Opinion
6:19-CV-06753 EAW
2020-12-16
John R. STENSRUD and Maria B. Stensrud, Plaintiffs, v. ROCHESTER GENESEE REGIONAL TRANSPORTATION AUTHORITY, Defendant.
John T. Refermat, Lacy Katzen LLP, Rochester, NY, for Plaintiffs. Kathleen M. Bennett, Stephanie M. Campbell, Suzanne O. Galbato, Bond, Schoeneck & King PLLC, Syracuse, NY, for Defendant.
John T. Refermat, Lacy Katzen LLP, Rochester, NY, for Plaintiffs.
Kathleen M. Bennett, Stephanie M. Campbell, Suzanne O. Galbato, Bond, Schoeneck & King PLLC, Syracuse, NY, for Defendant.
DECISION AND ORDER
ELIZABETH A. WOLFORD, United States District Judge
INTRODUCTION
Plaintiffs John R. Stensrud and Maria B. Stensrud (collectively "Plaintiffs") filed a complaint pursuant to 42 U.S.C. § 1983 related to an alleged taking of property by defendant Rochester Genesee Regional Transportation Authority ("RGRTA" or "Defendant"). (Dkt. 1). RGRTA filed a motion to dismiss on statute of limitations grounds, and alternatively arguing that the Court should abstain from hearing Plaintiffs’ claims pursuant to Younger v. Harris , 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). (Dkt. 13). For the reasons set forth below, RGRTA's motion is denied.
BACKGROUND
The following facts are taken from the complaint. (Dkt. 1). As is required at this stage of the proceedings, the Court treats Plaintiffs’ well-pleaded factual allegations as true. Additionally, Defendant has requested that the Court take judicial notice of the filings from ongoing state court proceedings between Plaintiffs and Defendant, and Plaintiffs join in that request. Pursuant to Federal Rule of Evidence 201, the Court takes judicial notice of the state court proceedings only to the extent of establishing the fact of the litigation and the related filings, including the procedural posture of the litigation and the various state court rulings. See Ndremizara v. Swiss Re Am. Holding Corp. , 93 F. Supp. 3d 301, 313 n.7 (S.D.N.Y. 2015) ("The Court may take judicial notice of pleadings filed in other cases in deciding a motion to dismiss without converting that motion into a motion for summary judgment."); see also Glob. Network Commc'ns, Inc. v. City of New York , 458 F.3d 150, 157 (2d Cir. 2006) ("A court may take judicial notice of a document filed in another court not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings." (citation omitted)).
In 2011, Plaintiffs applied for a commercial loan of $300,000 to purchase a four-family commercial apartment complex at 36-38 Chamberlain Street, Rochester, New York. (Dkt. 1 at ¶ 14). In mid-2012, Canandaigua National Bank commissioned a conventional financing appraisal, which valued the property at $400,000. (Id. at ¶ 16). Plaintiffs made many different improvements to the building and increased the rents from approximately $550 per unit per month to rents ranging from $1,150 to $3,295. (Id. at ¶¶ 17-20).
In 2013, RGRTA began taking initial steps to acquire the property through eminent domain. (Id. at ¶ 24). It commissioned an appraisal issued in 2014 (the "2014 RGRTA Appraisal"), which did not include an income capitalization calculation, and valued the property at $255,000. (Id. at ¶¶ 25, 34). Later in 2014, RGRTA advised Plaintiffs that it would no longer acquire the property, and Plaintiffs continued to make improvements and otherwise invest in the property. (Id. at ¶ 28). In 2015, RGRTA reversed course and decided to condemn the property, sending notices to the tenants, who vacated. (Id. at ¶ 31).
On June 23, 2015, RGRTA filed a verified petition in New York State Supreme Court, Monroe County, seeking an order pursuant to New York Eminent Domain Procedure Law § 402 authorizing the filing of an acquisition map and vesting title to the property in RGRTA. (Dkt. 13-2). Title to the property formally transferred to RGRTA on August 13, 2015, with the entry of a vesting order. (Id. at ¶ 34). RGRTA paid $292,000 to Plaintiffs on or about November 16, 2015. (Id. ).
On December 30, 2015, Plaintiffs filed a claim in New York State Supreme Court, Monroe County, seeking direct and consequential damages as compensation for the alleged value of the property. (Dkt. 13-5). Plaintiffs retained an expert to calculate the income capitalization of the property, as well as a real estate appraiser who included an income-based analysis in his appraisal, referred to as the investment value. (Dkt. 1 at ¶¶ 35-38). RGRTA filed a motion in limine to strike the investment value portion of the appraisal report and preclude the testimony of the income capitalization expert, arguing that Plaintiffs should be limited to fair market value measures of valuation. (Id. at ¶ 39). Plaintiffs cross-moved to strike the 2014 RGRTA Appraisal for failure to include an income approach. (Id. at ¶ 40). On December 12, 2016, the state trial court granted RGRTA's motion and denied Plaintiffs’ cross-motion. (Dkt. 13-6 at 3).
