Opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

*

CARROLL PLAZA, LLC, *

*

Plaintiff, *

* Civ. No. MJM-25-1241

v. *

*

MAYOR AND COMMON COUNCIL *

OF WESTMINSTER, *

*

Defendant. *

*

* * * * * * * * * *

MEMORANDUM OPINION

Carroll Plaza, LLC (“Plaintiff” or the “Plaza”) filed this civil action against the Mayor and

Common Council of Westminster (“Defendant” or the “City”), alleging constitutional due process

and takings violations and a state tort claim. See ECF 1. The City filed a motion to dismiss the

Complaint or, alternatively, for summary judgment, ECF 13, the Plaza filed a response in

opposition, ECF 18, and the City filed a reply, ECF 22. The Plaza filed a motion for leave to

file surreply and to submit newly discovered evidence, ECF 23, which the City opposed, ECF 26,

and the Plaza replied, ECF 27. No hearing is necessary to resolve the pending motions. See Loc.

R. 105.6 (D. Md. 2025). For the reasons stated herein, both motions are granted, and the Complaint

is dismissed without prejudice.

I. FACTUAL BACKGROUND

Carroll Plaza, LLC is the owner of commercial retail property commonly known as the

Carroll Plaza Shopping Center, located in Carroll County, Maryland. ECF 1 (“Compl.”) ¶ 1.

Although the Plaza is adjacent to, and not within, the City of Westminster’s territorial boundaries,

the Plaza, since its inception nearly sixty years ago, has been served by a municipal public water

and sewerage utility operated by the City. Id. ¶¶ 7–8. The City also provides water services to

properties that neighbor the Plaza. Id. ¶ 8.

On or about January 31, 2023, a tenant operating a beauty salon in the Plaza vacated its

rented space, Unit R11. Id. ¶ 11. Until that tenant vacated, the City regularly provided public water

and sewer services to Unit R11 under the Plaza’s existing connections for water supply and sewage

services. Id. ¶ 12.

On or about April 5, 2024, the Plaza executed a lease with International Salon LLC

(“International”), also a beauty salon operator, to become the new tenant of Unit R11. Id. ¶ 13. On

or about May 10, 2024, International’s general contractor for its remodel of Unit R11 asked Plaza

representatives to sign certain documents for a building permit to be filed with the Carroll County

Bureau of Permits and Inspections, including a Water and Sewer Allocation Application requested

by the City. Id. ¶ 14.

To assist International, a Plaza representative contacted the City on or about May 30, 2024,

to obtain a copy of the City’s allocation application and to schedule an in-person meeting with

City staff on June 13, 2024. Id. ¶ 15. At the June 13 meeting, City staff informed the Plaza “for

the first time of the City’s purported water restrictions for the [Plaza] and its contention that no

allocation applications had been received for any of the [Plaza]’s tenants.” Id. ¶ 16. The Plaza’s

representative asked the City to provide documentation showing that it previously informed the

Plaza about its water allocation restriction. Id. ¶ 17. No documentation was provided. Id.

Also at the June 13 meeting, Mark Depo, Director of the City’s Department of Community,

Planning, and Development, advised Plaza representatives that the City would “not release the

permit for International’s buildout of Unit R11 until the Water and Sewer Allocation Application

was submitted.” Id. ¶ 18. The City requested a floor plan of the Plaza, a list of all tenants, and

square footages for all of the units, and asked that the Plaza’s tenants send or resend allocation

applications for any tenant that moved into the Plaza after 2019. Id. ¶ 19.

On or about June 28, 2024, the Plaza submitted via email a Water and Sewer Allocation

Application for Unit R11 and asked the City to advise what steps were needed to finalize the

approval of International’s building permit application. Id. ¶ 20. This email went unanswered. Id.

The Plaza requested another meeting with the City, which occurred on August 20, 2024.

Id. ¶ 21. At the August 20 meeting, Mr. Depo advised Plaza representatives that the City could not

release the permit because he would not authorize continued public water and sewer service to

Unit R11 for International, stating that “International was projected to use more water in its

operation than the prior tenant.” Id. ¶ 22. He did not provide data regarding calculations or methods

of calculation for the City’s projection. Id. Mr. Depo further advised that, because the Plaza was

not within the City’s territorial boundaries, the entire Plaza needed to be annexed into the City to

receive continued public water service to Unit R11. Id. ¶ 23.

