Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-3_06-cv-00063/USCOURTS-ared-3_06-cv-00063-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Other Civil Rights

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IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

JONESBORO DIVISION

TWO TENNESSEE, LLC, and PLAINTIFFS

RAZORBACK CONCRETE COMPANY

v. No. 3:06CV00063 JLH

CITY OF NORTH LITTLE ROCK, ARKANSAS;

MARTIN GIPSON, CHARLIE HIGHT, GARY

BERRY, and NEIL BRYANT, in Their Official

Capacities and as Members of the City Council of

North Little Rock, Arkansas, and Individually DEFENDANTS

OPINION AND ORDER

The complaint in this case alleges that the North Little Rock City Council refused to correct

an erroneous zoning designation for property that Razorback Concrete Company sought to purchase

and Two Tennessee, LLC, ultimately purchased; and, by that refusal, the defendants impaired a

contractual obligation in violation of the Constitution, took property without paying just

compensation, deprived the plaintiffs of equal protection of the laws, and violated the plaintiffs’ right

to substantive due process. The defendants now move to dismiss the complaint pursuant to

Rule 12(b)(6) of the Federal Rules of Civil Procedure.

In ruling on a Rule 12(b)(6) motion to dismiss, the court construes the complaint in the light

most favorable to the plaintiff and accepts the allegations in the complaint as true. Coleman v. Watt,

40 F.3d 255, 258 (8th Cir. 1994). A motion to dismiss should not be granted merely because the

complaint “does not state with precision all elements that give rise to a legal basis for recovery.”

Schmedding v. Tnemec Co., Inc., 187 F.3d 862, 864 (8th Cir. 1999). A complaint need only contain

“‘a short and plain statement of the claim showing that the pleader is entitled to relief.’” Id. (quoting

FED.R.CIV. P. 8(a)). “‘[A]s a practical matter, dismissal under Rule 12(b)(6) is likely to be granted

only in the unusual case in which a plaintiff includes allegations that show on the face of the

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complaint that there is some insuperable bar to relief.’” Gebhardt v. ConAgra Foods, Inc., 335 F.3d

824, 829 (8th Cir. 2003) (quoting Parnes v. Gateway 2000, Inc., 122 F.3d 539, 546 (8th Cir.1997)).

In other words, a motion to dismiss should be granted only if “it appears beyond a doubt that the

plaintiff can prove no set of facts which would entitle him to relief.” Schmedding, 187 F.3d at 864.

The complaint alleges that Razorback Concrete, an Arkansas corporation with its principal

place of business in West Memphis, Arkansas, sought to purchase a parcel of land in North Little

Rock known as the Tullos property for use as a concrete plant; and that Two Tennessee, a Tennessee

limited liability company with its principal place of business in Memphis, Tennessee, ultimately

purchased the property.

According to the complaint, in 1985, before the property had been put to any significant use,

the city council zoned the property R4/Conservation (residential). In 1997, the city council rezoned

the property I-2 (industrial) in response to the owner’s objections to the property’s residential zoning.

In 2005, the city council adopted a zoning ordinance (“Ordinance #7697”) that amended the zoning

rules and established a digital zoning map for general use. The map, as adopted, mistakenly showed

the Tullos property to be zoned as R4/Conservation rather than I-2. Noting the error and the

potential for litigation because that the property was under contract for sale, the city attorney

recommended that the city council correct the designation. The complaint alleges that Eugene

Pfeifer spoke out against the proposed corrective legislation at a city council meeting, allegedly

arguing that North Little Rock residents did not want a West Memphis business operating at that

location and urging the city council “to vote against plaintiffs because they were ‘outsiders.’” The

defendants refused to correct the error in the zoning map. Razorback Concrete and Two Tennessee

allege that the decision not to correct the error had no legal or rational basis, was made with the

intent to deprive them of their rights, and was motivated by ill will, spite, and malice towards them

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because they were not natives of North Little Rock and by an unlawful desire to benefit Pfeifer, who

also sought to purchase the property.

