M.A.K. INVESTMENT GROUP, LLC, a Colorado limited liability company, Plaintiff - Appellant,
CITY OF GLENDALE, a political subdivision of the State of Colorado; and GLENDALE URBAN RENEWAL AUTHORITY, a Colorado urban renewal authority, Defendants - Appellees.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
COLORADO (D.C. NO. 1:15-CV-02353-RBJ)
Alexander Pilmer (Michael A. Onufer, and Lianna Bash on
Opening Brief replaced by Allison Ozurovich on Reply Brief,
Kirkland and Ellis LLP, Los Angeles, California, and Timothy
G. Atkinson, Russell W. Kemp, and James R. Silvestro, Ireland
Stapleton Pryor & Pascoe, P.C., Denver, Colorado, with
him on the briefs), Kirkland and Ellis LLP, Los Angeles,
California, for Appellant.
Michael P. Zwiebel (Jeffrey A. Springer, Jason C. Astle, and
Matthew R. Giacomoni with him on the brief), Springer &
Steinberg, P.C., Denver, Colorado, for Appellees.
TYMKOVICH, Chief Judge, SEYMOUR, and McHUGH, Circuit Judges.
TYMKOVICH, Chief Judge.
Investment Group, LLC owns several parcels of property in
Glendale, Colorado. The City of Glendale adopted a resolution
declaring several of M.A.K.'s parcels
"blighted" under state law. Glendale never notified
M.A.K. of its resolution or the legal consequences flowing
from it. In fact, the blight resolution began a seven-year
window in which the City could begin condemnation proceedings
against M.A.K.'s property. It also started the clock on a
thirty-day window in which M.A.K. had a right to seek
judicial review of the blight resolution under state law.
Receiving no notice, M.A.K. did not timely seek review.
argues Colorado's Urban Renewal statute- both on its face
and as-applied to M.A.K.-violates due process because it does
not require municipalities to notify property owners about
(1) an adverse blight determination, or (2) the thirty days
owners have to seek review. We conclude the statute is
unconstitutional as applied to M.A.K. because M.A.K. did not
receive notice that Glendale found its property blighted.
Since we hold the statute violated due process as applied to
M.A.K., we need not decide whether the statute is
unconstitutional on its face. As for M.A.K.'s second
argument, we hold that due process did not require Glendale
to inform M.A.K. about the thirty-day review window.
begin by describing the relevant statutory framework.
Colorado's urban renewal statute
Urban Renewal statute declares eliminating
"blighted" areas to be a public use for which
municipalities can use their power of eminent domain. Colo.
Rev. Stat. § 31-25-102. The law enables municipalities
to eventually transfer blighted private property to other
private parties or public entities for redevelopment. After a
municipality determines an area is blighted, it can begin
condemnation proceedings against the blighted property at any
time for seven years following the blight determination.
§ 31-25-105.5(2)(a)(I). The blight determination is
therefore not a complete taking in the constitutional sense,
but it slates the property for possible condemnation in the
label a property blighted, municipalities must meet certain
statutory requirements. Municipalities must find that the
property meets "at least five" of the eleven
statutory blight factors. See §
31-25-105.5(5)(a). Those findings must be made at a public
hearing. § 31-25-107(1)(a), (3)(a). And the findings
must be based on "reasonably current information
obtained at the time the blight determination is made."
Act allows property owners to challenge a city's blight
determination. "Any owner of property located within the
urban renewal area may challenge the determination of blight
made by the governing body . . . by filing, not later than
thirty days after the date the determination of blight is
made, a civil action in district court for the county in
which the property is located . . . ." §
31-25-105.5(2)(b). The civil action is "for judicial
review of the exercise of discretion on the part of the
governing body in making the determination of blight, "
and "the governing body shall have the burden of proving
that, in making its determination of blight, it has neither
exceeded its jurisdiction nor abused its discretion."
notice, the statute requires a city to notify property owners
in two instances: (1) when the city begins a study regarding
blight involving their properties, and (2) when the city will
hold a hearing regarding its intention to acquire property
for public or private redevelopment. See §
when it comes to the results of these blight
hearings, the notice requirement depends on whether the city
found the property at issue blighted or not. Strangely
enough, Colorado's statute requires a city to mail notice
to those whose property it does not find blighted,
but does not require a city to notify those whose property it
does find blighted. See §
31-25-107(1)(b). The statute also takes care to note that
"[n]otwithstanding any other provision of law, any
determination made by the governing body . . . shall be
deemed a legislative determination and shall not be deemed a
quasi-judicial determination." § 31-25-105.5(2)(c).
This has consequences we will discuss below.
The blight determination
to its complaint, M.A.K. owns several parcels of real
property in Glendale, Colorado. Seeking to redevelop its
property, M.A.K. began working with the city of Glendale on a
private redevelopment plan.
2013, the City of Glendale embarked on a "Riverwalk
Urban Renewal Plan." The Plan entailed declaring a group
of properties blighted under the Urban Renewal Law, allowing
the City to condemn the properties and commence their private
redevelopment. M.A.K.'s property was among the properties
affected by the Plan. In April of the same year, Glendale
notified M.A.K. it was commencing a study on whether an area
that included M.A.K.'s property was blighted. The notice
explained that Glendale would hold a hearing on May 7, 2013
to approve the Riverwalk Urban Renewal Plan. According to
M.A.K.'s complaint, the notice did not explain that the
hearing related to the possibility of future condemnation
proceedings against M.A.K.'s property.
receiving this letter, M.A.K. claims one of its principals
met with a representative of Glendale and asked what
"blight" meant and whether M.A.K. should take any
action in response. The representative answered that M.A.K.
"did not need to worry about the notice." App. 15.
Having worked with the City representative before, M.A.K.
relied on his statement and did not attend the hearing.