Since the meeting on August 20, 2024, the Plaza has multiple times requested an

explanation of the City’s method of calculating International’s projected water usage and the City’s

capacity to supply that usage. Id. ¶ 24. The Plaza has received “incomplete responses.” Id. ¶ 25.

The Plaza alleges that the City is purporting to act in accordance with a “Water and Sewer

Allocations Policy,” which states that “property owners of property located outside the City limits

but inside the water service area that are eligible for annexation under State law who desire to

connect to the City’s public water system or require additional allocation must be annexed into the

City to be eligible to apply for water allocation.” Id. ¶ 30. The Plaza does not wish to be annexed

into the City, and it contends that its request for continued water service to Unit R11 is not a new

request for service. Id. ¶ 31. According to the Plaza, the City is using its “need for public water

authorization as a means of coercing an existing user of the City’s public water service, at a

location within the City’s existing water and sewer service area, to annex its commercial property

against its will into the City for purposes of obtaining additional property tax revenue from [the

Plaza].” Id. ¶ 27. The Plaza believes that being annexed into the City would amount to $70,000.00

per year in additional real estate taxes alone. Id. ¶ 28.

Due to the City’s refusal to issue a permit, International was unable to complete its remodel

of Unit R11 and has informed the Plaza that it wishes to terminate its lease. Id. ¶ 33. The Plaza has

other vacant spaces that it is working to fill with tenants. Id. ¶ 35. The Plaza complains that the

ongoing water usage controversy will have a chilling effect on prospective tenants interested in

occupying the vacant spaces. Id.

II. STANDARD OF REVIEW

A motion to dismiss under Federal Rules of Civil Procedure Rule 12(b)(6) tests the

sufficiency of a civil complaint. “To survive a Rule 12(b)(6) motion, a complaint must satisfy the

pleading standard articulated in [Rule] 8(a)(2), which requires a ‘short and plain statement of the

claim showing that the pleader is entitled to relief.’” View Point Med. Sys., LLC v. Athena Health,

Inc., 9 F. Supp. 3d 588, 596 (D. Md. 2014) (citation omitted). A plaintiff must plead enough factual

allegations “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiffs pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Ordinarily, a court “is not to consider matters outside the pleadings or resolve factual

disputes when ruling on a motion to dismiss.”1 Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450

(4th Cir. 2007). When a movant files a motion to dismiss seeking summary judgment as alternative

relief and presents matters outside the pleadings, Rule 12(d) permits the court to consider those

matters and treat the motion “as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d).

Generally, converting a motion to dismiss to a summary judgment motion is not

appropriate “where the parties have not had an opportunity for reasonable discovery.” E.I. du Pont

de Nemours v. Kolon Indus., Inc., 637 F3d 435, 448–49 (4th Cir. 2011). At the same time, the

party opposing summary judgment “cannot complain that summary judgment was granted without

discovery unless that party had made an attempt to oppose the motion on the grounds that more

time was needed for discovery.” Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244

(4th Cir. 2002) (quoting Evans v. Technologies Applications & Service Co., 80 F.3d 954, 961 (4th

Cir. 1996)). To assert a need for discovery to oppose a summary judgment motion, a non-movant

is generally required to file an “affidavit or declaration,” pursuant to Rule 56(d), stating that “it

cannot present facts essential to justify its opposition[]” to the motion the merits. Fed. R. Civ. P.

56(d); see also Shaw v. Foreman, 59 F.4th 121, 128 (4th Cir. 2023). Even without such an affidavit,

however, a district court may not grant summary judgment “when it otherwise has ‘fair notice of .

. . potential dispute[s] as to the sufficiency of the summary judgment record.’” Id. (citation

omitted).

1 When ruling on a Rule 12(b)(6) motion, a court may “consider documents that are explicitly

incorporated into the complaint by reference” or “document[s] submitted by the movant” that are “integral

to the complaint[,]” if “there is no dispute about the document’s authenticity.” Goines v. Valley Cmty. Servs.

Bd., 822 F.3d 159, 165–66 (4th Cir. 2016) (citations omitted); accord Zak v. Chelsea Therapeutics Int’l,

Ltd., 780 F.3d 597, 606–07 (4th Cir. 2015).