After an unsuccessful motion to reargue and renew before the trial court (Dkt. 13-11), Plaintiffs pursued an appeal before the New York State Supreme Court, Appellate Division, Fourth Department, which ultimately issued a decision on June 7, 2019, modifying in part and affirming in part the trial court's order. (Dkt. 13-16). The Fourth Department modified the order to allow the presentation of evidence addressing the investment value methodology, but affirmed the preclusion of the expert witness testimony regarding income capitalization as well as the denial of Plaintiffs’ cross-motion. (Id. ). The decision cited N.Y. Comp. Codes R. & Regs. tit. 22, § 202.61(e) (hereinafter " 22 NYCRR § 202.61(e)") as the basis for precluding expert testimony regarding the income capitalization method that was not discussed in the appraisal. (Id. at 2). Plaintiffs sought leave from the Fourth Department to reargue or appeal to the New York State Court of Appeals, which was denied on September 27, 2019. (Dkt. 13-17). Plaintiffs then sought permission from the Court of Appeals to appeal the Fourth Department's decision, which was denied on the basis of non-finality. (Dkt. 22).
Plaintiffs filed the instant lawsuit on October 9, 2019. (Dkt. 1). Plaintiffs assert two causes of action: (1) a § 1983 claim that RGRTA took Plaintiffs’ property without just compensation in violation of the Fifth and Fourteenth Amendments to the United States Constitution, and the New York Constitution; and (2) a claim for "Indirect/Consequential Damages" based on the unconstitutional taking. (Id. at ¶¶ 51-57). Among other things, Plaintiffs argue that the interpretation of 22 NYCRR § 202.61(e) by New York state courts—wherein the testimony of Plaintiffs’ non-appraiser expert is limited to the content of the appraisal prepared by Plaintiffs’ appraiser—is unconstitutional as applied to them. (Id. at ¶¶ 5-6, 43-48).
RGRTA filed its motion to dismiss on December 9, 2019. (Dkt. 13). Plaintiffs filed papers in opposition on January 27, 2020 (Dkt. 17), and RGRTA replied on February 17, 2020 (Dkt. 19). On March 19, 2020, this case was transferred from the assigned district judge to the undersigned. (Dkt. 21). Plaintiffs filed a letter on April 16, 2020, informing the Court of the order from the Court of Appeals denying their motion for leave to appeal. (Dkt. 22). On June 24, 2020, the Court ordered supplemental briefing from the parties concerning the applicability of Younger abstention to a claim seeking only monetary relief (Dkt. 23), to which the parties responded on July 2, 2020 (Dkt. 24), July 6, 2020 (Dkt. 26), and July 13, 2020 (Dkt. 30; Dkt. 31).
DISCUSSION
I. Statute of Limitations
Defendant seeks dismissal, arguing that the statute of limitations has run on Plaintiffs’ claims. "Although the statute of limitations is ordinarily an affirmative defense that must be raised in the answer, a statute of limitations defense may be decided on a Rule 12(b)(6) motion if the defense appears on the face of the complaint." Ellul v. Congregation of Christian Bros. , 774 F.3d 791, 798 n.12 (2d Cir. 2014) ; see In re S. Afr. Apartheid Litig. , 617 F. Supp. 2d 228, 287 (S.D.N.Y. 2009) (an exception to the rule that an affirmative defense cannot normally be decided on a motion to dismiss "is made where the complaint facially shows noncompliance with the limitations period and the affirmative defense clearly appears on the face of the pleading." (citation omitted)). As discussed below, the Court agrees that Plaintiffs commenced this litigation outside the limitations period; however, equitable estoppel prevents dismissal.
A. Accrual of § 1983 Claim
The length of the statute of limitations for a § 1983 action is governed by state law, Wallace v. Kato , 549 U.S. 384, 387, 127 S.Ct. 1091, 166 L.Ed.2d 973 (2007), and in New York, it is three years. Eagleston v. Guido , 41 F.3d 865, 871 (2d Cir. 1994). On the other hand, when a § 1983 claim accrues is a question of federal law. Wallace , 549 U.S. at 388, 127 S.Ct. 1091. "[A]ccrual occurs when the plaintiff knows or has reason to know of the injury which is the basis of his action." Pearl v. City of Long Beach , 296 F.3d 76, 80 (2d Cir. 2002) (citations and quotations omitted); see also Levy v. BASF Metals Ltd. , 917 F.3d 106, 108 (2d Cir. 2019) (explaining that, in determining when a claim accrues, the "relevant inquiry" is not whether a party has "discovered the identity of the defendants," but rather whether the party is aware of the injury), cert. denied , ––– U.S. ––––, 140 S. Ct. 536, 205 L.Ed.2d 337 (2019).
