NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 15-3117

___________

E & R ENTERPRISE LLC,

Appellant

v.

CITY OF REHOBOTH BEACH, a municipal corporation 

of the State of Delaware; STAN MILLS; KATHY MCGUINESS; 

PATRICK GOSSETT; LORRAINE ZELLERS; 

TONI SHARP; BILL SARGENT; SAMUEL R. COOPER; 

SHARON LYNN; TERRI SULLIVAN

 ____________________________________

On Appeal from the District Court

for the District of the Delaware

(D.C. Civil Action No. 1-14-cv-01452)

District Judge: Hon. Leonard P. Stark

____________________________________

Submitted under Third Circuit LAR 34.1(a)

on April 4, 2016

Before: AMBRO and KRAUSE, Circuit Judges, and **THOMPSON, District Judge

(Opinion filed: June 1, 2016)

OPINION*

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent.

**Honorable Ann E. Thompson District Judge for the United States District Court for the 

District of New Jersey, sitting by designation. 
2

KRAUSE, Circuit Judge.

E & R Enterprise LLC acquired property in Rehoboth Beach, Delaware but was 

denied a building permit after the City placed a moratorium on the construction of 

swimming pools. Rather than appealing the decision to the Board of Adjustment, E & R 

filed this action against the City and various City officials. E & R now appeals the 

District Court’s order granting in part and denying in part Defendants’ motion to dismiss. 

For the reasons stated below, we will vacate and remand the case to the District Court.

I. Background

E & R purchased land in Rehoboth Beach with the intention of building a

residential home and in-ground pool on the property. E & R submitted its building 

application on September 15, 2014, after being told at a joint meeting of the City’s Board 

of Commissioners and Planning Commission that applications should be submitted by

September 19 in order to be reviewed under “the currently applicable standards and 

zoning ordinances.” First Amended Compl. ¶ 18.

Four days after E & R’s submission, the City adopted a resolution proposing a

moratorium on permits and other approvals for the construction of unenclosed swimming 

pools within the zoning district where E & R’s property is located (“the Adopted 

Resolution”). On October 14, 2014, the City orally informed E & R and its contractor 

that E & R’s application for a building permit had been denied and that the City could not 

accept additional information in connection with the application. A few days later, the

City held a public hearing in order to determine whether to formally implement the 

Adopted Resolution, and City officials asked E & R to avoid taking further action until 
3

the denial could undergo further review. After a number of meetings and 

communications between E & R and City officials, on November 17 the City informed E 

& R that it would take no further action on the Adopted Resolution or on E & R’s permit 

application.

E & R promptly filed this action against the City in the Delaware Court of 

Chancery, later amending the Complaint to assert state and federal claims against the 

City, the Mayor, the City Building Inspector and members of the City Board of 

Commissioners. Defendants removed the case to federal court and filed a motion to 

dismiss for lack of subject matter jurisdiction and for failure to state a claim on which 

relief can be granted. 

After oral argument, the District Court granted Defendants’ motion in part and 

denied it in part, largely adopting Defendants’ principal argument that most of E & R’s

claims were not ripe because E & R had failed to appeal the denial of its permit to the 

Board of Adjustment (BOA or “Board”). On this ground, the District Court dismissed 

the procedural due process and equal protection claims E & R brought under 42 U.S.C. § 

1983.

1 The last of E & R’s federal claims, alleging a substantive due process violation 

under § 1983, was deemed ripe but was dismissed on the ground that the City’s alleged

conduct did not shock the conscience.

As for E & R’s state law claims, the District Court dismissed the procedural due 

process and vested rights claims for lack of ripeness but remanded E & R’s sole 

 

1 As E & R did not prevail on its § 1983 claims, its request for attorneys’ fees 

under 42 U.S.C. § 1988 necessarily failed as well.
4

remaining claim, for equitable estoppel, to the Delaware Court of Chancery for further 

proceedings. The District Court denied E & R’s request for leave to amend as futile.

II. Jurisdiction and Standard of Review

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We exercise 

plenary review over a Rule 12(b)(1) dismissal for lack of subject matter jurisdiction and a 

Rule 12(b)(6) dismissal for failure to state a claim. In re Schering Plough Corp. 

Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012).

III. Discussion

We begin with the threshold inquiry of whether E & R’s claims are ripe for 

review. Although the District Court correctly determined that most of E & R’s federal 

claims lack ripeness,

2 we conclude that all of E & R’s federal claims fail on this ground;

thus the District Court therefore lacked subject matter jurisdiction over this action and 

 

2 The District Court largely treated ripeness and exhaustion as interchangeable 

concepts. We note, however, that “ripeness is not to be confused with exhaustion.” 

Peachlum v. City of York, 333 F.3d 429, 436 (3d Cir. 2003). For example, there are 

circumstances in which additional administrative procedures may yet be available but the 

plaintiff nonetheless has a ripe challenge to a land-use decision. See Lauderbaugh v. 

