Last week, the Court of Appeals offered a warning against voluntary dismissal of claims for jurisdictional purposes. The case was Wagner v. City of Charlotte. The result was a near-total victory for the city, with only a negligence claim by only one of the two plaintiffs being reinstated after the Superior Court had granted summary judgment to the city on all claims. The practice lesson was provided by a partial concurrence that focused on plaintiffs' choice to surrender their federal claims so the case would proceed in state court and how any similar decision you face should be weighed with care.
Wagner arose from a water main burst flooding two residences. Plaintiffs brought myriad claims—inverse condemnation under state and federal law, nuisance, negligence, violation of equal protection—in Superior Court. The city filed a notice of removal based on plaintiffs’ federal constitutional claims, to which plaintiffs responded with a motion to remand and a motion for leave to file an amended complaint dropping their federal constitutional claims. Both motions were granted by the federal district court, the case was remanded, and the case proceeded to summary judgment in favor of the city on all claims.
The Court of Appeals focused on plaintiffs’ inverse condemnation claim. An inverse condemnation claim is rooted in N.C. Gen. Stat. § 40A-41 and the Law of the Land Clause found at Art. I, Section 19 of the North Carolina Constitution. The issue in Wagner was whether a taking occurred. After discussing the evolution of North Carolina’s flooding-related takings law, the Court of Appeals quoted what it considered the governing rule: “A single instance of flooding with no possibility of recurrence, even if the direct result of [the condemnor’s] structure, is not a taking of [private] property.” Wagner v. City of Charlotte, COA18-1084 at 14 (N.C. Ct. App. Feb. 4, 2020) (quoting Akzona, Inc. v. S. Ry. Co., 314 N.C. 488, 494, 334 S.E.2d 759, 763 (1985) (alteration in original)). The Akzona holding was derived from Lea Co. v. N.C. Bd. of Transp., which required that the flooding be reasonably foreseeable to the government and that it constituted a permanent invasion of the land or associated property rights. 308 N.C. 603, 611, 304 S.E.2d 164, 171 (1983).
The Wagner plaintiffs asserted that Ark. Game & Fish Comm’n v. United States, 568 U.S. 23 (2012), altered the law on inverse condemnation claims arising from flooding. In Ark. Game & Fish Comm’n, the Supreme Court rejected the government’s argument that temporary flooding was categorically excluded from being a taking. Id. at 34, 38. The Court of Appeals refused to go beyond this narrow holding in its reading of Ark. Game & Fish Comm’n and held that Ark. Game & Fish Comm’n was presaged by and in accord with Akzona. On that basis, the Court of Appeals stated a bright-line though qualified rule: “a single instance of temporary flooding of Plaintiffs’ properties without the possibility of recurrence did not constitute a taking for purposes of an inverse-condemnation claim.” Wagner, COA18-1084 at 14.
The lesson and warning are in Judge Murphy’s partial concurrence. He rejected the majority’s insistence that North Carolina jurisprudence accords with Ark. Game & Fish Comm’n. Judge Murphy noted that the United States Supreme Court considered at least five factors—duration of the invasion, extent to which the invasion is intended or foreseeable, character of the land at issue, reasonable investment-backed expectations regarding the land’s use, and severity of the interference—in its takings analysis while the North Carolina Supreme Court had only considered two factors—foreseeability and permanence of the invasion. Had the additional factors from Ark. Game & Fish Comm’n been considered, Judge Murphy would have dissented and provided an automatic route to the North Carolina Supreme Court (even though this scenario is only hypothetical given the city’s decision to initially remove the case to federal court based on the federal constitutional claim).
The lasting takeaway is to think long and hard before abandoning claims for reasons other than their merits. In Wagner, plaintiffs waived their federal claims in order to obtain remand back to state court only to argue in state court that North Carolina’s constitutional provisions should be interpreted through a federal lens. This strategy suggests that Plaintiffs may have been better off staying in federal court with double-barreled constitutional claims. Either option carried risks, and this was a situation where an outside evaluation of the merits of the two options might have led to a different choice. If you are facing a similarly tricky procedural question, bringing in someone like myself to provide an independent perspective could be invaluable, so reach out and we can discuss how I can help.