The defendants argue that the complaint fails to state a claim under the Contracts Clause, the

Takings Clause, the Due Process Clause, or the Equal Protection Clause of the United States

Constitution. They further assert that the complaint gives no notice of any state-law claim and that

the individual defendants are entitled to legislative immunity from suit in their individual capacities.

Contracts Clause

Article I, § 10 of the Constitution of the United States provides, “No State shall . . . pass any

. . . Law impairing the Obligation of Contracts . . . .” When analyzing a claim under the Contracts

Clause, courts “first ask whether the change in state law has operated as a substantial impairment of

a contractual relationship.” Gen. Motors Corp. v. Romein, 503 U.S. 181, 186, 112 S. Ct. 1105, 1109,

117 L. Ed. 2d 328 (1992) (quotations and citation omitted). “This inquiry has three components:

whether there is a contractual relationship, whether a change in law impairs that contractual

relationship, and whether the impairment is substantial.” Id.

The defendants argue that Razorback Concrete and Two Tennessee fail on the second prong

of the analysis because (1) the action of which they complain is not a change in the law and (2) it

does not impair their contractual relationship in that it does not act on any contract itself. That

argument is correct. The city council did not impair a contractual obligation. To impair a

contractual obligation within the meaning of the Contracts Clause, “the challenged law must act on

the contract itself as distinguished from the property which is the subject of the contract.” Metro.

St. Louis Sewer Dist. v. Ruckelshaus, 590 F. Supp. 385, 389 (E.D. Mo.1984). See also Quality

Refrigerated Servs., Inc. v. City of Spencer, 908 F. Supp. 1471, 1492 (N.D. Iowa 1995); Bannum,

Inc. v. City of St. Charles, Mo., No. 90-0667-C(4), 1992 WL 521779, *4 (E.D. Mo. Oct. 15, 1992),

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aff’d, 2 F.3d 267 (8th Cir. 1993) (citations omitted). Modification of the contract itself, for example,

an alteration of an express term of or obligation under a contract, constitutes an impairment, whereas

an indirect or incidental effect upon the subject of a contract does not. See Northwestern Nat’l Life

Ins. Co. v. Tahoe Reg’l Planning Agency, 632 F.2d 104 (9th Cir. 1980).

The defendants cite Quality Refrigerated in support of their argument. In that case, the

plaintiff entered into a written agreement with the city for acquisition and development of an

industrial facility for use as a refrigerated warehouse and processing plant. Quality Refrigerated, 908

F. Supp. at 1478. At the time of the agreement, the property was located in an area zoned “heavy

industrial,” which allowed for all of the facility’s intended uses. Id. After some time, the city

changed the zoning designation to “highway commercial,” which affected one of the uses for which

the plaintiff was to lease its facility. Id. at 1479. The plaintiff applied for rezoning and the city

denied the application. Id. Concerning a proposed contracts clause claim, the court held:

The zoning regulation in this matter did not alter the terms of the contract between

Quality Refrigerated and the City of Spencer, but simply affected the uses which

could be made of the Spencer Pack facilities. Thus, the zoning regulation’s only

effect is on the property which is the subject matter of the contract. . . . [T]he City of

Spencer’s actions may have made performance of the contract less profitable and less

likely, but this gives rise only to an action between the parties for breach of contract

– not a constitutional claim. Thus, the court concludes that Defendants have not

substantially impaired an extant contract with Quality Refrigerated.

Id. at 1493.

In a similar case, a plaintiff who had received a federal contract to operate a community

corrections center in the city alleged that the city unlawfully denied zoning to allow that use.

Bannum, 1992 WL 521779, at *1. The court held that, insofar as the complaint alleged a violation

of the Contracts Clause, it failed to state a claim because “[t]he zoning ordinance acted solely on the

property, not on the terms of the contract . . . .” Id. at *4.