In the instant matter, Plaintiffs allege that RGRTA took their property without paying just compensation in violation of their Fifth and Fourteenth Amendment rights. (Dkt. 1 at ¶¶ 52-54). The Fifth Amendment's Takings Clause provides that no private property "shall ... be taken for public use, without just compensation." U.S. Const. Amend. V. "The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation." Williamson Cnty. Reg'l Planning Comm'n v. Hamilton Bank of Johnson City , 473 U.S. 172, 194, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). The protection "is designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Penn Cent. Transp. Co. v. City of New York , 438 U.S. 104, 123, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) (alteration omitted) (quoting Armstrong v. United States , 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960) ). "[A] property owner may bring a Fifth Amendment claim under § 1983" when a government "takes property without compensation." Knick v. Township of Scott, Pa. , ––– U.S. ––––, 139 S. Ct. 2162, 2177, 204 L.Ed.2d 558 (2019) ; see Ganci v. N.Y.C. Transit Auth. , 420 F. Supp. 2d 190, 195 (S.D.N.Y. 2005) ("[T]o succeed in establishing a constitutional violation claimants must demonstrate: (1) that they have a property interest protected by the Fifth Amendment, (2) that they were deprived of that interest by the government for public use, and (3) that they were not afforded just compensation."), aff'd , 163 F. App'x 7 (2d Cir. 2005). Stated differently, the running of the statute of limitations for a takings claim begins when a plaintiff knows or has reason to know that the government took his or her property without just compensation. Here, Plaintiffs allege that this occurred in 2015—and more specifically, that title to the property transferred to RGRTA on August 13, 2015, and RGRTA paid Plaintiffs on November 16, 2015. (Dkt. 1 at ¶ 34). This was more than three years before Plaintiffs commenced the instant litigation. However, up until June 2019, Plaintiffs could not have commenced the instant litigation because of the pending state court proceedings, which Supreme Court precedent required to be exhausted prior to commencing a § 1983 claim in federal court based on an unjust taking. On June 21, 2019, the Supreme Court issued its decision in Knick v. Township of Scott, Pa. , ––– U.S. ––––, 139 S. Ct. 2162, 204 L.Ed.2d 558 (2019), overruling its decision in Williamson , and changing when a takings claim pursuant to § 1983 is considered "ripe." The Second Circuit has explained Knick ’s holding as follows:
Before the Supreme Court's recent decision in Knick ..., the law in the Second Circuit provided that a takings claim was not ripe unless the property owner could show "that (1) the state regulatory entity has rendered a ‘final decision’ on the matter, and (2) the plaintiff has sought just compensation by means of an available state procedure." Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals , 282 F.3d 83, 88 (2d Cir. 2002) (citing Williamson Cnty. v. Regional Planning Comm'n v. Hamilton Bank , 473 U.S. 172, 194-95, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985) ). Knick eliminated the state-exhaustion requirement as "an unjustifiable burden on takings plaintiffs ...." 139 S. Ct. at 2167.
But Knick leaves undisturbed the first prong, that a state regulatory agency must render a final decision on a matter before a taking claim can proceed. See id. at 2169 ("Knick does not question the validity of this finality requirement, which is not at issue here.").
Sagaponack Realty, LLC v. Vill. of Sagaponack , 778 F. App'x 63, 64 (2d Cir. 2019) (second alteration in original). In other words, before Knick , a takings claim was not ripe until all state court remedies had been exhausted, but now a claim becomes ripe once the state entity issues a final decision.
Admittedly, ripeness and accrual for statute of limitations purposes are two separate doctrines. Ripeness is a jurisdictional inquiry that examines whether a cause of action presents "a real, substantial controversy, not a mere hypothetical question," Kurtz v. Verizon N.Y., Inc. , 758 F.3d 506, 511 (2d Cir. 2014) (citation omitted), whereas the statute of limitations is an affirmative defense that "embodies a strict policy against delay that might prejudice the defendant," United States v. Watson , 690 F.2d 15, 16 (2d Cir. 1979). However, all of the circuits to address the issue, and the majority of district courts within the Second Circuit to do so, have found that in the context of takings claims, the statute of limitations begins to run only after the claim becomes ripe, "reasoning that because the constitutional injury is not complete until the claim becomes ripe, the statute of limitations cannot accrue before that point in time." Asociacion de Suscripcion Conjunta del Seguro de Responsabilidad Obligatorio v. Juarbe-Jimenez , 659 F.3d 42, 51 (1st Cir. 2011) ; see Hensley v. City of Columbus , 557 F.3d 693, 696-97 (6th Cir. 2009) (holding that the statute of limitations accrues when the takings claim becomes ripe); Levald, Inc. v. City of Palm Desert , 998 F.2d 680, 687 (9th Cir. 1993) (same); New Port Largo, Inc. v. Monroe Cnty. , 985 F.2d 1488, 1494-97 (11th Cir. 1993) (same); Biddison v. City of Chicago , 921 F.2d 724, 728-29 (7th Cir. 1991) (same); Corn v. City of Lauderdale Lakes , 904 F.2d 585, 588 (11th Cir. 1990) (same); Stephen v. Murray , No. 14-CV-4951 (MKB), 2016 WL 4402020, at *2 (E.D.N.Y. Aug. 17, 2016) ("Although the Court finds no perfectly congruous Second Circuit authority, other circuit courts of appeals considering accrual and ripeness in the takings context have consistently held that a cause of action does not accrue until a party has a right to enforce the claim." (quotation and citation omitted)); Goldstein v. Pataki , No. 06 CV 5827 (NGG) (RML), 2007 WL 1695573, at *12 (E.D.N.Y. Feb. 23, 2007) ("It stands to reason that if the plaintiffs’ claims accrued, for statute of limitations purposes, at the time of the government entity's public purpose finding, then their claims must have been ripe at that point. Indeed, ... courts often use the terms ‘ripeness’ and ‘accrual’ interchangeably."), report and recommendation adopted in relevant part , 488 F. Supp. 2d 254 (E.D.N.Y. 2007), aff'd , 516 F.3d 50 (2d Cir. 2008) ; W.J.F. Realty Corp. v. Town of Southampton , 351 F. Supp. 2d 18, 23 (E.D.N.Y. 2004) (finding "the statute of limitations begins to run only after [the] ripeness requirements are met"). But see Lawson v. E. Hampton Planning & Zoning Comm'n , No. 3:07CV1270 AHN, 2008 WL 4371297, at *7 (D. Conn. Sept. 22, 2008) ("The issue of ripeness under Williamson has no bearing on whether this action was timely filed under the applicable statute of limitations.").
