STORY

Executive Summary 

Beacon has petitioned the United States Supreme Court for review on an important property rights issue that affects thousands of Tennesseans. Beacon advances the principle that “citizens should receive their permit in a reasonable timeframe. The government should not be able to trap people in the bureaucratic process by ‘denying by delay.’” Unfortunately, property owners faced with bureaucratic delays in the permitting process have had little recourse in courts. That’s because courts have held that—absent extraordinary delay—property owners have no viable claim under the Takings Clause of the Fifth Amendment. Property owners often find it impossible to satisfy the extraordinary delay test, which typically forces them to endure delays of many years and prove that government officials acted in bad faith.  

Our petition asks the Supreme Court to make it easier for property owners to sue over delays in the permitting process. Although this case originates from Ohio, a Supreme Court win will benefit all Americans. The United States is suffering from a severe housing shortage, which makes a home unaffordable for many middle- and low-income Americans. Builders put permitting as the number one cause of construction delays, which could lead to increased costs, lost profits, or even cause builders to give up on a project. Tennesseans are often among the Americans whose dreams are sapped by bureaucratic red tape. As Governor Lee recognized in his 2024 State of the State Address, “building delays drive up the cost of homes and businesses for all Tennesseans.”

Richmond Road Partners is a local Ohio builder. Richmond Road attempted to lease one of its buildings to nonprofit Step Forward for a Head Start pre-school dedicated to serving children from low-income families, but the owner of a neighboring building objected, and the city inexplicably denied the permit request. As a result, Richmond Road lost the lease, and Step Forward was forced to relocate to another location that was less convenient for many of the school’s students and teachers. 

The Problem

Richmond Road owns a building in Warrensville Heights, a Cleveland suburb. Richmond Road agreed to lease the building to Step Forward, a nonprofit, for Head Start programs designed to help students from low-income families. Step Forward had already rented out a part of the building for its administrative offices and thought it would be the perfect place for a school. Richmond Road planned to build new classrooms, a playground, and new administrative offices for all of Step Forward’s operations in Northeast Ohio. Step Forward was elated to relocate its school to the Richmond Road site—since Richmond Road provided modern buildings, and it was located right around the block from many of the disadvantaged children that would have attended the school. 

Not everyone was happy that the lease would allow Step Forward to serve pre-school students from disadvantaged communities. The owner of a neighboring building sarcastically called it a “classy development,” and complained to city officials. Although the area was zoned for “public and private schools,” the city denied Richmond Road’s permit application. Members of the city’s planning commission provided little explanation for its arbitrary denial, and stated that they simply didn’t “believe that that’s the right location for this type of day care, school, or . . . whatever you want to call it.” According to Richmond Road, the city feared a lawsuit by the owner of the neighboring building if it approved the permit application. 

Richmond Road appealed the city’s denial of its permit to state court, which found that the city’s denial was arbitrary, unreasonable, and unsupported by evidence. The state court ordered the city to grant the permit, but 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. As a result, Richmond Road lost out on millions of dollars in revenue and Step Forward paid additional stipends to teachers who (along with students) were forced into a less convenient location. 

Richmond Road and Step Forward initiated this case seeking just compensation under the Takings Clause of the Fifth Amendment. The district court ruled against them, and the court of appeals affirmed that decision. The court of appeals acknowledged the government’s seemingly arbitrary actions in denying the permit, but held that the plaintiffs could not recover any of their damages because it did not consider the city’s delay extraordinary. 

Legal Issues

We will argue that courts shouldn’t force property owners to show that they suffered an extraordinary delay before they may assert claims under the Takings Clause. First, the extraordinary delay test should not be applied in cases in which the government has made a final decision to deny the permit application. A property owner’s takings claim accrues when the government denies the permit, and any subsequent event (e.g. legislative repeal or judicial invalidation) that cuts short the taking should only inform the amount of compensation that is due to the property owner. A contrary result would produce absurd consequences. The Tennessee Supreme Court has held that a property owner who waits too long after his permit is denied is time-barred from bringing a takings claim at all. Second, to the extent that the extraordinary delay test is applicable, it should be considered in conjunction with other relevant factors, such as the impact of the government’s actions on the property owner. It makes no sense to hold, as the court of appeals held here, that extraordinary delay must be present for there to be a viable takings claim. After all, property owners can suffer millions of dollars in damages even in cases involving short delays. In those instances, the government should not be able to use the extraordinary delay test to erase its constitutional obligation to compensate the property owner. 

The Legal Team

Wen Fa is the Vice President of Legal Affairs at the Beacon Center.  

Ben Stormes is an attorney at the Beacon Center.

Anthony Coyne, Diane Calta, and Adam Uth from Mansour Gavin were our clients’ counsel in the courts below and are co-counsel at the Supreme Court.