Case Filed Against a City Ordinance Can Be Taken to a Higher Court Only After Exhaustion of Remedies Under State Law
In Key Outdoor Inc. v. City of Galesburg, 327 F.3d 549 (7th Cir. 2003), the City of Galesburg enacted an ordinance banning most of the signage in the city, but the ordinance deferred the effective date of the ban until 2009.
The plaintiffs sued in state court, alleging a regulatory taking, and Galesburg responded that the amortization period satisfied the requirement of just compensation, which is guaranteed by the federal and state constitutions. Key Outdoor, 327 F.3d at 549.
Galesburg removed the case to federal court, where all of the claims were dismissed as premature because the plaintiffs had failed to exhaust their remedies under state law. Key Outdoor, 327 F.3d at 549-50.
On appeal to the United States Seventh Circuit Court of Appeals, the plaintiffs conceded that the federal takings claim was premature.
Although the appellate court did not explicitly address the issue, the court acknowledged that Galesburg had benefitted in delaying the case by relying upon the ripeness doctrine set forth in Williamson County. Key Outdoor, 327 F.3d at 550 ("When Galesburg removed the suit to federal court, and frustrated plaintiffs' effort to invoke state remedies, it logically either surrendered the benefit of Williamson County or consented in advance to the remand of state-law theories, so that the process required by Williamson County could run its course").
The court remanded the matter to the state court for the resolution of the plaintiffs' state-law claims. Key Outdoor, 327 F.3d at 550.