Here, the City styled its motion to dismiss, in the alternative, as one for summary judgment,

ECF 13, placing the Plaza on notice that the motion may be decided under Rule 56, see Laughlin

v. Metro Washington Airports Auth., 149 F.3d 253, 261 (4th Cir. 1998). In response, the Plaza filed

a Rule 56(d) affidavit asserting a need for discovery on a number of factual issues. See ECF 18-4

(Declaration of William S. Zahler). The Plaza states that it “disputes several of the City’s factual

assertions but lacks the facts necessary to oppose summary judgment due to the City’s purposeful

nondisclosure of documents and failure to be forthcoming regarding its determinations.” ECF 18

at 23. The City disagrees that discovery is necessary, largely citing the 16 exhibits it has provided,

half of which contain communications between the parties. See ECF 22 at 1–7. Upon consideration

of the parties’ submissions, the Court is persuaded that the Plaza has articulated its need for an

opportunity to conduct discovery and finds that it would be improper to treat the City’s motion as

one for summary judgment at this stage of the case. Accordingly, the Court declines to consider

any matters outside the Complaint and will decide the City’s motion under a Rule 12(b)(6)

standard.

III. ANALYSIS

A. Constitutional Claims (Counts I through IV)

Counts I, II, and III of the Complaint assert claims for monetary, injunctive, and declaratory

relief under 42 U.S.C. § 1983 and 28 U.S.C. § 2201 for alleged violations of the Due Process

Clause and the Takings Clause of the Fifth Amendment and the Fourteenth Amendment to the

U.S. Constitution, and Count IV seeks inverse condemnation based on the alleged Takings Clause

violation. The Court will address, first, Plaintiff’s due process claims and then turn to its takings

claims. For the reasons explained below, each of Plaintiff’s constitutional claims is subject to

dismissal.

1. Due Process

Neither 42 U.S.C. § 1983 nor 28 U.S.C. § 2201 is a source of substantive rights; these

statutes are only remedial, each providing a method for vindicating substantive rights conferred by

other federal laws. See Brunson v. Stein, 116 F.4th 301, 308 (4th Cir. 2024), cert. denied, 145 S.

Ct. 1169, 221 L. Ed. 2d 251 (2025); CGM, LLC v. BellSouth Telecommunications, Inc., 664 F.3d

46, 55–56 (4th Cir. 2011). “To state a claim under § 1983, a plaintiff must allege (1) that a right

secured by the Constitution or laws of the United States was violated, and (2) that the alleged

violation was committed by a ‘person acting under the color of state law.’” See Gaines v. Baltimore

Police Dep’t, 657 F. Supp. 3d 708, 748 (D. Md. 2023) (citations omitted). Under 28 U.S.C. § 2201,

“upon the filing of an appropriate pleading” articulating an “actual controversy,” a federal court

may “declare the rights and other legal relations” of a party in a civil action and determine whether

further relief could be sought. 28 U.S.C. § 2201(a).

The Plaza alleges that the City violated substantive rights to procedural and substantive

due process conferred by the Due Process Clause of the Fourteenth Amendment. To succeed on a

due process claim, whether procedural or substantive, “a [plaintiff] must first show that it had a

constitutional property interest and that the state deprived it of that interest.” Pulte Home Corp. v.

Montgomery Cnty., Maryland, 909 F.3d 685, 691–92 (4th Cir. 2018) (quoting Quinn v. Bd. of Cty.

Comm’rs, 862 F.3d 433, 443 (4th Cir. 2017)). The plaintiff bears the burden to show a protectable

property interest. See Herman v. Lackey, 309 F. App’x 778, 783 (4th Cir. 2009) (unpublished)

(citing Bd. of Regents v. Roth, 408 U.S. 564, 579 (1972)).

A plaintiff has a constitutionally cognizable property interest only if it has a “legitimate

claim of entitlement,” rather than a mere “abstract need or desire” or “unilateral expectation.”

Town of Castle Rock v. Gonzalez, 545 U.S. 748, 756 (2005) (internal quotation marks and citation

omitted). “Entitlements subject to due process protections are not created by the Fourteenth

Amendment, but arise from and are defined by independent sources, including state law.” Pulte

Home Corp., 909 F.3d at 692. The Fourth Circuit has recognized that “a legitimate claim of

entitlement to a permit or approval turns on whether, under state and municipal law, the local

agency lacks all discretion to deny issuance of the permit or to withhold its approval. Any

significant discretion conferred upon the local agency defeats the claim of a property interest.”