The Court agrees with the vast majority of courts to have addressed the issue, that in the context of a takings claim, ripeness and accrual are inextricably intertwined—and a party claiming an unconstitutional taking cannot be expected to commence a lawsuit until the claim is ripe. Thus, the statute of limitations does not begin to run until the takings claim is ripe. And while before Knick , that meant that the state court proceedings had concluded, it now means that a party does not need to await conclusion of the state court proceedings, and instead the claim is ripe (and the statute of limitations accrues) when the state regulatory entity has rendered a final decision on the matter. Thus, based on the allegations in the complaint, Plaintiffs’ § 1983 claim accrued in 2015. Specifically, on August 13, 2015, the title to the property "formally transferred to RGRTA ... with entry of the Vesting Order," and RGRTA paid Plaintiffs on November 16, 2015. (Dkt. 1 at ¶ 34).
Plaintiffs filed a claim against RGRTA in New York State Supreme Court, Monroe County on December 30, 2015, seeking direct and consequential damages as compensation for the purported value of the property (Dkt. 13-5), which the parties apparently continue to actively litigate. Before Knick ’s issuance in June 2019, the § 1983 claim presently before the Court would not have ripened until the conclusion of the now-pending state court proceedings, and Plaintiffs would have been barred from bringing suit. See TZ Manor, LLC v. Daines , No. 08-CV-3293 (KMK), 2009 WL 2242436, at *5 (S.D.N.Y. July 28, 2009) (collecting cases). However, in Knick ’s wake, the latest date that Plaintiffs’ cause of action could have arguably accrued was the date of RGRTA's payment for the property—November 16, 2015, see Kirby Forest Indus., Inc. v. United States , 467 U.S. 1, 10-15, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984) (holding that in a "straight-condemnation proceeding" the date of taking is the date the government "tenders payment to the owner of the land"), meaning that the statute of limitations ran at the latest in November 2018. Plaintiffs did not file the instant action until October 9, 2019. (See Dkt. 1). Accordingly, a strict application of the statute of limitations would bar Plaintiffs’ claims as untimely.
B. Equitable Tolling
Plaintiffs contend that their § 1983 claim may proceed under the doctrine of equitable tolling. (Dkt. 17 at 17-18). "With respect to equitable tolling in Section 1983 actions, it is well-settled that federal courts should borrow the forum state's tolling rules. As the Second Circuit has explained, New York courts have adopted the same equitable tolling doctrine that exists under federal law." Ellis v. Wilkinson , 81 F. Supp. 3d 229, 235 (E.D.N.Y. 2015) (citations omitted). "Equitable tolling permits a plaintiff to avoid the bar of the statute of limitations if despite all due diligence he is unable to obtain vital information bearing on the existence of his claim." Valdez ex rel. Donely v. United States , 518 F.3d 173, 182 (2d Cir. 2008) (citation omitted). "A litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way." Victorial v. Burge , 477 F. Supp. 2d 652, 654 (S.D.N.Y. 2007) (quotation and citation omitted); see also Boos v. Runyon , 201 F.3d 178, 185 (2d Cir. 2000) ("The burden of demonstrating the appropriateness of equitable tolling ... lies with the plaintiff."). "Equitable tolling is a rare remedy to be applied in unusual circumstances, not a cure-all for an entirely common state of affairs." Wallace , 549 U.S. at 396, 127 S.Ct. 1091.
When a plaintiff raises an equitable tolling argument in response to a motion to dismiss on statute of limitations grounds, the motion to dismiss should be denied "unless all assertions of the complaint, as read with required liberality, would not permit the plaintiffs to prove that this statute was tolled." Franco v. Diaz , 51 F. Supp. 3d 235, 248 (E.D.N.Y. 2014) (quoting In re S. Afr. Apartheid Litig., 617 F. Supp. 2d at 287 ); see also M.G. v. N.Y.C. Dep't of Educ. , 15 F. Supp. 3d 296, 304 (S.D.N.Y. 2014). Here, taking into account the allegations of the complaint and the procedural history of the state court litigation, about which the Court has taken judicial notice, it is apparent that, at this stage of the proceedings, Plaintiffs’ claims withstand RGRTA's motion to dismiss on statute of limitations grounds based upon equitable tolling.
First, the plausible allegations in the complaint and the procedural history of the state court litigation support a conclusion that Plaintiffs have diligently pursued their rights. They filed a state court lawsuit in the month following Defendant's issuance of the payment for the property (Dkt. 13-5), and appear to have been actively litigating the claims set forth therein. (See Dkt. 13-6; Dkt. 22); see O'Neil v. Cal. Coastal Comm'n , No. 2:19-CV-07749-ODW (AFMx), 2020 WL 2522026, at *6 (C.D. Cal. May 18, 2020) ("[U]ntil 2019, the Supreme Court rule of law established that a plaintiff seeking a federal takings claim must first seek ‘compensation through the procedures the State had provided.’ Knick , 139 S. Ct. at 2169 (internal quotation omitted). Thus, by following [the county]’s procedures, [the plaintiff] was diligently pursuing both his administrative remedies and the federal takings claims."); see also Wharton v. Cnty. of Nassau , No. 07-CV-2137 (RRM) (ETB), 2010 WL 3749077, at *4 (E.D.N.Y. Sept. 20, 2010) (finding "Plaintiffs have acted with reasonable diligence to pursue their claims" where "Plaintiffs filed suit within thirteen months of obtaining a favorable termination"); Hargroves v. City of New York , 694 F. Supp. 2d 198, 212 (E.D.N.Y. 2010) ("Plaintiffs were diligent in pursuing their claims (each filing suit within a year after their convictions were overturned)[.]"), rev'd on other grounds , 411 F. App'x 378 (2d Cir. 2011). Additionally, Plaintiffs filed the instant lawsuit approximately three months after the Supreme Court's issuance of Knick . See Wharton , 2010 WL 3749077, at *4 (finding the plaintiffs were reasonably diligent for purposes of equitable tolling where they filed their lawsuit three months after Supreme Court issued decision altering law relevant to timeliness of claim).