Hopewell Twp., 319 F.3d 568, 575 (3d Cir. 2003). This is because the key inquiry for 

purposes of determining ripeness is whether an administrative decision “has been 

formalized and its effects felt in a concrete way by the challenging parties.” Peachlum, 

333 F.3d at 436 (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 138 (1967)). As we 

explain below, E & R’s failure to appeal to the BOA precluded any such formalization,

and E & R has suffered no concrete effects other than what is to be expected of a permit 

denial—that is, the inability to build the desired pool—which cannot by itself render this 

case ripe. Cf. Sameric Corp. of Delaware v. City of Philadelphia, 142 F.3d 582, 598 (3d 

Cir. 1998) (“[A]n ordinary lapse of time required for the processing of an appeal from the 

denial of a permit does not permit a plaintiff to recast a case as a delay claim; for if it did 

the ripeness requirement effectively would be eliminated.”). 
5

should have remanded it to the state court under 28 U.S.C. § 1447(c). See Armstrong 

World Indus., Inc. by Wolfson v. Adams, 961 F.2d 405, 424 (3d Cir. 1992).

Per the Supreme Court’s decision in Williamson County Regional Planning 

Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 186 (1985), we have 

consistently held that “in § 1983 cases involving land-use decisions, a property owner 

does not have a ripe claim until the zoning authorities have had an opportunity to arrive at 

a final, definitive position regarding how they will apply the regulations at issue to the 

particular land in question.” Lauderbaugh v. Hopewell Twp., 319 F.3d 568, 574 (3d Cir. 

2003) (quoting Taylor Investment, Ltd., v. Upper Darby Twp., 983 F.2d 1285, 1291 (3d 

Cir. 1993)) (alterations and internal quotation marks omitted). The finality rule bars 

premature, as-applied procedural due process claims, Taylor, 983 F.2d at 1293 (citing 

Williamson Cty., 473 U.S. at 200), as well as “as-applied substantive due process and 

equal protection claims by property owners or tenants who have challenged the denial of 

a permit by an initial decision-maker but failed to take advantage of available, subsequent 

procedures,” County Concrete Corp. v. Town of Roxbury, 442 F.3d 159, 164 (3d Cir. 

2006) (quoting Lauderbaugh, 319 F.3d at 574).

E & R’s failure to appeal to the BOA is dispositive for ripeness purposes because 

the BOA alone had the authority to render a final decision as to whether E & R was 

properly denied a building permit pursuant to the City’s zoning regulations. See Acierno 

v. Mitchell, 6 F.3d 970, 976 (3d Cir. 1993) (explaining that, in the context of a denial of a 

building permit, “[o]nly the [BOA] has final authority to interpret the zoning 

regulations—and until it renders a decision there is no final judgment”). Delaware law 
6

provides that “[a]ppeals to the [BOA] may be taken by any person refused a building 

permit, or from the decision of any administrative officer or agency based upon or made 

in the course of the administration or enforcement of the provisions of the zoning 

regulations.” Del. Code. Ann. tit. 9, § 6916. In Rehoboth the BOA has the power “[t]o 

hear and decide appeals where it is alleged that there is error in any order, requirement, 

decision or determination made by the Building Inspector in the enforcement of this 

chapter or by any ordinance supplemental hereof.” Code of the City of Rehoboth Beach 

§ 270–74.

To explain its failure to seek administrative review, E & R contends on appeal that 

City officials “hijacked” the regular permit process and created an alternative process by 

which they, and not the Building Inspector, rendered a decision denying E & R’s building 

application, such that there could be no appeal to the BOA. Appellant’s Br. 23, 26. This 

theory is unpersuasive. Not only has E & R failed to set forth adequate factual 

allegations to support its conclusory assertion that the initial permit denial was not 

appealable, but it also has pleaded facts that directly undercut its theory. For example, 

the Complaint asserts that “the City called an executive session with the Mayor, 

Commissioners, and Lynn on October 31, 2014 to further consider E & R’s Building 

Permit Application, its rejection by the Building Inspector, and the applicability of the

moratorium.” First Amended Compl. ¶ 37 (emphasis added)).

E & R also alleges that it could not appeal to the BOA because it relied on the 

City’s false representations until the window for filing an appeal had closed. Again, this 

assertion is at odds with the facts as pleaded in the Complaint, which characterizes the 
7

City’s November 17, 2014 statement that it would take no further action on the Adopted 

Resolution or the Building Permit Application as the “final decision from the highest 

members of City government” that prompted E & R to file this action. First Amended 

Compl. ¶ 42. If this was the date of the City’s decision, then, as noted by the District 

Court, E & R was required to appeal to the BOA within thirty days of that denial. See 

Rules of Proc. of the Board of Adjustment of Rehoboth Beach, Delaware, R. 14.3. In the 

alternative, if an earlier date, such as the City’s alleged October 14, 2014 oral rejection, is

properly construed as the date E & R’s application was denied, then E & R—who was 

represented by counsel—had the opportunity to appeal to the BOA, notwithstanding the 

City’s alleged misrepresentations, within thirty days or thereafter “for good cause.” Id.

Because E & R failed to do so, the District Court correctly concluded that it lacked 

jurisdiction over E & R’s federal procedural due process and equal protection claims.