Gardner v. City of Baltimore Mayor & City Council, 969 F.2d 63, 68 (4th Cir. 1992); see also id.

at 69 (explaining that “this standard appropriately balances the need for local autonomy in a matter

of paramount local concern with recognition of constitutional protection at the very outer margins

of municipal behavior,” and recognizing that the Fourteenth Amendment’s Due Process Clause

“does not function as a general overseer of arbitrariness in state and local land-use decisions”),

cited with approval in Md. Reclamation Assocs., Inc. v. Harford Cnty., 677 A.2d 567, 579 (Md.

1996).

Plaintiff identifies what it contends are two property interests at stake in support of its due

process claims: (1) continued receipt of water services; and (2) business and livelihood. The Court

will address these claims in turn.

a. Property Interest in Continued Receipt of Water Services

The City argues that the Plaza’s due process claims fail because the Plaza lacks a

cognizable property interest. See ECF 22 at 9. The Plaza responds that once the City extended

water service beyond its territorial boundaries to the Plaza, it assumed a duty to continue providing

that service, and the Plaza acquired a property interest in the City’s provision of water service,

which the City may not terminate for coercive annexation purposes. ECF 18 at 12. But, according

to the City, the Plaza has no inherent constitutional right to access the City’s water, and it lacks a

“legitimate entitlement” to an approval of its Water and Sewer Allocation Application on behalf

of International because the City retains significant discretion under its Water and Sewer

Allocation Policy. See id. at 9–10.

The Court is unpersuaded by the Plaza’s argument that it has a constitutionally cognizable

interest in the continued receipt of water service from the City. Courts have recognized that

“Maryland law does not create any constitutional right to water or sewer service.” Pulte Home

Corp., 909 F.3d at 692; accord Neifert v. Dept. of Env., 910 A.2d 1100, 1122 (Md. 2006) (holding

that property owners’ “right to receive sewer service is not a right created or established by either

the United States or Maryland Constitution”); Quinn v. Bd. of Cnty. Commissioners for Queen

Anne’s Cnty., Maryland, 862 F.3d 433, 439 (4th Cir. 2017) (“Quinn’s Takings Clause claim based

on his lack of sewer service fails because he never had a property interest in obtaining that

service.”). In claiming a property interest in water service, the Plaza overstates Maryland law and

ignores Fourth Circuit precedent.

First, the Plaza cites Carter v. Suburban Water Co., 101 A. 771, 772 (Md. 1917), for the

proposition that because water is a “prime necessity of life,” a municipality may not arbitrarily

shut off service when a bill is subject to a “just dispute.” In Carter, a landlord who owned 71 rental

houses—each dependent on a single water utility with no alternative source—disputed a $291 bill,

claiming he was entitled to offset losses caused by the company’s prior inadequate service. Id. at

771. Although he offered to pay the amount properly owed, the company refused to negotiate and

threatened to terminate service unless the full bill was paid. Id. Carter obtained an injunction,

which the trial court later dissolved on the grounds that he had an adequate remedy at law

(damages). Id. The Supreme Court of Maryland (then-named the Court of Appeals) reversed,

holding that while a water company may shut off service for nonpayment of valid charges, it may

not use that power to coerce payment of a bill disputed in good faith. Id. at 772. Because water is

a “prime necessity,” terminating service would cause immediate and serious harm, justifying

injunctive relief. Id.

Carter does not support the Plaza’s position. Carter, unlike this case, involved whether

equitable relief was available to a landlord of residential homes entangled in a good faith billing

dispute with his water utility provider. Here, the dispute concerns the conditions of commercial

water access imposed by a municipal government on a non-municipal property owner. Carter

simply does not speak to the issues presented here.

Next, the Plaza cites Mayor & Council of Rockville v. Goldberg, 264 A.2d 113 (Md. 1970),

to argue it is “axiomatic” under Maryland law that a municipal utility must furnish water “without

discrimination and at reasonable rates” when the requested service is within the reasonable reach

of its system. In Goldberg, the owner of 5.9 acres of unincorporated land blocked Rockville’s

attempt to annex his property and then obtained a writ of mandamus compelling the City to extend

sewer and water service to the property outside the City limits. Id. at 113. The Court of Appeals

reversed. While reaffirming that a public utility has a duty to serve those within its service area,

Maryland’s high court clarified that “a city cannot be compelled to supply water to anyone outside

its limits,” even if it provides limited extraterritorial service by special contract, unless it has placed

itself in the position of serving that broader area as a public utility. Id. at 117 (citing Cumberland

v. Powles, 258 A.2d 410 (Md. 1969)). Because Goldberg’s property—though near existing lines—

was not located in an area the City of Rockville was already serving, he could not compel the City

to extend service. Id. at 117–18; see also Spring v. Bradley, 733 A.2d 1038, 1043 (Md. 1999)

(applying Goldberg and holding that although the Town of Oxford provided water and sewer

service to some properties outside its limits through “special” extensions, it had not held itself out

as a public utility for the surrounding area and therefore could not be compelled to extend service

to the plaintiff’s nearby property).

