Richmond Road, a developer, owns a building in Warrensville Heights, a Cleveland suburb. Richmond Road sought to lease the building to the nonprofit Step Forward for Head Start programs, which are designed to help students from low-income families. The plan was halted by city officials, who heard complaints from residents worried that the lease would bring disadvantaged students into the neighborhood. Although the area was zoned for “public and private schools,” the city commissioners denied the application, stating that they didn’t “believe that that’s the right location for this type of day care, school, or … whatever you want to call it.”
Richmond Road appealed the city’s denial of the permit application in state court. The court found that the city’s denial was arbitrary, unreasonable, and unsupported by evidence and instructed the city to grant the permit. But by then, it was too late; Step Forward secured another lease in another location and Richmond Road was forced to buy out the mortgage after losing the lease. Richmond Road then filed a lawsuit for just compensation under the Takings Clause of the Fifth Amendment. The district court granted summary judgment for the city and the Sixth Circuit affirmed because there was no showing of an “extraordinary delay” in the permitting process.
Richmond Road has now filed a petition in the U.S. Supreme Court, which the Manhattan Institute is supporting with an amicus brief, joined by the Illinois Policy Institute and Citizen Action Defense Fund (a Seattle-based government watchdog). We make the simple points that (1) arbitrary government action damaging property interests is compensable, but (2) the “extraordinary delay” test improperly requires a showing of government bad faith—even though the government’s motives are typically irrelevant in takings cases, which rightly focus on whether there’s a compensable injury.
Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.
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