United States District Court, E.D. Virginia, Norfolk Division
MEMORANDUM OPINION AND ORDER
G. DOUMAR UNITED STATES DISTRICT JUDGE
matter comes before the Court on two motions to dismiss filed
in the above-captioned case: one filed by defendants Dave
Hansen, Thomas J. Gay, and Philip J. Roehrs ("City
Employees' Motion to Dismiss"), ECF No. 6, and the
other filed by defendant Frank Gurdziel ("Gurdziel's
Motion to Dismiss''). ECF No. 3. For the reasons
stated herein, both motions to dismiss are hereby GRANTED, in
part, and the instant action is DISMISSED WITHOUT PREJUDICE.
26, 2017, Edward and Reiko Schwab, Jr., James and Carol
Melvin, Sandra D. Harris, and Michael Aschkenas
(collectively, "Plaintiffs''') filed the
instant action pursuant to 42 U.S.C. § 1983 against the
following four defendants: Dave Hansen, Frank Gurdziel.
Thomas J. Gay, and Philip J. Roehrs (collectively,
"Defendants"). Complaint ("Compl."), HCF
No. 1. Plaintiffs' complaint alleges that Defendants
violated Plaintiffs' rights to due process under the
Fifth and Fourteenth Amendments in connection with the
creation of special taxation district by the City of Virginia
Beach between 2011 and 2013. Id. Plaintiffs request
$575, 174.00 in damages as well as declaratory and injunctive
September 1, 2017, Frank Gurdziel, by counsel, filed a motion
to dismiss Plaintiffs' complaint pursuant to
Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure. ECF No. 3. His motion also requests an award of
costs and attorneys' fees pursuant to 42 U.S.C. §
1988. Id. On the same day, the remaining defendants,
Dave Hansen, Thomas Gay, and Philip Roehrs, by counsel,
jointly filed a motion to dismiss Plaintiffs' complaint
on largely the same grounds. ECF No. 6. On September 15,
2017, Plaintiffs filed a brief in opposition to both motions
to dismiss ("Resp."). ECF No. 9. On September 21,
2017, Frank Gurdziel and the remaining defendants filed their
respective reply briefs. See Gurdziel's Reply, ECF No.
11; City Employees' Reply, ECF No. 10. Defendants'
motions to dismiss are now ripe for decision.
Summary of Facts Alleged in the Complaint
complaint alleges the following relevant facts. Plaintiffs
are residents of Virginia and waterfront property owners in
the Chesopeian Colony subdivision located in the City of
Virginia Beach. Compl. ¶¶ 3, 23. Defendants are
also residents of Virginia. Id. ¶¶ 4-7. At
all times relevant to the complaint's allegations,
defendant Dave Hansen was Deputy City Manager or the City
Manager for the City of Virginia Beach; defendant Thomas Gay
was the Water Resources Project Manager or Coastal Project
Manager with the Public Works Engineering Department of the
City of Virginia Beach; and defendant Philip Roehrs was a
Water Resources Engineer with the Public Works Engineering
Department of the City of Virginia Beach. Id.
¶¶ 4, 6-7. Defendant Frank Gurdziel was not an
employee of the City of Virginia Beach but was "in
charge of securing citizen approval for the Special Service
District" described in the complaint. Id.
in or around July, 2011, Defendants worked together to create
a special taxation district known as a "Special Service
District" (hereinafter, "SSD") for waterfront
property owners in the Chesopeian Colony subdivision in the
City of Virginia Beach. Compl. ¶¶ 10, 25. The
stated purpose of the proposed SSD was to fund a dredging
project that would supposedly (1) increase deep-water access
for the waterfront property owners in the SSD; (2) increase
property values for such owners; and (3) increase tax revenue
to the City of Virginia Beach as a result of the increased
property values. Id. ¶¶ 11-13. To fund the
dredging project, waterfront property owners within the SSD
would be subject to additional taxes. Id. ¶ 14.
For the proposed SSD to be approved, "80% of the
waterfront property owners in the Chesopeian Colony
[subdivision] needed to be in favor of its creation."
Id. ¶ 15.
around March, 2013, Defendants circulated "willingness
petitions" to Plaintiffs and other waterfront property
owners in the Chesopeian Colony subdivision to garner support
for the creation of the SSD. Compl. ¶ 16. In May, 2013,
"all of the waterfront property owners in the Chesopeian
Colony" voted on the proposed SSD, and fewer than 80% of
such owners approved. Id. ¶ 17. As a result, in
June, 2013, Defendants worked together to redraw the boundary
lines of the proposed SSD by "add[ing] and subtract[ing]
waterfront property owners as they saw fit for the specific
purpose of surpassing the 80% threshold." Id.
¶¶ 19, 21. By the end of June, 2013, Defendants
were successful in obtaining 80% approval of waterfront
property owners within the redrawn boundary lines of the
proposed SSD, and the SSD was created. Id. ¶
complaint alleges that, by "creat[ing] an illegal,
non-contiguous SSD without a proper public hearing, "
Defendants, "individually and collectively, deprived
Plaintiffs of their respective rights to Due Process, "
Compl. ¶ 23, and are therefore individually liable under
42 U.S.C. § 1983, id ¶ 26. The complaint further
alleges that Defendants, individually and collectively,
continue to deprive Plaintiffs of such rights because the
"dredging project is ongoing and not yet complete."
Id. ¶ 24. As a result, Plaintiffs demand $575,
174.00 in total damages, which accounts for the additional
taxes levied against them as part of the SSD plus punitive
damages, and they seek declaratory and injunctive relief in
the form of a Court order "declaring that no dredging is
to occur on or near any of Plaintiffs' property" at
their respective property addresses. Id.
¶¶ 27, 32; Id. at 8.
DEFENDANTS' MOTIONS TO DISMISS
Gurdziel's and the City Employees' Motions to
Dismiss, the Defendants assert several grounds for dismissing
Plaintiffs' complaint. ECF Nos. 3, 6. The first is that
the Court lacks subject matter jurisdiction pursuant to the
Tax Injunction Act, 28 U.S.C. § 1341, and thus must
dismiss the action pursuant to Rule 12(b)(1) of the Federal
Rules of Civil Procedure (hereinafter, "Rule
12(b)(1)"). See ECF No. 4 at 7 (relying on Burris v.
Little Rock,941 F.2d 717 (8th Cir. 1991)); ECF No. 7 at
4 (same). This threshold jurisdictional claim is now before
the Court. A. Legal Standard A defendant may challenge
subject matter jurisdiction under Rule 12(b)(1) in one of two
ways: (1) by contending that the complaint is insufficient on
its face to establish such jurisdiction or (2) by challenging
the factual predicate of subject matter jurisdiction set
forth in the complaint. Kerns v. United States, 585
F.3d 187, 192 (4th Cir. 2009) (citing Adams v. Bain,
697 F.2d 1213, 1219 (4th Cir. 1982)). In the first case, the
facts alleged in the complaint are taken as true, and the
motion must be denied if the complaint alleges sufficient
facts to invoke subject matter jurisdiction. Id. In
the second case, the plaintiff is afforded less procedural
protection: the district court need not presume the
truthfulness of the complaint and is instead "entitled
to decide disputed ...