Goldberg also fails to support the Plaza’s claim to a cognizable property interest. While

Goldberg did concern a public utility’s relationship with non-residents, the question there was

when a municipality could be compelled to serve non-residents, which largely turns on how the

municipality “has treated other properties outside its borders[.]” See Spring, 733 A.2d at 1040.

Here, there is no dispute that the City provided the Plaza services in the past and that it is willing

to do so in the future. The question here, therefore, is not about access to public utility services,

but whether the Plaza has a property interest in the continued conditions under which the City

provides that access. Goldberg does not answer that question. And, as noted supra, courts have

routinely recognized that “Maryland law does not create any constitutional right to water or sewer

service.” Pulte Home Corp., 909 F.3d at 692; accord Neifert, 910 A.2d at 1122; Quinn, 862 F.3d

at 439.

The Plaza claims that Maryland law is “no different” than the relevant Tennessee law at

issue in Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 17 (1978), where the Supreme

Court held that a public utility customer had a property interest in continued service, and the Due

Process Clause required notice and “some administrative procedure … to afford reasonable

assurance against erroneous or arbitrary withholding of essential services.” Not so. In Memphis

Light, the Court determined that residential property owners had a cognizable property interest in

continued water service because Tennessee law provided that the public utility could terminate

service only “for cause,” which gave rise to a “‘legitimate claim of entitlement’ within the

protection of the Due Process Clause.” Id. at 11–12; cf. Southside Tr. v. Town of Fuquay-Varina,

69 Fed. Appx. 136, 138 (4th Cir. 2003) (holding that because, under state law, the municipality

was permitted to terminate sewer service to non-residents at will, its breach of its contract with

plaintiff was not protected by the Due Process Clause). Here, the Plaza does not plead any facts or

cite any law to establish that it had a legitimate entitlement or that the City lacked discretion to set

conditions upon its provision of water service. Cf. Maryland Reclamation Associates, 677 A.2d at

579 (“Clearly, a local government does not lack ‘all discretion’ with regard to the enactment of

new land-use ordinances.” (citing Gardner, 969 F.2d at 68)). Accordingly, Memphis Light is

distinguishable.

In sum, the authorities cited by the Plaza do not demonstrate that it was vested with a

property interest in, or legitimate entitlement to, the continued receipt of water service from the

City under the same conditions it enjoyed in the past. Instead, the Plaza’s arguments amount to

claiming a “abstract need or desire” or “unilateral expectation” that it would continue to receive

water service from the City under past conditions. Castle Rock, 545 U.S. at 756. Thus, this

expectation does not give rise to a constitutionally cognizable property interest.2

b. Business and Livelihood

Next, the Plaza claims that, apart from its interest in the continued receipt of water services,

it has a “separate and distinct constitutionally protected property interest in the business and

livelihood it generates from the [Plaza] which is dependent on the City’s continued provision of

water services.” ECF 18 at 12. This argument also fails.

2 The Plaza questions “whether the City’s Policy is truly motivated by an alleged water shortage,

or rather, by a desire by the City to compel extraterritorial users of its water utility to annex into the City so

as to create new property tax revenue streams for the City.” See ECF 18 at 17. It is not clear what the Plaza

believes is the import of its observation. Without taking a position on what the City’s “true” motivation

was, raising revenue is a legitimate legislative purpose. See U.S. v. Carlton, 512 U.S. 26, 40 (1994) (citing

U.S. Const., Art. I, § 8, cl. 1) (Scalia, J., concurring).

The Plaza relies on Johnson v. City of Saginaw, Michigan, 980 F.3d 497 (6th Cir. 2020).

