from the United States District Court for the District of
Utah (D.C. No. 2:15-CV-00018-DAK-EJF)
Timothy McCaffrey, Freeborn & Peters LLP, Chicago,
Illinois (Michael R. Johnson, Robert G. Wing, and Matthew M.
Cannon, Ray Quinney & Nebeker, Salt Lake City, Utah, with
him on the briefs), for Plaintiff-Appellant.
R. Gaylord, Ballard Spahr, Salt Lake City, Utah (Melanie J.
Vartabedian and Tyler Hawkins, Ballard Spahr, LLP, Salt Lake
City, Utah, Barton H. Kunz, II, and Bryson R. Brown,
Christensen & Jensen, P.C., Salt Lake City, Utah, with
him on the brief), for Defendants-Appellees.
HOLMES, SEYMOUR, and MORITZ, Circuit Judges.
MORITZ, Circuit Judge.
Acquisitions, LLC (VRA) owns a roughly 6, 700-acre property
in Utah's Jordanelle Basin (the VR property). VRA brought
this action in 2015, asserting three federal constitutional
claims under 42 U.S.C. § 1983 and five state-law claims.
All of the claims rested, to some degree, on VRA's
assertion that an invalid assessment lien was recorded
against the VR property in 2009-three years before VRA bought
the property. The district court dismissed all eight claims
with prejudice under Fed.R.Civ.P. 12(b)(6), and VRA appeals.
Because the district court properly dismissed VRA's
§ 1983 claims for lack of prudential standing, we affirm
the dismissal of those claims with prejudice. But because the
district court should have declined to exercise supplemental
jurisdiction over VRA's state-law claims, we reverse its
dismissal with prejudice of those claims and remand with
directions for the district court to dismiss those claims
1993, the Wasatch County Council (the Council) established
the Jordanelle Special Service District (the JSSD) to provide
sewer and water services to residents in the Jordanelle
Basin. During the time period relevant to VRA's
allegations, Jay Price was a member of the Council and Dan
Matthews was the JSSD's manager.
least as early as 2002, the JSSD intended to construct a
regional sewage treatment facility and provide wastewater
treatment services to both the JSSD service area and
properties in neighboring special service districts. In 2005,
the JSSD adopted Resolution No. 2005-18 (the Notice of
Intention), declaring its intent to create the Jordanelle
Special Service Improvement District No. 2005-2 (the
District) and to levy assessments against properties within
the District. In 2006, the JSSD adopted Resolution 2006-04
(the Creation Ordinance), creating the District and
authorizing financing for the improvements described in the
Notice of Intention. In 2009, after a period of public
comment, the JSSD enacted Ordinance No. 09-10 (the Assessment
Ordinance), levying assessments against properties within the
District- including the VR property.
assessment against the VR property totaled nearly $17.5
million. The property's prior owner elected to pay the
assessment over 20 years. On September 24, 2009, the JSSD
recorded a Notice of Assessment Interest (the Assessment
Lien) against the VR property.
Realty Sixteen, Inc. obtained title to the VR property from
the prior owner in 2010 through a deed in lieu of
foreclosure. VRA bought the VR property from ATC Realty in
2012 with knowledge of the Assessment Lien.
three years later, VRA brought this action asserting three
§ 1983 claims: (1) a Fourteenth Amendment procedural due
process claim, (2) a Fourteenth Amendment substantive due
process claim, and (3) a Fifth and Fourteenth Amendment
takings claim. VRA primarily sought a declaration that the
Assessment Ordinance, the Creation Ordinance, and the Notice
of Intention are void ab initio, and also sought
removal of the Assessment Lien.
support of these claims, VRA primarily alleged that the JSSD
intentionally issued a false and misleading Notice of
Intention in 2005 so property owners wouldn't object to
the creation of the District or the proposed assessments
against their properties. VRA further attacked the validity
of the Assessment Lien by alleging that the JSSD misused bond
money and unlawfully permitted non-assessed property owners
to benefit from water and sewer improvements that were paid
for only by assessed property owners. Finally, VRA alleged
that Price and Matthews abused their public positions by
funneling bond money to friends and family through
questionable real estate and water rights transactions
related to construction of the improvements.
defendants moved under Rule 12(b)(6) to dismiss VRA's
complaint. The district court granted the defendants'
motion and dismissed all of VRA's claims with prejudice,
reasoning that (1) the claims are time-barred under Utah Code
Ann. § 11- 42-106's 30-day limitation period for
contesting an assessment; (2) the claims are time-barred
under Utah Code Ann. § 78B-2-307(3)'s four-year
statute of limitations; (3) VRA lacks standing to assert
claims that belong to the VR property's prior owner; ...