Wild Rice River Estates, Inc. v. City of Fargo

Wild Rice River Estates, Inc. (Wild Rice) (plaintiff) was the owner and developer of a residential subdivision along the banks of the Wild Rice River three miles south of the City of Fargo (the city) (defendant). Anton Rutten purchased Wild Rice in 1947 and had hoped to develop a subdivision on the property. In 1993 the property was platted with 38 lots. The area where Wild Rice was located was prone to flooding. In 1997, the area was so severely flooded that all the undeveloped lots in Wild Rice were submerged and underwater. After this flood, the city began working with the Federal Emergency Management Agency (FEMA) to plan for future floods. FEMA designated a preliminary floodway that encompassed several Wild Rice lots. In August of 1998, the city commission decided to place a moratorium on the issuance of all building permits for new construction within the designated preliminary floodway area until FEMA made a final determination on their flood-plain map. Wild Rice had received interest in their lots and one offer from a potential buyer but was not permitted to build on or sell any lots that were located within the designated preliminary floodway area. Before the moratorium, Wild Rice had only sold one lot. Wild Rice brought an inverse-condemnation action against the city. Approximately one month later, the city voted to lift the moratorium. Once the moratorium was lifted, Wild Rice sold five lots for much higher values than the first property it sold. The trial court held a bench trial and ruled in favor of the city and concluded that there was no taking of Wild Rice’s property. Wild Rice appealed the decision and argued that the court erred in dismissing the inverse-condemnation claim because the moratorium constituted a taking.