There, after a gang-related gunfight occurred outside plaintiff Rita Johnson’s restaurant while it

was being rented for a birthday party, the City of Saginaw suspended water service to the building

to prevent further events. Id. at 502. Johnson sued under 42 U.S.C. § 1983, alleging violations of

her procedural and substantive due process rights. Id. at 502–05. The Sixth Circuit affirmed the

district court’s conclusion that the City violated Johnson’s procedural due process rights by failing

to provide adequate pre-deprivation process and violated her substantive due process rights

through arbitrary state action. Id. at 508–11.

In addressing Johnson’s property interest, the court stated that “[t]here can be no dispute

that Johnson was deprived of a property interest,” explaining that “[t]he Supreme Court has held

repeatedly that the property interest in a person’s means of livelihood is one of the most significant

that an individual can possess.” Id. at 510 (quoting Ramsey v. Bd. of Educ. of Whitley Cnty., 844

F.2d 1268, 1273 (6th Cir. 1988) (citing Cleveland Board of Education v. Loudermill, 470 U.S.

532, 543 (1985))). The court also observed that consumers who rely on utility services become

dependent on those services for a “prime necessity of business, comfort, health, and even life.” Id.

(quoting Palmer v. Columbia Gas of Ohio, Inc., 479 F.2d 153, 163–64 (6th Cir. 1973)). It further

stated that an expectation of utility services may rise to the level of a “legitimate claim of

entitlement” protected by the Due Process Clause. Id. at 512 (quoting Mansfield Apartment

Owners Ass’n v. City of Mansfield, 988 F.2d 1469, 1474 (6th Cir. 1993)).

The Plaza cites no controlling authority recognizing a property interest in a business’s

“livelihood” based on continued municipal utility service. The Sixth Circuit’s decision is not

binding on this Court. And, with respect, this Court does not find the reasoning in Johnson

persuasive. The statement in Ramsey—on which Johnson relies—recognizing a property interest

in an individual’s “means of livelihood” cites Cleveland Board of Education v. Loudermill, 470

U.S. 532 (1985). But Loudermill concerned a public employee who was terminated without an

opportunity to respond to allegations that he had falsified his job application. Id. at 535. The

Supreme Court held that the employee had a protected property interest because Ohio law entitled

covered civil service employees to retain their positions “during good behavior” and allowed

dismissal only for specified causes. Id. at 539. In other words, the property interest arose from state

law, which “plainly create[d]” an entitlement to continued employment. Id. Plaintiff here does not

identify any state law that similarly creates for it an entitlement against any interruption in a

commercial entity’s “business and livelihood.” ECF 18 at 12.

Although the Loudermill Court later acknowledged the “severity of depriving a person of

the means of livelihood,” id. at 543, that observation was made during step one of the three-factor

Mathews v. Eldridge balancing analysis, which considers the “private interest” at stake only after

a protected liberty or property interest has been established. See Mathews v. Eldridge, 424 U.S.

319, 335 (1976) (identifying three factors the “bear[] upon the constitutional adequacy of [given]

procedures[,]” including, first, “the private interest that will be affected by the official action”);

Elhady v. Kable, 993 F.3d 208, 228 (4th Cir. 2021) (stating that the court “need not address

plaintiffs’ claims as to the adequacy of existing processes[]” when plaintiffs fail to demonstrate

infringement of constitutional interests); Accident, Inj. & Rehab., PC v. Azar, 943 F.3d 195, 203

(4th Cir. 2019) (recognizing that “[t]o prevail on a procedural due process claim,” a plaintiff must

show deprivation of “a cognizable liberty or property interest;” and “that the procedures employed

were constitutionally inadequate[;]’” and applying the three-factor Mathews inquiry “[t]o assess

the constitutional adequacy” of given procedures); Bradley v. Colonial Mental Health &

Retardation Servs. Bd., 856 F.2d 703, 707, 709 (4th Cir. 1988) (finding a public employee had a

legitimate claim of entitlement to continued employment based on the employer’s personnel

manual and then applying the Mathews balancing test to determine whether due process was

satisfied). Loudermill does not establish that a commercial entity’s general interest in its “business

and livelihood,” standing alone, constitutes a property interest protected under the Due Process

Clause.