May 7 hearing, Glendale found M.A.K.'s property blighted
pursuant to the statutory factors. Glendale did not notify
M.A.K. of this determination. Nor did Glendale inform M.A.K.
of the thirty-day window to challenge it in state court. For
that reason, M.A.K. claims it did not learn about the blight
determination until November 2013, when it engaged a real
estate attorney to assist in M.A.K.'s private
redevelopment of its property. By that time, the thirty-day
window to challenge the determination had closed.
brought suit against Glendale under 42 U.S.C. § 1983,
challenging Colorado's Urban Renewal statute both
facially and as applied to its property. M.A.K. alleged the
statute violated both the Due Process and Equal Protection
Clauses of the Fourteenth Amendment. The district court
granted Glendale's motion to dismiss both claims. In the
district court's view, M.A.K. did not have due process
rights at stake because the blight determination was
legislative in nature. M.A.K.'s equal protection claim,
on the other hand, failed because the statute did not treat
M.A.K. differently from others similarly situated. M.A.K.
appealed only the court's dismissal of its procedural due
argues Colorado's Urban Renewal Statute fails due process
as applied to M.A.K. because (1) it does not provide for
adequate notice when a city finds a landowner's property
blighted, (2) it does not provide for notice of the
thirty-day review period, and (3) M.A.K. in fact did not know
about the blight determination or the right of review within
thirty days. We agree only with its first proposition: the
city's failure to notify M.A.K. of the blight
determination violated M.A.K.'s right to due
"review the grant of a Rule 12(b)(6) motion to dismiss
de novo." Christy Sports, LLC v. Deer Valley Resort
Co., 555 F.3d 1188, 1191 (10th Cir. 2009). In doing so,
we "must accept all the well-pleaded allegations of the
complaint as true and must construe them in the light most
favorable to the plaintiff." Albers v. Bd. of Cnty.
Comm'rs of Jefferson Cty., 771 F.3d 697, 700 (10th
Cir. 2014). A district court must deny a motion to dismiss if
the complaint provides "facts sufficient to state a
claim to relief that is plausible on its face."
Id. (internal quotation omitted).
M.A.K. claims the statute's application in this case
violated its procedural due process rights, we undertake the
familiar "two-step inquiry" for procedural due
process cases. See Pater v. City of Casper, 646 F.3d
1290, 1293 (10th Cir. 2011). First, "we ask whether the
City's actions deprived plaintiffs of a constitutionally
protected property interest." Id. "If
plaintiffs can satisfy this requirement, we then consider
whether they were afforded the appropriate level of
process." Id. "In so doing, we note the
procedural due process analysis is not a technical conception
with a fixed content unrelated to time, place and
circumstances, but rather is flexible and calls for such
procedural protections as the particular situation
demands." Id. at 1298 (internal quotation marks
and citation omitted).
we must answer two questions in this case. First, does M.A.K.
have a constitutionally protected property interest at stake?
Second, if it does, did Glendale provide M.A.K. sufficient
notice that its property interests were in danger? We take
each question in turn.
Protected property interest
blight determination does not effect a complete taking of
M.A.K.'s property. As explained above, it is only the
first step toward condemnation. The parties therefore debate
whether M.A.K. has a protected property interest at stake in
this case at all.
contends it has a property interest in the statutory right to
seek review within thirty days of the blight finding. We
agree with M.A.K. that it has a protected property right in
the statutory cause of action.
statute gives property owners a right to "judicial
review of the exercise of discretion on the part of the
governing body in making the determination of blight."
Colo. Rev. Stat. § 31-25-105.5(2)(b). And in the
proceeding, the city has the burden of proving that "it
has neither exceeded its jurisdiction nor abused its
discretion." Id. This state-created cause of
action constitutes a protected property interest.
Supreme Court's decision in Logan v. Zimmerman Brush
Company, 455 U.S. 422 (1982), makes that much clear.
There, the plaintiff's state-law cause of action was
dismissed because the state's Fair Employment Practices
Commission, through no fault of the plaintiff's, failed
to hold a timely conference. Id. at 424-427. The
Supreme Court explained that "the Due Process Clauses
protect civil litigants who seek recourse in the courts,
either as defendants hoping to protect their property or as
plaintiffs attempting to redress grievances."
Id. at 429. "The hallmark of property, "
the Court emphasized, "is an individual entitlement
grounded in state law, which cannot be removed except
'for cause.'" Id. at 430. The Court
explained the right to bring a cause of action is just such
an entitlement, and therefore "a species of property
protected by the Fourteenth Amendment's Due Process
Clause." Id. at 428.
Logan, then, M.A.K. had a property interest in its
statutory cause of action to challenge the blight
determination process for abuse of discretion.
objects there can be no due process right to a hearing alone
because "[p]rocess is not an end in itself" but is
meant to "protect a substantive interest to which the
individual has a legitimate claim of entitlement."
See Olim v. Wakinekona, 461 U.S. 238, 250
(1983). But Glendale's reasoning misses the
mark. The right to challenge the blight determination is not
just a right to a hearing for its own sake, but a right to
overturn a blight determination that was an abuse of
discretion pursuant to the statute. See Colo. Rev.
Stat. Ann. § 31-25-103(2); § 31-25-105.5(5)(a).
and Crown Point-cases on which Glendale relies
heavily-make this point clear. In Olim, an inmate
brought suit against state officials for transferring him to
a different prison because the transfer committee violated a
state procedural rule. Id. at 243. The state's
regulations, however, placed "no substantive limitations
on official discretion" regarding transfer decisions.
Id. at 249. The Court held Olim had no property
interest in the transfer. When a decision-maker can
"deny the requested relief for any constitutionally
permissible reason or for no reason at all, " the Court
explained, there is no substantive right at stake.