May 28, 2024 – A federal district court was correct to dismiss a takings lawsuit that was parallel to a previously filed state lawsuit challenging a taking related to the aborted Foxconn development, the U.S. Court of Appeals for the Seventh Circuit has held in Antosh v. Village of Mount Pleasant, No. 23-1678 (April 25, 2024).
In 2017, the Village of Mount Pleasant (Village) in Racine County created a tax incremental financing district (TIFD) to aid the promised development of an electronics manufacturing plant by Foxconn, a Taiwanese company.
The Village re-zoned properties inside the boundaries of the TIFD from agricultural to business park and made plans to expand and improve County Highway KR and 90th Street.
To facilitate the road expansion, the Village decided to re-route a stretch of 90th Street across a three-acre parcel owned by Pamela Antosh and Ned Lashley.
Condemnation
In 2019, the Village condemned a large section of the Antosh/Lashley parcel near where the two roads met.
Jeff M. Brown , Willamette Univ. School of Law 1997, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by
email or by phone at (608) 250-6126.
On Sept. 19, 2019, the Village made a jurisdictional offer to purchase the Antosh/Lashley property. The offer listed “highway or other transportation purposes” as the public purpose justifying the taking of the property.
On Nov. 20, 2019, the Village recorded an award of damages, which under Wis. Stat. section 32.05(7) transferred the property to the village.
State Lawsuit
In Dec. 2019, Antosh and Lashley challenged the condemnation by filing a compensation action in Racine County Circuit Court.
They sought more compensation and argued that the Village had paid other landowners in area of the promised Foxconn development five to eight times more than it had offered to pay them.
Evidentiary Dispute
The lawsuit was thrown off course by an evidentiary dispute. The expert appraiser hired by Antosh and Lashley made two valuations of their property: one with the land zoned agricultural, and one with the land zoned for a business park.
The Village filed a motion in limine and asked the circuit court to exclude the business park evaluation under section 32.09(5)(b).
The circuit court granted the Village’s motion at the final pre-trial hearing, which took place on Jan. 5, 2022.
Federal Lawsuit
Four days before the trial was to begin, on Jan. 28, 2022, Anton and Lashley filed a lawsuit in the U.S. District Court for the Eastern District of Wisconsin under 42 U.S.C. section 1983.
In the federal lawsuit, Antosh and Lashley claimed that Village had violated the Takings Clause of the Fifth Amendment by condemning their land for a private purpose.
Antosh and Lashley had not made that argument in their state court lawsuit.
‘Utter Gamesmanship’
On Jan. 31, 2022, the state court held a hearing.
Antosh and Lashley asked the court to adjourn the lawsuit. The state court stayed the trial pending the outcome of the federal lawsuit.
The Village then moved the federal district court to dismiss the takings lawsuit for failure to dismiss a claim, on the grounds that Antosh and Lashley had engaged in “utter gamesmanship” by filing the federal lawsuit in the middle of the state lawsuit.
The federal district court granted the Village’s motion. Antosh and Lashley appealed.
Parallel Cases?
Writing for a three-judge panel, Judge Diane Wood noted that in Colorado River Water Conservation District v. United States, 424 U.S. 800 (9176), the U.S. Supreme Court held that a federal court may defer to a concurrent case in state court under exceptional circumstances, where abstention would further “wise judicial administration.”
Abstention under Colorado River is appropriate, Wood explained, where: 1) the federal and state cases are parallel; and 2) a stay or dismissal is supported by exceptional circumstances.
Judge Wood acknowledged that the state and federal actions filed by Anton and Lashey involved different issues. But that didn’t end the inquiry, she reasoned.
“The fact that federal and state suits involve different issues is entirely a product of Antosh and Lashley’s own litigation choices,” Wood wrote.
“They could have raised a public-use claim years ago – either in state court, by filing a right-to-take action … or in federal court … That they now, with the benefit of hindsight, regret their earlier litigation decisions is not a valid basis for granting them a chance to start over on their takings claim in federal court,” Judge Wood wrote.
Federalism Concerns
Wood pointed out that the state action posed significant federalism concerns.
“For two years, as state court proceedings moved along, Antosh and Lashley were satisfied to contest only the amount of compensation owed,” Judge Wood wrote. “Only after the state court issued a ruling that limited the compensation they could recover did they decide to file their federal complaint.”
Antosh and Lashley argued that federal lawsuit was not an example of forum shopping.
Instead, they asserted that the Village hid the fact that road improvements behind the taking were designed to aid the Foxconn development. As a result, they claimed, they only found out they had an actionable public-use takings claim when the Village filed its motion in limine in 2021.
But that argument wasn’t credible, Wood concluded.
“Given the extensive local and national media coverage that the 2,800-acre Foxconn development received, it is hard to believe that Antosh and Lashley failed to connect the dots between the road improvement and Foxconn,” Judge Wood wrote.
Wood concluded that the federal case was an attempt to bypass the state court action.
‘Vexatious or Contrived’
Judge Wood also concluded that the circumstances surrounding the federal case favored abstention, based on the following:
both lawsuits involved the same property;
notions of judicial economy;
and the “vexatious or contrived nature of the federal claims.”
“The state court has devoted two years of judicial time and resource to resolving Antosh and Lashley’s compensation action,” Wood wrote.
