Ripeness Can Blossom on Appeal, Holds Fifth Circuit

In DM Arbor Court, Ltd. v. City of Houston, No. 20-20194 (5th Cir. Feb. 12, 2021), a challenge to a city’s failure to act on applications for construction permits became ripe on appeal because—while it was pending—the City Council ruled and denied the permits.

Following flooding from Hurricane Harvey in 2017, Arbor Court Apartments applied for construction permits to repair the damage. “Under the City of Houston’s Floodplain Ordinance, owners of property within certain flood-prone areas must obtain a permit from the City before making substantial repairs to their property ….”

“Initially, the City placed a hold on the permits, finding that the apartments were too damaged to repair under FEMA Guidelines that prevent reconstruction that will exceed a certain percentage of the property’s value. After negotiations over that issue, the City eventually removed the hold. But before the City had determined whether the permits should issue, Arbor Court filed this lawsuit, asserting regulatory takings claims—as well as other constitutional violations—against the City.” Thereafter, the city denied the permits and the Arbor Court administratively appealed the denial.

While the city was still reviewing an appeal by Arbor Court, the district court dismissed Arbor Court’s case on ripeness grounds without prejudice. “A few months after the district court entered its final judgment, the City Council denied Arbor Court’s permit requests, marking the end of the permit appeal process.”

The Fifth Circuit vacates and remands, because the case became ripe pending appeal. The panel notes that “[a] regulatory takings claim is not ripe until the government has reached a final decision on the challenged regulation …. Only after the final regulatory decision will a court have before it the facts necessary to evaluate a regulatory takings claim ….So the district court got it right—this dispute was not ripe when it entered judgment dismissing the case, and it would have been futile for Arbor Court to amend its complaint to add an additional unripe claim.”

“But an idiosyncratic feature of ripeness law requires a different result.” Contrary to other jurisdictional doctrines, because ripeness if rooted in prudential considerations, a federal court may gain subject-matter jurisdiction over an unripe matter after it has been filed. “[W]e can rest easier in applying that rule here because the final decisionmaker requirement for takings claims is motivated by prudential concerns about the fitness of the issue for judicial review.”

Moreover, the obligation to declare a dispute ripe due to intervening events is binding on the court. “Although some of the ripeness-on-appeal caselaw is couched in the language of discretion … our best reading of the decisions—especially those from the Supreme Court—is that ‘[i]ntervening events that occur after decision in lower courts should be included’ when an appellate court assesses ripeness …. Everyone agrees that the impediment that existed in the district court—the lack of a final decision from the City Council—is now absent. As a result, this case has become ripe and should be remanded for consideration of the merits.”

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