Ultimately, the Plaza does not cite any binding authority to support the notion that it had a

protected property interest in, or a legitimate claim of entitlement to, continued water services

provided by a municipality based on commercial interests or business necessity. Cf. Bartoszewski

v. Town of Hannibal, No. 5:09-CV-1453, 2012 WL 3822014, at *3 n.7 (N.D.N.Y. Sept. 4, 2012)

(“[T]he Court finds that Plaintiffs have not identified any legitimate property interest in their

commercial access to municipal water for procedural due process purposes.”); Johnson, 980 F.3d

at 518 (“Even as access to utilities constitutes an essential resource, Johnson alleges a commercial

interest in the water, not a residential interest.”) (Sutton, J., concurring).3

In sum, Counts I through III of the Plaza’s Complaint depend on the existence of a

sufficiently pled constitutional violation. For the reasons discussed above, the Plaza cannot state a

claim that the City violated its procedural and substantive due process rights because it cannot

show first show that it had a constitutionally cognizable property interest at risk of deprivation.

Therefore, Counts I through III must be dismissed.

3 It is also notable that the defendants in Johnson “conceded that Johnson had a ‘constitutionally

protected property interest’ in ‘water service to [her] business.” See Johnson, 980 F.3d at 512 n.8; see also

id. at 517 (“The parties agree that Johnson has a protected interest in the water.”) (Sutton, J., concurring).

The corresponding issue in the instant case is contested.

2. Takings

In addition to seeking damages and injunctive relief for alleged Fourteenth Amendment

due process violations, Count I seeks the same form of relief for the City’s alleged violation of the

Takings Clause of the Fifth Amendment, and, in Count IV, the Plaza seeks inverse condemnation

for the alleged Takings Claus violation. A property own may bring “an ‘inverse condemnation’

action for just compensation[]” when “a government takes property without condemnation

proceedings or just compensation[.]” D.A. Realestate Inv., LLC v. City of Norfolk, 126 F.4th 309,

316 (4th Cir. 2025) (emphasis removed). The Plaza’s Fifth Amendment claims in Counts I and

IV—that the City deprived it of private property without just compensation—fail for the same

reason as its due process claims: the Plaza does not plead a constitutionally cognizable property

interest.4

“The Takings Clause of the Fifth Amendment prohibits the taking of private property

without just compensation.” Putle Home Corp., 909 F.3d at 695 (citing Lingle v. Chevron U.S.A.,

Inc., 544 U.S. 528, 536 (2005)). Like the Due Process Clause, the Takings Clause protects property

interests—it does not create it. See Washlefske v. Winston, 234 F.3d 179, 183 (4th Cir. 2000) (citing

Phillips v. Washington Leg. Found., 524 U.S. 156, 164 (1998)). Accordingly, the analysis

“necessarily begins” with determining whether the government’s action interfered with property

rights. Sunrise Corp. of Myrtle Beach v. City of Myrtle Beach, 420 F.3d 322, 330 (4th Cir. 2005).

Property rights are “determined by reference to ‘existing rules or understandings that stem from

an independent source such as state law.’” Quinn, 862 F.3d at 439 (citing Phillips v. Wash. Legal

4 “Article III, Section 40 of the Maryland Constitution contains a provision that parallels the Fifth

Amendment Takings Clause … and is interpreted in pari materia with the federal provision.” McLamb v.

City of Mt. Rainier, Civ. No. DKC 23-3365, 2024 WL 4108570, at *10 (D. Md. Sept. 6, 2024) (citing Litz

v. Md. Dep’t of Env’t, 131 A.3d 923, 930 (D. Md. 2016)). Plaintiff does not argue here that these two

constitutional provisions should be interpreted differently. See ECF 18 at 20 n.2. Accordingly, the above

analysis applies equally to both.

Found., 524 U.S. 156, 164 (1998) (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564,

577 (1972))). “The property owner must show more than a mere hope or expectation; ‘he must,

instead, have a legitimate claim of entitlement.’” Id. (quoting Roth, 408 U.S. at 577 (cleaned up)).

If no property rights are interfered with, there is no taking. See Quinn, 862 F.3d at 439; Sunrise

Corp. of Myrtle Beach, 420 F.3d at 330. The Plaza does not raise any new argument with respect

to its property interest in the takings context that it didn’t already make in support of its due process

claims, which have all been rejected, above. Instead, the Plaza argues that “[d]ue to the water

restrictions imposed by the Policy, Carroll Plaza will be restricted in its ability to offer its space

for lease to potential retail tenants; and in fact, it has already lost one tenant, International, due to

the City’s Policy.” ECF 18 at 19. That may be so. But the Plaza has not shown the City’s action

interfered with its property rights, so its Takings Clause claims fail. See supra. Therefore, the

Plaza’s Fifth Amendment takings claims in Counts I and IV must be dismissed.