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Razorback Concrete and Two Tennessee cite no authority that shows that the facts they have

alleged, if true, would constitute a violation of the Contracts Clause. Here, as in Quality

Refrigerated and Bannum, the defendants’ action (or inaction) had no effect on contractual

obligations that the plaintiffs had towards another person or vice versa; it had no direct effect on the

contractual obligations between Razorback Concrete and the seller, assuming they had a contract,

nor on the contractual obligations between Two Tennessee and the seller. The unchanged zoning

designation restricted the use of the property but did not impair the obligation of a contract. The

complaint fails to state a claim “showing that the pleader is entitled to relief” on the Contracts Clause

claim as required by Rule 8(a).

For these reasons, the motion to dismiss the Contracts Clause claim is granted. The

Contracts Clause claim is dismissed without prejudice.

Equal Protection

The Fourteenth Amendment provides that no state shall deny to any person “equal protection

of the laws.” U.S. CONST. amend. XIV, §1. The Supreme Court has recognized that an equal

protection claim may be alleged by a “class of one” where the complaint alleges that the plaintiff was

intentionally treated differently from others similarly situated and no rational basis existed for the

different treatment. Village of Willowbrook v. Olech, 528 U.S. 562, 120 S. Ct. 1073, 145 L. Ed. 2d

1060 (2000) (that village demanded more of the plaintiff than of similarly situated property owners

could constitute an equal protection violation since it was alleged that demand was “irrational and

wholly arbitrary”).

The defendants argue that Razorback Concrete and Two Tennessee do not allege that the

defendants treated similarly situated persons more favorably. They contend that, because Razorback

Concrete and Two Tennessee fail to allege that other concrete companies were treated more

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favorably with regard to zoning, the claim fails. 

Because the present motion is a motion to dismiss under Rule 12(b)(6), whether Razorback

Concrete and Two Tennessee can prove that they have been denied equal protection of the laws is

not for the court to say: the inquiry focuses solely on the complaint. The complaint alleges that

Razorback Concrete and Two Tennessee “were singled out by defendants for disparate treatment.”

The complaint does not allege with any particularity the class of persons against whom Razorback

Concrete and Two Tennessee compare themselves for purposes of judging similarity, but no

“insuperable bar to relief” appears on the face of the complaint. Gebhardt, 335 F.3d at 829.

In light of Olech, the complaint here states an equal protection claim. The motion to dismiss

the equal protection claim is denied.

Takings Clause

The Fifth Amendment prohibits the taking of private property for public use without just

compensation. U.S. CONST. amend. V. The Supreme Court applies this clause to the states. See

Kelo v. City of New London, Conn., 545 U.S. 469, 175 S. Ct. 2655, 2662, 162 L. Ed. 2d 439 (2005).

Razorback Concrete and Two Tennessee allege that the defendants’ actions constitute an unlawful

taking of their property. The defendants contend that this claim is not ripe because Razorback

Concrete and Two Tennessee have not used state procedures through which they might secure just

compensation.

“[I]f a State provides an adequate procedure for seeking just compensation, the property

owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and

been denied just compensation.” Williamson County Reg’l Planning Comm’n v. Hamilton Bank of

Johnson City, 473 U.S. 172, 195, 105 S. Ct. 3108, 3121, 87 L. Ed. 2d 126 (1985). See also

Koscielski v. City of Minneapolis, 435 F.3d 898, 903 (8th Cir. 2006). Razorback Concrete and Two

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 The plaintiffs contend, in the alternative, that Two Tennessee should be allowed to bring

its claim on the basis of diversity jurisdiction because Two Tennessee is diverse from the

defendants and damages exceed the statutory minimum. Diversity jurisdiction requires

“complete” diversity. 28 U.S.C. § 1332(a). “Complete diversity of citizenship exists where no

defendants hold citizenship in a state where any plaintiff holds citizenship.” Capitol Indem.

Corp. v. Russellville Steel Co., Inc., 367 F.3d 831, 835 (8th Cir. 2004).

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Tennessee do not dispute the application of this principle to their claim but contend that they should

be permitted to supplement their federal claims with a state-law inverse condemnation claim.1

Because the defendants have not filed an answer, the plaintiffs do not need leave to amend

the complaint. Leave to amend is required only after a responsive pleading has been served. FED.