Moreover, prior to the issuance of Knick , Plaintiffs faced extraordinary circumstances in trying to commence a § 1983 action in federal court—they could not have done so until the Supreme Court overturned 34-year-old precedent that materially changed the ripeness of their claim. See id. (applying doctrine of equitable tolling where "Plaintiffs, through no fault of their own, relied on then-authoritative Second Circuit precedent to their detriment, and strict application of [new precedent] would effectively deprive Plaintiffs of their cause of action"). Under the circumstances, the Court concludes that the plausible allegations before it suggest extraordinary circumstances stood in Plaintiffs’ way of commencing this litigation. See Hargroves , 694 F. Supp. 2d at 211 ("This Court's research has found no case in which the Second Circuit addressed the issue of whether an intervening change in the law ... can constitute such rare and extraordinary circumstances in the context of § 1983 .... [T]he Court now decides that, at least under the circumstances of this case, the change in law ... is the type of extraordinary circumstance that justifies equitable tolling." (footnote omitted)). At least two other courts have reached similar conclusions based on Knick . See O'Neil , 2020 WL 2522026, at *6-7 (finding a plausible factual basis to equitably toll unconstitutional takings claim based, in part, on Knick ); 4th Leaf, LLC v. City of Grayson , 425 F. Supp. 3d 810, 821 (E.D. Ky. 2019) (applying doctrine of equitable tolling to takings claim "[b]ecause the state-exhaustion requirement of Williamson County likely would have prevented Plaintiff from immediately bringing its due-process claims after the Ordinance was passed," and "it would be unjust to find that the claims are now barred").
By contrast, RGRTA relies on Yates v. Cnty. of Pima , No. CV-18-00405-TUC-DTF, 2019 WL 7561225 (D. Ariz. Aug. 2, 2019), which found that equitable tolling did not apply to a takings claim filed after Knick . Id. at *4. However, Yates is readily distinguishable from the instant matter. In Yates , the defendant county began construction in April 2011 to expand an intersection, an expansion that eliminated access to the plaintiff's property via one of two easements. Id. at *2. In October and November 2011, the plaintiff and defendant signed a tolling agreement, which extended the deadlines for the statute of limitations and filing a notice of claim for 180 days. Id. The plaintiff did not pursue any state law claims at that time, and took no further action until 2016 when he brought a declaratory judgment claim to determine the scope of his remaining easement for a rezoning application. Id. The plaintiff then brought a state law claim for inverse condemnation and a § 1983 takings claim on July 12, 2018, which the defendant removed to federal court. Id. at *1. The Yates court found that the plaintiff's claim became ripe under Knick in 2011, and that equitable tolling did not apply to his takings claim because the state court litigation commenced in 2018 was "well after" the expiration of the two-year limitations period. Id. at *4. In other words, the plaintiff in Yates did not demonstrate that he had diligently pursued his rights. However, in the instant matter, the record before the Court suggests that Plaintiffs have been actively litigating this matter in state court since shortly after the alleged unlawful taking. It was not until the Knick decision, however, that Plaintiffs’ claims in federal court were ripe and could be pursued, notwithstanding the pending state court litigation.
RGRTA argues that finding that the statute of limitations was tolled until the issuance of the decision in Knick would "breathe new life into the innumerable section 1983 takings claims that had perished due to the expiration of the statutes of limitations during the 34 years since Williamson County was decided." (Dkt. 19 at 12). Defendant greatly exaggerates the consequences of tolling the statute of limitations in this matter. The Court does not hold that every takings claim barred as untimely after Williamson should have its statute of limitations tolled. Rather, the Court's finding in the instant matter supports allowing for equitable tolling only in circumstances where on June 21, 2019, when Knick was issued, a plaintiff was actively litigating a takings claim through state court procedures but had not yet filed a § 1983 claim in federal court because of Williamson . There do not appear to be "innumerable" plaintiffs who meet this criteria as Defendant suggests; indeed, the Court's research found only three cases addressing equitable tolling of takings claims in the wake of Knick . See O'Neil , 2020 WL 2522026, at *6-7 ; 4th Leaf, LLC , 425 F. Supp. 3d at 817-20 ; Yates , 2019 WL 7561225, at *2-4.
RGRTA also argues that equitable tolling only applies in situations where a party is prevented from bringing a § 1983 claim due to fraud, misrepresentation, or deception. (Dkt. 19 at 12). However, as RGRTA recognizes in a footnote (id. at 11 n.1), the Second Circuit has "broadly stated ... that [it] will apply the equitable tolling doctrine as a matter of fairness" where "it would have been impossible for a reasonably prudent person to learn about his or her cause of action," and "has been prevented in some extraordinary way from exercising his rights." Pearl v. City of Long Beach , 296 F.3d 76, 85 (2d Cir. 2002) (quotations and citation omitted). As previously discussed, Plaintiffs could not have known that their § 1983 action would be rendered untimely by the issuance of Knick , and they could not have successfully filed this cause of action before Knick was issued under prior Supreme Court precedent. These circumstances are extraordinary, and merit allowing equitable tolling to be asserted in response to RGRTA's statute of limitations defense.