The District Court erred, however, in declining to apply the finality rule to one of 

E & R’s federal claims, instead dismissing its substantive due process challenge for 

failure to state a claim. In so ruling, the District Court appears to have relied on the

exception to the finality rule first established by our Court in Blanche Road Corp. v. 

Bensalem Township, 57 F.3d 253 (3d Cir. 1995). In that case, we held that the plaintiff 

landowners had a ripe claim because they “[we]re not appealing from an adverse decision 

on a permit application”—indeed, by that point most of their permit applications had 

been approved—but instead asserted a substantive due process violation based on the 

harassment campaign allegedly waged by township employees in order to block or delay 

the issuance of the plaintiffs’ permits. Id. at 267–68 & n.14. We elaborated on this 
8

exception in County Concrete Corp. v. Town of Roxbury, where we held that the 

appellant’s allegation that township officials had engaged in “false public accusations”

and other “harassment” in the course of the zoning process in order to deprive the 

plaintiffs of lawful use of their property was “sufficient to establish a ripe [substantive 

due process] claim, regardless of the outcome of subsequent appeals for relief to 

municipal zoning boards.” 442 F.3d at 167, 170.

This exception has no bearing on E & R’s substantive due process claim. The 

controlling case here is Sameric Corp. of Delaware v. Philadelphia, 142 F.3d 582, 597 

(3d Cir. 1998), where the plaintiff property owner alleged harm beyond that resulting 

from the City’s denial of its permit, but we nonetheless rejected the plaintiff’s contention 

that its substantive due process claim was ripe under Blanche Road. Reiterating “the 

importance of the finality requirement and our reluctance to allow the courts to become 

super land-use boards of appeals,” we observed “that the grant of the permit would have 

reduced [the property owner’s] damages” and concluded that “to the extent that 

Sameric’s claims are based upon the City's denial of a building permit, they are not ripe.” 

Id. at 598; see also Acierno, 6 F.3d at 974–76; Taylor, 983 F.2d at 1293.

This case compels the same result. Although to support its substantive due 

process claim, E & R contends the City engaged in “extreme wrongful conduct” in 

delaying and denying the issuance of E & R’s permit and characterizes this conduct as 

“arbitrary, capricious and so egregious as to shock the conscience,” First Amended 

Compl. ¶¶ 83–84, this purported conduct bears no resemblance to the harassment alleged 

in Blanche Road or County Concrete. Whereas in Blanche Road “we declined to apply 
9

the finality requirement because a review of the permit decisions was not necessary to 

resolve the dispute,” Sameric, 142 F.3d at 598 (citing Blanche Road, 57 F.3d at 267–68), 

here E & R’s substantive due process claim turns on whether the City improperly denied 

it the building permit. The finality rule applies to substantive due process claims of this 

kind. See Taylor, 983 F.2d at 1293 (explaining that the zoning hearing board must make 

a determination before plaintiffs’ substantive due process claim is ripe because “[o]nly 

then will it be clear whether the Township has acted in an arbitrary and capricious 

manner”).

In light of the jurisdictional bar on E & R’s federal claims,

3

the District Court did 

not abuse its discretion in denying E & R leave to amend its complaint again. Cowell v. 

Palmer Twp., 263 F.3d 286, 296 (3d Cir. 2001) (“[L]eave to amend need not be granted 

when amending the complaint would clearly be futile.”); Miklavic v. USAir Inc., 21 F.3d 

551, 557–58 (3d Cir. 1994) (“[W]e find that granting leave to amend would have been 

futile on [the] ground . . . [of] lack of subject matter jurisdiction.”). However, as the

 

3 Although we recognize that in some cases lack of ripeness is merely a prudential 

consideration, here it serves as a jurisdictional bar. We are not confronted with a takings 

claim that we deem premature because the plaintiff failed to seek compensation, see

Horne v. Dep’t of Agric., 133 S. Ct. 2053, 2061–62 (2013), nor is this a case involving a 

facial challenge to a clearly applicable ordinance, Suitum v. Tahoe Reg’l Planning 

Agency, 520 U.S. 725, 736 & n.10 (1997). Rather, we are asked to assess whether E & 

R’s due process and equal protection rights have been violated where it is disputed 

whether there was any legal basis for the preliminary denial of its permit and before the 

proper zoning authorities have been able to render a decision on the issue. Under these 

circumstances, the City has not “arrived at a definitive position on the issue that inflicts 

an actual, concrete injury.” Lauderbaugh, 319 F.3d at 575 (quoting Williamson Cty., 473 

U.S. at 192; see also Horne, 133 S. Ct. at 2061. E & R’s federal claims are therefore 

deficient “in the ‘Case or Controversy’ sense,” Acierno, 6 F.3d at 974, such that the

District Court lacked jurisdiction.
10

District Court lacked subject matter jurisdiction over any of E & R’s federal claims, “the 

plain language of 28 U.S.C. § 1447(c) mandates that the matter be remanded to the state 

court from which it was removed.” Bromwell v. Michigan Mut. Ins. Co., 115 F.3d 208, 

213 (3d Cir. 1997). We therefore will vacate the dismissal of E & R’s state and federal 

claims and remand to the District Court with instructions to remand the case to the 

Delaware Court of Chancery.