R.CIV. P. 15(a). A motion to dismiss is not a responsive pleading. See Winfrey v. Brewer, 570 F.2d

761, 764 n.4 (8th Cir. 1978) (explaining FED R.CIV. P. 15(a)). See also FED R.CIV. P. 7 (identifying

which papers are “pleadings” under the Federal Rules of Civil Procedure and distinguishing

“pleadings” from “motions and other papers”). The plaintiffs then are free at this time to amend their

complaint to state this or any other state-law claim they wish to assert. At the conclusion of this

opinion, the Court will impose a deadline for filing an amended complaint. The Court offers no

opinion as to whether an amended complaint will survive another motion to dismiss. If leave of the

Court were required, Local Rule 5.5(e) would require a motion with the proposed pleading attached,

and, in that case, the court would judge the legal sufficiency of the amended pleading; but, here,

leave is not required, so the provisions of Local Rule 5.5(e) do not apply.

Due Process

The plaintiffs allege that the defendants violated their due process rights. The defendants

argue that due process is satisfied in this case because Arkansas affords meaningful and adequate

procedures to remedy the plaintiffs’ complaints. The plaintiffs do not take issue with this argument.

Instead, they respond that they have properly asserted a violation of their substantive due process

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rights. Courts have recognized substantive due process rights as distinct from procedural due

process rights. See Koscielski, 435 F.3d at 902-03; Chesterfield Dev. Corp. v. City of Chesterfield,

963 F.2d 1102, 1103-04 (8th Cir. 1992). Because the defendants’ arguments address only the

sufficiency of a claim of procedural due process, which is not asserted here, the court denies the

motion to dismiss the plaintiffs’ due process claim.

Legislative Immunity

The defendants contend that the individual defendants, Gipson, Hight, Berry, and Bryant, are

entitled to absolute immunity for their actions because they acted in a legislative function. It is well

settled that “[a]bsolute legislative immunity protects legislators from suit for actions taken in

furtherance of legitimate legislative activity.” Hinshaw v. Smith, 436 F.3d 997, 1008 (8th Cir. 2006).

Razorback Concrete and Two Tennessee recognize this general principle but argue that the city

council members’ acts were ministerial or executive in nature, not legislative.

According to the Supreme Court, “[w]hether an act is legislative turns on the nature of the

act, rather than on the motive or intent of the official performing it.” Bogan v. Scott-Harris, 523 U.S.

44, 54, 118 S. Ct. 966, 973, 140 L. Ed. 2d 79 (1998). In Bogan, the plaintiff sued city officials for

voting to eliminate the city department in which she worked, alleging that their action was motivated

by racial animus and in retaliation against the exercise of First Amendment rights. Id. at 47, 118 S.

Ct. at 969. The Court of Appeals, emphasizing the fact that the defendants had relied on matters

relating to the plaintiff and devised an ordinance that targeted her and treated her differently from

other employees, held that such action is not legislative. Scott-Harris v. City of Fall River, 134 F.3d

427, 441 (1st Cir. 1997), rev’d, 523 U.S. 44, 118 S. Ct. 966. The Supreme Court reversed, holding

that the Court of Appeals had erroneously relied upon subjective intent rather than the nature of the

act. Bogan, 523 U.S. at 54, 118 S. Ct. at 972-73. In determining the nature of the act, the Supreme

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Court primarily directed its attention to the form of the act. The court held that, in form, the nature

of an act of voting for or against a city ordinance was “quintessentially legislative.” Id. at 55, 118

S. Ct. at 973. The court declined to decide whether form alone could determine the nature of an act

because the act in that case was substantively legislative as well. Id. at 55-56, 118 S. Ct. at 973. Cf.