II. Abstention or Stay
RGRTA also argues that the Court "must dismiss the Complaint on abstention grounds or, in the alternative, stay this action pending resolution of the state court litigation." (Dkt. 13-20 at 16). Specifically, Defendant contends that the Younger doctrine requires a dismissal or alternatively a stay pending completion of the state court proceedings. (Id. at 16-23). For the reasons set forth below, neither dismissal nor a stay is warranted under Younger .
A. Younger Abstention
"Abstention from the exercise of federal jurisdiction is the exception, not the rule." Colo. River Water Conservation Dist. v. United States , 424 U.S. 800, 813, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). "The abstention doctrine comprises a few ‘extraordinary and narrow exception[s]’ to a federal court's duty to exercise its jurisdiction." Woodford v. Cmty. Action Agency of Greene Cnty., Inc. , 239 F.3d 517, 522 (2d Cir. 2001) (alteration in original) (quoting Colo. River , 424 U.S. at 813, 96 S.Ct. 1236 ). "Abstention is not in order simply because a pending state-court proceeding involves the same subject matter." Sprint Commc'ns, Inc. v. Jacobs , 571 U.S. 69, 72, 134 S.Ct. 584, 187 L.Ed.2d 505 (2013).
" Younger is not a jurisdictional bar based on Article III requirements, but instead a prudential limitation on the court's exercise of jurisdiction grounded in equitable considerations of comity." Spargo v. N.Y. State Comm'n on Jud. Conduct , 351 F.3d 65, 74 (2d Cir. 2003). " Younger abstention is grounded partly on traditional principles of equity, but ... primarily on the even more vital consideration of comity, which includes a proper respect for state functions, a recognition of the fact that the entire country is made up of a Union of separate state governments, and a continuance of the belief that the National Government will fare best if the States and their institutions are left free to perform their separate functions in their separate ways." Trump v. Vance , 941 F.3d 631, 637 (2d Cir. 2019), cert. granted , ––– U.S. ––––, 140 S. Ct. 659, 205 L.Ed.2d 418 (2019), and aff'd and remanded , ––– U.S. ––––, 140 S. Ct. 2412, 207 L.Ed.2d 907 (2020) (internal quotations omitted) (quoting New Orleans Pub. Serv., Inc. v. Council of City of New Orleans , 491 U.S. 350, 364, 109 S.Ct. 2506, 105 L.Ed.2d 298 (1989) ).
" Younger was initially developed as a limitation on the ability of federal courts to interfere with pending state criminal proceedings ...." ACRA Turf Club, LLC v. Zanzuccki , 748 F.3d 127, 132 (3d Cir. 2014). Although it has been expanded beyond that initial purpose, the Supreme Court made clear in Sprint that "[c]ircumstances fitting within the Younger doctrine ... are ‘exceptional’; they include ... state criminal prosecutions, civil enforcement proceedings, and civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions." Sprint Commc'ns, Inc. , 571 U.S. at 73, 134 S.Ct. 584 (internal quotations and citation omitted); see Disability Rights N.Y. v. New York , 916 F.3d 129, 133 (2d Cir. 2019) ("In Sprint , the Supreme Court held that Younger ’s scope is limited to these three ‘exceptional’ categories ....").
The Second Circuit has held that "application of the Younger doctrine is inappropriate where the litigant seeks money damages for an alleged violation of § 1983 [.]" Rivers v. McLeod , 252 F.3d 99, 101-02 (2d Cir. 2001) (per curiam); see Jones v. Cnty. of Westchester , 678 F. App'x 48, 50 (2d Cir. 2017) (discussing that while "[t]he Supreme Court has noted that ‘the extent to which the Younger doctrine applies to a federal action seeking only monetary relief’ is an open question," the Second Circuit has "held that abstaining from cases involving efforts only to obtain money damages is inappropriate" (quoting Deakins v. Monaghan , 484 U.S. 193, 202, 108 S.Ct. 523, 98 L.Ed.2d 529 (1988) ); see Kirschner v. Klemons , 225 F.3d 227, 238 (2d Cir. 2000) (dismissing matter and finding Younger abstention not appropriate where § 1983 claim sought money damages as opposed to declaratory or injunctive relief); see also Quackenbush v. Allstate Ins. Co. , 517 U.S. 706, 731, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) ("[F]ederal courts have the power to dismiss or remand cases based on abstention principles only where the relief being sought is equitable or otherwise discretionary."). In other words, " Younger mandates abstention only when the plaintiff seeks to enjoin ongoing state proceedings ...." Disability Rights N.Y. , 916 F.3d at 134. This case does not fall within the scope of Younger . Plaintiffs seek only monetary damages, not any form of injunctive or declaratory relief. (Dkt. 1 at 20). Moreover, Plaintiffs’ case does not fall within the scope of the "exceptional" circumstances outlined in Sprint —it does not involve state criminal prosecutions, civil enforcement proceedings, or "civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions." Sprint , 571 U.S. at 73, 78, 134 S.Ct. 584. RGRTA fails to address the standard under Sprint in its motion papers—in fact, neither party addresses or cites to Sprint which, to say the least, is surprising in view of the Supreme Court's admonition that Younger extends only to the "three ‘exceptional circumstances’ " identified therein and "no further." 571 U.S. at 82, 134 S.Ct. 584. The first two classes of cases identified by Sprint are not applicable, as the state court proceeding involves neither a criminal proceeding nor a civil enforcement action. In addition, the Court is not persuaded that the third Sprint category is applicable as the state court proceedings do not involve orders that are "uniquely in furtherance of the state courts’ ability to perform their judicial functions." 