Jump to Navigation
Jump to Content

Daniels v. Area Plan Comm'n of Allen County

ELR Citation: 33 ELR 20049
Nos. No. 01-1158, 306 F.3d 445/(7th Cir., 09/11/2002)

The court holds that a local planning commission violated property owners' Fifth Amendment rights by vacating a restrictive covenant in their neighborhood for a private purpose. The commission vacated the covenant, which restricted development to single-family homes, in order to allow a developer to build commercial property on three lots in the neighborhood. Uninhabited houses stood on the lots at issue. Because the property owners failed to exhaust their remedies in state court before filing suit in federal court, the commission argued that their claim was not ripe. The court first holds, however, that here the state's inverse condemnation procedure would have been inadequate to address the property owners' injury. This futility therefore exempts them from the exhaustion requirements of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). The court next holds that the commission unconstitutionally applied Indiana's vacation statute to the property owners. Under Indiana law, a restrictive covenant is a constitutionally protected property interest. Because the commission took away the property owners' ability to enforce this interest, their property right was taken by state action. Further, the commission did not follow legislative determinations of what constitutes a valid public use and did not provide any facts that demonstrate that the covenant vacation is substantially related to a public interest. The commission therefore violated the public use requirement of the Takings Clause by vacating the restrictive covenant for a private purpose. Indiana's vacation statute, however, is not unconstitutional on its face. The statute can be constitutionally applied, and the U.S. Constitution does not prohibit specific delegations of state legislative power.

Counsel for Plaintiffs
John C. Theisen
Barnes & Thornburg
600 One Summit Sq., Fort Wayne IN 46802
(219) 423-9440

Counsel for Defendant
Matthew J. Elliott
Beckman & Lawson
200 E. Main St., Fort Wayne IN 46802
(219) 422-0800