The Eighth Circuit Court of Appeals has ruled that claim preclusion bars a landowner’s allegations that methane escaping from a municipal landfill reduced the value of his adjacent property without just compensation in violation of the Takings Clause. Edwards v. City of Jonesboro, No. 10-2405 (8th Cir. 7/14/11). In 1977, plaintiff purchased a 30-acre tract in Craighead County, Arkansas, with the intention of developing or selling it. Between 1999 and 2005, two prospective purchasers canceled contracts to buy the tract after environmental audits found high methane levels.

Plaintiff sued the City of Jonesboro in state court in 2005, alleging that methane gas from the city’s landfill had migrated onto his property. In addition to state tort law, statutory and constitutional claims, the complaint included a “reservation of rights” purporting to reserve all federal rights and remedies for a later lawsuit in federal court. A state trial court ordered the city to pay plaintiff the value of the land at the time of the taking as well as property taxes he had paid. The court denied plaintiff’s claim for prejudgment interest, and his appeal was rejected by the state supreme court as untimely.

In 2009, plaintiff sued the city in federal court alleging, among other things, that the city took his property without paying just compensation in violation of the Fifth and Fourteenth amendments. The district court granted the city’s motion to dismiss, ruling that the claims were barred by claim preclusion, and plaintiff appealed.

Affirming the district court, the appeals court ruled that under Arkansas case law, claim preclusion bars not only claims that were litigated but also claims that could have been litigated and are based on the same events as the litigated claims. According to the court, plaintiff could have brought his federal claim as part of the state court suit but chose not to do so. The court rejected plaintiff’s argument that he had avoided claim preclusion through the reservation of rights in the state court action, citing San Remo Hotel, L.P. v. City and County of San Francisco, 545 U.S. 323 (2005).