Hinshaw, 436 F.3d at 1008 (introducing a bill is “quintessentially legislative”); Alcierno v. Cloutier,

40 F.3d 597, 613 (3d Cir. 1994) (down-zoning a single parcel may be legislative if the council is

acting in a policy-making manner); O’Brien v. City of Greers Ferry, 873 F.2d 1115, 1119-20 (8th

Cir. 1989) (voting at a special meeting not to appropriate funds to defend an alderman was executive,

not legislative); Thornbury Noble, Ltd. v. Thornbury Township, No. CIV. A. 99-6460, 2002 WL

442827, at *11-12 (E.D. Pa. March 20, 2002) (rejecting a rezoning request was neither procedurally

nor substantively legislative).

In Bogan, the Supreme Court decided whether the action was legislative or executive in

nature after trial, so the Court had a full record upon which to base that determination. Here, the

Court has only a few allegations in a sparsely pled complaint. The complaint says nothing other than

that the defendants refused to correct the error on the zoning map and did so for bad motives (which

are irrelevant to the immunity issue). The complaint is insufficient to inform the Court of whether

the form or the substance of the action (or inaction) by the defendants was legislative. Was an

ordinance presented? If so, were the formalities for presenting an ordinance observed? Was there

a formal vote? Did the events occur at a regular meeting of the city council? Was the city council

acting on an administrative recommendation by the planning commission, on an appeal from a

decision of the commission, or in some other context? The complaint fails to answer these questions

and others that are relevant to the issue of legislative immunity. Thus, the Court has no information

as to whether the requirements for adopting ordinances were followed, so the Court cannot ascertain

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whether the action was legislative in form; nor does the Court have information to ascertain whether

the substance of the action (or inaction) was administrative rather than legislative.

The Court is mindful that the immunity at issue is immunity from suit, not merely immunity

from damages, and that the issue should be decided as early as possible. Cf. Saucier v. Katz, 533

U.S. 194, 200-01, 121 S. Ct. 2151, 2156, 150 L. Ed. 2d 272 (2001). Nevertheless, the information

before the Court is insufficient to show whether the action (or inaction) was legislative or

administrative in nature. Therefore, the motion to dismiss the individual defendants because they

have legislative immunity is denied without prejudice to the right of these defendants to renew the

motion by way of a motion for summary judgment or at trial.

Tortious Interference and Conspiracy

In response to the motion to dismiss, Razorback Concrete and Two Tennessee contend that

the complaint alleges common-law claims of tortious interference and conspiracy or, if it does not

properly give notice of these claims, seek leave to amend the complaint to add these claims. The

complaint states that the Court has supplemental jurisdiction over state-law claims, but it does not

give notice as to the nature of those claims, as required by Rule 8 of the Federal Rules of Civil

Procedure. See N. States Power Co. v. Fed. Transit Admin., 358 F.3d 1050, 1056-57 (8th Cir. 2004).

In reviewing the complaint, the Court cannot ascertain what state-law claims the plaintiffs intend to

assert. As stated above, leave to amend is not required because no responsive pleading has been

served. However, because the complaint does not give fair notice of the state-law claims, the Court

will order the plaintiffs to file an amended complaint if they intend to assert state-law claims and to

identify those state-law claims by name so that there can be no issue as to whether the defendants

have been given fair notice of the claims against them.

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CONCLUSION

The defendants’ motion to dismiss is granted in part and denied in part. Document #2. The

plaintiffs’ claim that the defendants violated the Contracts Clause of the Constitution of the United

States is dismissed without prejudice. The defendants’ motion to dismiss is denied as to all other

claims. If the plaintiffs intend to pursue claims under state law, whether in tort or for inverse

condemnation, they must file an amended complaint on or before September 15, 2006, and they must

identify their causes of action by name. If they fail to file an amended complaint on or before

September 15, 2006, their state-law claims and the Takings Clause claim will be dismissed. The

time within which the defendants must file an answer is stayed. The defendants must answer or

otherwise respond within ten days after the amended complaint is served, or, if no amended

complaint is filed by 5:00 p.m. on September 15, 2006, within ten days thereafter.

IT IS SO ORDERED this 23rd day of August, 2006.

J. LEON HOLMES

UNITED STATES DISTRICT JUDGE

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