571 U.S. at 73, 134 S.Ct. 584. In Sprint the examples cited by the Supreme Court were cases involving a contempt order and an order requiring the posting of a bond on appeal. Id. at 79, 134 S.Ct. 584. See Disability Rights N.Y. , 916 F.3d at 133 (explaining that "[c]ivil contempt orders and orders requiring the posting of bonds on appeal" fall into the third Sprint category). While the parties’ lack of briefing on this issue is not particularly helpful, the Court's own research has not revealed a case supporting application of Sprint ’s third category of cases to the present situation, and in fact, there is case law suggesting otherwise. See Boerschig v. Trans-Pecos Pipeline, L.L.C. , 872 F.3d 701, 705 n.2 (5th Cir. 2017) (concluding that eminent domain proceedings do not fall within the third Sprint category of cases); Milhaven v. Country Vill. Apartment , No. 19-CV-2384 (KMK), 2020 WL 5663380, at *1, *7-8 (S.D.N.Y. Sept. 23, 2020) (finding that state court eviction proceeding did not fit within third category of cases identified by Sprint ). As one district court has explained:
In its supplemental submission, RGRTA cites to Fair Assessment in Real Estate Ass'n, Inc. v. McNary , 454 U.S. 100, 102 S.Ct. 177, 70 L.Ed.2d 271 (1981), to argue that Younger abstention extends to Plaintiffs’ claim seeking money damages because a damage award would require a declaration that it violated Plaintiffs’ constitutional rights. (Dkt. 24 at 7-9). The Court disagrees. The plaintiffs in McNary brought a lawsuit pursuant to § 1983 for damages, alleging improper administration of state tax laws. Id. at 106-07, 102 S.Ct. 177. The Supreme Court, in holding that abstention and dismissal were appropriate, repeatedly emphasized that the plaintiffs’ claims involved "the important and sensitive nature of state tax systems and the need for federal-court restraint when deciding cases that affect such systems." Id. at 102, 107, 102 S.Ct. 177. McNary was particularly concerned with the potential chilling effect of allowing the lawsuit to proceed, noting that state officials "faced with the prospect of personal liability to numerous taxpayers, not to mention the assessment of attorney's fees under 42 U.S.C. § 1988, would promptly cease the conduct found to have infringed petitioners’ constitutional rights," and that the "action would in every practical sense operate to suspend collection of the state taxes." Id. at 114-15, 102 S.Ct. 177 (quotation and citation omitted). The Supreme Court in subsequent decisions has recognized the narrow confines of its ruling in McNary . See Quackenbush , 517 U.S. at 719, 116 S.Ct. 1712 ("To the extent [McNary ] does apply abstention principles, its holding is very limited. The damages action in that case was based on the unconstitutional application of a state tax law, and the award of damages turned first on a declaration that the state tax was in fact unconstitutional.").
RGRTA argues in its supplemental submission that "while RGRTA relied in its moving papers on Younger and its progeny, RGRTA's motion was, in fact, based not on Younger itself, but rather on the overarching principles of federalism and comity espoused therein, and in many doctrines of federal abstention." (Dkt. 24 at 6). In support of this argument, it cites to the notice of motion's generic reference to "principles of comity and federalism." (Dkt. 13). RGRTA's attempt to alter its arguments in its supplemental submission is inappropriate. The supplemental submission was only authorized by this Court's Text Order entered on June 24, 2020, which sought submissions on a very narrow issue: "does the abstention doctrine set forth in Younger v. Harris , 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), apply where a litigant only seeks money damages for an alleged violation of 42 U.S.C. § 1983 ?" (Dkt. 23). To the extent RGRTA attempts to argue beyond that discrete issue with its supplemental submissions, the Court will not consider those arguments as they were not properly raised in the initial motion papers and they were not authorized by the Court's Text Order seeking supplemental submissions. Furthermore, RGRTA cannot try and change at this late stage the theory of its motion to dismiss, which as it acknowledges relied on Younger . A generic reference in a notice of motion does not properly raise issues for a Court's consideration, and the Court should not have to guess as to the arguments being advanced in support of a motion to dismiss.
The parties instead focus their arguments on the three conditions outlined in Spargo , 351 F.3d at 75, which were based on the Supreme Court's holding in Middlesex Cnty. Ethics Comm. v. Garden State Bar Ass'n , 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982). (See Dkt. 13-20 at 17-23; Dkt. 17 at 24-27; Dkt. 19 at 14-15). However, the Second Circuit has explained it is error to treat those factors as dispositive and ignore "the straightforward categorical approach required by Sprint ." Falco v. Justices of the Matrim. Parts of Sup. Ct. of Suffolk Cnty. , 805 F.3d 425, 427 (2d Cir. 2015). As the Supreme Court explained in Sprint , "[d]ivorced from their quasi-criminal context, the three Middlesex conditions would extend Younger to virtually all parallel state and federal proceedings, at least where a party could identify a plausibly important state interest.... That result is irreconcilable with our dominant instruction that, even in the presence of parallel state proceedings, abstention from the exercise of federal jurisdiction is the ‘exception, not the rule.’ " 571 U.S. at 81-82, 134 S.Ct. 584 (citations omitted).
[T]he third category of abstention-worthy disputes has been applied only to a few exceptional types of cases ... such as child custody proceedings, civil contempt orders, and requirements for posting bonds pending appeal. On the other hand, disputes touching on a state's land use policies, such as the inverse-condemnation action here, although doubtless related to important state interests, do not necessarily warrant abstention.
Godfrey v. Upland Borough , 246 F. Supp. 3d 1078, 1094 (E.D. Pa. 2017).
