full day City Council Working Session, which is on video, about decisions required from the Council about the FDD Program and FDD Ordinance. Abigail E. Elias was then City Attorney. One of her Assistant City Attorneys attended the Working Session to brief the Council on its legal authority for footing drain disconnections. On Council video, he cited the 1973 ordinance’s prohibition on drainage of stormwater to City sanitary sewers, but not the grandfather clause. Consequently, the City Attorney’s Office cited Ordinance 8-73 as the authority for FDDs. The City’s attorney noted that the prohibition had not been enforced since its enactment 28 years earlier, but emphasized that it would from then on under the new FDD Ordinance (which passed in August 2001) through the FDD Program.

Council Members were openly concerned about FDDs as “work on private property.” Newly-elected Mayor John Hieftje was at the meeting and asked this question:

What are we going to do about the property owner who is very reluctant to take part in this program, who doesn’t want anything to do with it, who thinks we are the sewer Nazis [and] doesn’t want people working in their house?

No mention was made of the rights of homeowners to, in fact, refuse any work by the City on their connected footing drains lawfully grandfathered by the City Council in 1973. These rights were also not mentioned to Target Area homeowners during the process of selling FDDs to them at the public meetings leading up to passage of the FDD Ordinance in August 2001.

This was not the end of the Ordinance 8-73 story. It was not seen or heard from after FDD Ordinance passed in 2001. In federal court, however, the City Attorney’s Office was confronted with allegations in the pending FDD Federal Class Action Complaint that the City and its agents simply neglected to inform targeted homeowners of these invaluable legal protections that were instead taken away with mandatory FDDs.

I will pick up in a subsequent post about Ordinance 8-73 with the City’s responses to the allegations of the Class Plaintiffs in United States District Court and then in the Sixth Circuit US Court of Appeals.

Irvin Mermelstein


Progress Report: In FDD Federal Class Action, US Supreme Court Justice Sonia Sotomayor extends time for Plaintiffs to seek High Court Review of Sixth Circuit Ruling

This is important information for owners of homes in the City of Ann Arbor where a “footing drain disconnection” (FDD) was performed under the City of Ann Arbor FDD Program.

On October 20, 2017, four Ann Arbor homeowners filed a class action complaint in federal court claiming that the permanent FDD construction and installations in their home under the FDD Program (i) destroyed original construction, (ii) occupies space and (iii) is otherwise a burdensome violation of their rights under the Fifth Amendment’s edict that “private property [shall not] be taken for public use, without just compensation.” The case was brought on behalf of all FDD homeowners in the City limits.

On January 10, 2019, the Sixth Circuit US Court of Appeals in Cincinnati regrettably dismissed these meritorious claims that FDDs were and continue to be unlawful installations of functional parts of the City sewer system in their homes for them to operate, maintain and replace at their expense.

Both the City and the local press reported this result in the Sixth Circuit as if it ended the FDDP Federal Class Action. Nothing could be further from the truth.

United States Supreme Court

Case in point, on May 16, 2019, the FDD Class Action Plaintiffs began the process for appealing to the United States Supreme Court. They made a motion requesting additional time for filing their Petition for the Court’s review. The Supreme Court assigned Application No. 18A1198 to the case, Lumbard et al v City of Ann Arbor.

As the letter from the Supreme Court (linked here) states, on May 21, 2019, Justice Sonia Sotomayor granted the Plaintiffs’ Motion and set July 29, 2019, as the deadline for filing their petition for review. Justice Sotomayor has supervisory jurisdiction relating to the Sixth Circuit.

Vulnerability of City’s case on appeal to the Supreme Court

The City’s case in the Sixth Circuit and the resulting decision by the court rested entirely on a Supreme Court precedent–the highly controversial 2005 decision in San Remo Hotel vs City of San Fransisco. San Remo was the Sixth Circuit’s authority that the FDD Class Plaintiffs were barred–“precluded”–from an independent federal forum for adjudication of federal claims under the federal Fifth Amendment.

San Remo, however, may soon be gone. In 2017, the United States Supreme Court accepted a case, Knick v Township of Scott, that provides the Court the opportunity to overturn San Remo, which would bring the Sixth Circuit decision into immediate question. This follows years of attacks on San Remo by the federal judiciary and legal scholars as unjust, harsh and wrongly decided.

We expect to be learning whether San Remo lives or dies within the next 30 days: the Supreme Court will hand down its decision by then.

At the two Oral Arguments in Knick, a supermajority of Justices expressed strong hostility toward San Remo and its consequences

The threat to San Remo is evident from the statements of the Justices. There were two sessions of Oral Argument at the Supreme Court in Knick, on October 7, 2018 and January 16, 2019. This is highly unusual. The Town of Scott argued the side of municipalities like Ann Arbor, that San Remo should remain good law. The statements of the Justices were more sharply critical of San Remo at the second Oral Argument than the first.

By the end of the two Oral Arguments in Knick, a clear supermajority of the Justices (including Justices Kagan, Sotomayor, Breyer, Chief Justice Roberts, and Justices Gorsuch and Alito) had made their opposition to San Remo completely clear to eliminate the same kind of preclusion from federal court of federal “takings” claims that just occurred in the FDD Federal Class Action. At the Second Oral argument Chief Justice Roberts and Justice Alito mocked the fondness of municipal lawyers for San Remo as a tool to inflict additional cost and time on federal plaintiffs with federal property claims under the Fifth Amendment.

Former Justice Anthony Kennedy wrote an influential opinion in another case calling for the Court to overturn San Remo at the next opportunity.

A further reason the Supreme Court Justices were in such agreement was that the US Solicitor General entered the case to argue persuasively in court that San Remo has to go as unjust and wrongly decided. Arguments of the Solicitor General are given great weight.

The timing of the Motion for additional time to file the Plaintiffs’ petition for review was strategic and allows us time to file a petition for review after the Court’s action in Knick when its impacts will be known and can be evaluated.

We will keep the community posted and communicate about other important subjects in the meantime.

The dates to watch, then, are:

  • By July 3, 2019: Decision of Supreme Court in Knick v Township of Scott.
  • July 29, 2019: Deadline for filing FDD Plaintiffs’ Petition for Writ of Certiorari
  • By August 27, 2019: City would have the option to file an opposition to the Petition or waive the filing, very possibly with San Remo having been overturned.

Irvin Mermelstein