B. Tortious Interference (Count V)

In Count V of the Complaint, the Plaza asserts a claim for tortious interference with

economic relations under Maryland law. The Plaza argues that the City, acting in a “proprietary”

capacity, is “intentionally and willfully enforcing its unconstitutional water allocation (and

annexation) Policy against Carroll Plaza” and thereby committing tortious interference with the

Plaza’s economic relations. ECF 18 at 20–22; see also Compl. ¶¶ 55–62 (Count V). The City

responds that the Plaza fails to state a tortious interference claim and, in any event, that the City is

entitled to governmental immunity. See ECF 13-1 at 29–31. The Court agrees that the tortious

interference claim is barred by governmental immunity.

“Maryland law is well settled that a county (or municipality) generally enjoys immunity

against common law tort liability arising out of acts that are governmental, as opposed to acts that

are private or proprietary.” Clark v. Prince George’s Cnty., 65 A.3d 785, 790 (Md. App. Ct. 2013)

(citing DiPino v. Davis, 729 A.2d 354 (Md. 1999)). Although there is no bright-line rule, whether

an entity acts in a governmental or proprietary capacity typically turns on whether the activity is

intended to “promote the welfare of the whole public” and is devoid of any “private interest.”

Truant v. Persuhn, Civ. No. RDB-23-00579, 2023 WL 8600552, at *11 (D. Md. Dec. 12, 2023)

(quoting Austin v. City of Baltimore, 286 Md. 51, 53, 65, 405 A.2d 255 (1979)). Whether the act

at issue is “sanctioned by legislative authority” is also relevant. E. Eyring & Sons Co. v. City of

Baltimore, 252 A.2d 824, 825 (Md. 1969).

Here, there is no dispute that the Mayor and Common Council of Westminster is a

municipality generally immune from tort liability under Maryland law. See Local Government,

MARYLAND STATE ARCHIVES, https://perma.cc/QV5E-C44L (last visited March 30, 2026) (listing

Westminster as a municipality of Carroll County). Nor is there any dispute that the Plaza’s tort

claim challenges the City’s legislatively enacted Water and Sewer Allocation Policy. Although the

Plaza questions the City’s rationale for the policy—including its stated historical water scarcity—

it argues that the City’s actions are “undeniably proprietary” because the dispute concerns

“extraterritorial water supply,” which Maryland courts have sometimes described as “proprietary.”

ECF 18 at 21–22 (citing Bair v. Mayor & City Council of Westminster, 221 A.2d 643 (Md. 1966)).

The Plaza misunderstands the import of Bair. There, landowners whose property was just

outside Westminster sought to compel the city to provide water service. Bair, 221 A.2d at 644.

The case did not involve a tort claim and therefore did not address governmental immunity.

Although the court used the term “proprietary” while discussing a municipality’s water service

obligations, id. at 645, the rule that emerged from Bair, as later clarified in Goldberg, is that “a

city cannot be compelled to supply water to anyone outside its limits,” even if it provides limited

extraterritorial service by special contract, unless it has placed itself in the position of serving the

broader area as a public utility. See Goldberg, 264 A.2d at 117. The Court of Appeals later noted

in Spring that Bair also supports the corollary rule that “when a municipality has undertaken to

supply water” to a defined area outside its limits, it must do so impartially and may not “pick and

choose” among similarly situated consumers. Spring, 733 A.2d at 1042 (citation omitted)

(emphasis in original).

In short, Bair addressed when a municipality may be compelled to provide water service;

it did not involve a tort claim based on a legislative enactment or governmental immunity. The

Plaza’s reliance on Bair, therefore, is misplaced. The Plaza fails to establish that the City’s conduct

here was proprietary for governmental tort immunity purposes. Rather, the conduct challenged

here—the adoption and enforcement of a legislatively enacted water and sewer allocation policy—

is a governmental function undertaken for a public purpose. Because the Plaza’s tortious

interference claim arises from that governmental action, the City is entitled to governmental

immunity. Accordingly, Count V must be dismissed.

IV. CONCLUSION

For the foregoing reasons, Defendant’s motion to dismiss (ECF 13) is granted, Plaintiff’s

motion for leave to file a surreply (ECF 23) is granted, and the Complaint is dismissed without

prejudice. The Clerk shall close the case.

A separate Order will issue.

3/31/26 _________________________________

Date Matthew J. Maddox

United States District Judge