At bottom, RGRTA argues that because Plaintiffs challenge the impact of a state court regulation on their ability to recover for the value of property that was taken, then this § 1983 action seeking money damages for the alleged unjust taking is barred by Younger . RGRTA fails to explain how this action seeking monetary relief would unduly interfere with the state court proceeding nor does it make any attempt to explain how this case fits within one of the narrow categories of cases identified by Sprint . The Court concludes that Younger abstention does not apply. This is not to say that there may not be some other obstacle to Plaintiffs ultimately being able to recover in this federal court action alleging constitutional violations by RGRTA involving a state court's application of a state court regulation under these circumstances. But the issue before the Court with this motion is whether Younger abstention requires dismissal, and the answer to that question is no.
B. Stay
In its initial motion papers, RGRTA makes an alternative request to stay this action pending resolution of the state court proceeding, if the matter is not dismissed on Younger abstention grounds. (Dkt. 13-20 at 16). However, there is no development of this argument in either the initial motion papers or the reply papers. In its supplemental submission, perhaps recognizing the inapplicability of Younger abstention to a case seeking only monetary relief, RGRTA attempts to expand further on its stay request, relying on Kirschner v. Klemons , 225 F.3d 227 (2d Cir. 2000) and Giulini v. Blessing , 654 F.2d 189 (2d Cir. 1981). (Dkt. 24 at 5-6). In both Kirschner and Giulini , the equitable relief being sought in federal court was barred on Younger abstention grounds, but the damages claims survived. In Kirschner , the Second Circuit reversed the district court's dismissal of the claims seeking monetary relief, with directions on remand to consider whether a stay pending completion of the state court proceeding was appropriate. 225 F.3d at 238-39. In Giulini , the Second Circuit similarly found it was error for the district court to dismiss the federal court claim seeking damages, but concluded it was appropriate to stay the federal court litigation pending a resolution of the state court criminal proceeding. 654 F.2d at 193-94.
Unlike either Kirschner or Giulini , Plaintiffs have not had claims for equitable relief dismissed while their claims for money damages survived. A more recent Second Circuit decision suggests that it would be error to stay a case seeking only monetary relief based on Younger . See Jones , 678 F. App'x at 50 (reversing district court's grant of stay based on Younger where suit was one for money damages only). Indeed, with the Supreme Court's decision in Knick , it seems apparent that a stay under the circumstances of this case would be inappropriate. In other words, Knick stands for the proposition that a plaintiff bringing a takings claim pursuant to § 1983 should be able to pursue that claim in federal court as soon as the alleged taking happens regardless of any available state procedures. 139 S. Ct. at 2177 ("[B]ecause the violation is complete at the time of the taking, pursuit of a remedy in federal court need not await any subsequent state action."). To grant a stay would undermine that principle endorsed by the Supreme Court in Knick . Based on its consideration of all of these factors, the Court concludes that it would not be an appropriate exercise of its discretion to stay this federal court litigation pending a resolution of the state court proceeding.
III. Second Cause of Action
In the initial moving papers, RGRTA stated in a footnote that the second cause of action does not "provide any independent basis for RGRTA's liability," and "the second ‘claim’ set forth in the Complaint need not be evaluated separately for purposes" of the motion to dismiss on statute of limitations grounds. (Dkt. 13-20 at 11 n.2). This was the extent of any argument directed specifically to the second cause of action. In response, Plaintiffs contended that the second claim stated a viable cause of action, but alternatively if the Court disagreed, they sought leave to amend the complaint. (Dkt. 16 at ¶ 3). In its reply memorandum, RGRTA devoted an entire section of its brief to discussing the alleged deficiencies with the second cause of action. (Dkt. 19 at 13-14).
To be clear, the Court has serious questions as to the plausibility of the second cause of action as a stand-alone claim. Furthermore, to the extent that Plaintiffs were requesting leave to amend, it was not a procedurally proper request. See Wi3, Inc. v. Actiontec Elecs., Inc. , 71 F. Supp. 3d 358, 363 (W.D.N.Y. 2014). However, the Court does not even reach these issues because RGRTA has not properly placed the sufficiency of the second cause of action before this Court, by only dropping a reference to it in a footnote in its initial memorandum of law, see , e.g. , F.T.C. v. Tax Club, Inc. , 994 F. Supp. 2d 461, 471 n.1 (S.D.N.Y. 2014) ("It is well settled ... that a court need not consider arguments relegated to footnotes[.]"); Primmer v. CBS Studios, Inc. , 667 F. Supp. 2d 248, 256 n.4 (S.D.N.Y. 2009) ("[B]ecause the argument is made wholly in a footnote ..., the Court may choose to disregard it."); cf. Diesel v. Town of Lewisboro , 232 F.3d 92, 110 (2d Cir. 2000) ("We do not consider an argument mentioned only in a footnote to be adequately raised or preserved for appellate review.") (citation omitted), and raising it for the first time in the body of its memorandum of law on reply, see Jiles v. Rochester Genesee Reg'l Transp. Auth. , 317 F. Supp. 3d 695, 701 (W.D.N.Y. 2018) ("[i]t is well settled that courts should not consider arguments first raised in a party's reply brief which afford no opportunity for response from the opposing party" (citation omitted)).
Accordingly, to the extent RGRTA is seeking to dismiss Plaintiffs’ second cause of action for failure to state a claim, the request for relief is denied without prejudice to filing a procedurally-compliant motion.
CONCLUSION
For the reasons set forth above, the Court denies Defendant's motion to dismiss and alternative request to stay. (Dkt. 13).
SO ORDERED.