Source: https://www.law.cornell.edu/supremecourt/text/426/668/
Timestamp: 2019-04-22 12:37:22+00:00

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CITY OF EASTLAKE et al., Petitioners, v. FOREST CITY ENTERPRISES, INC.
(a) A referendum, which is a means for direct political participation by the people, allowing them what amounts to a veto power over legislative enactments, cannot be characterized as a delegation of power. In establishing legislative bodies, the people can reserve to themselves power to deal directly with matters that might otherwise be assigned to the legislature, and here the power of referendum was specifically reserved to the people under the Ohio Constitution. Pp. 672-674.
(c) A referendum result that is arbitrary and capricious, bearing no relation to police power, is open to challenge in state court, where the scope of the available state remedy would be determined as a matter of state law and under the Fourteenth Amendment. Pp. 676-677.
(d) As a basic instrument of democratic government, the referendum process does not, in itself, violate the Due Process Clause of the Fourteenth Amendment when applied to a rezoning ordinance. Eubank v. Richmond, 226 U.S. 137, 33 S.Ct. 76, 57 L.Ed. 156; Washington ex rel. Seattle Title Trust Co. v. Roberge, 278 U.S. 116, 49 S.Ct. 50, 73 L.Ed. 210, distinguished. Pp. 677-679.
J. Melvin Andrews, Eastlake, Ohio, for petitioners.
William D. Ginn, Cleveland, Ohio, for respondent.
In May 1971, respondent applied to the City Planning Commission for a zoning change to permit construction of a multi-family, high-rise apartment building. The Planning Commission recommended the proposed change to the City Council, which under Eastlake's procedures could either accept or reject the Planning Commission's recommendation. Meanwhile, by popular vote, the voters of Eastlake amended the city charter to require that any changes in land use agreed to by the Council be approved by a 55% Vote in a referendum. 1 The City Council approved the Planning Commission's recommendation for reclassification of respondent's property to permit the proposed project. Respondent then applied to the Planning Commission for "parking and yard" approval for the proposed building. The Commission rejected the application, on the ground that the City Council's rezoning action had not yet been submitted to the voters for ratification.
The reservation of such power is the basis for the town meeting, a tradition which continues to this day in some States as both a practical and symbolic part of our democratic processes. 6 The referendum, similarly, is a means for direct political participation, allowing the people the final decision, amounting to a veto power, over enactments of representative bodies. The practice is designed to "give citizens a voice on questions of public policy." James v. Valtierra, supra, 402 U.S., at 141, 91 S.Ct., at 1333.
"The initiative and referendum powers are hereby reserved to the people of each municipality on all questions which such municipalities may now or hereafter be authorized by law to control by legislative action . . . ." Ohio Const., Art. II, § 1f.
To be subject to Ohio's referendum procedure, the question must be one within the scope of legislative power. The Ohio Supreme Court expressly found that the City Council's action in rezoning respondent's eight acres from light industrial to high-density residential use was legislative in nature. 7 Distinguishing between administrative and legislative acts, the court separated the power to zone or rezone, by passage or amendment of a zoning ordinance, from the power to grant relief from unnecessary hardship. 8 The former function was found to be legislative in nature. 9 Accord, Denney v. Duluth, 295 Minn. 22, 28-29, 202 N.W.2d 892, 895-896 (1972); Smith v. Township of Livingston, 106 N.J.Super. 444, 454, 256 A.2d 85, 90 (1969); Wollen v. Borough of Fort Lee, 27 N.J. 408, 422, 142 A.2d 881, 888-889 (1958); Johnston v. City of Claremont, 49 Cal.2d 826, 835-836, 323 P.2d 71, 76-77 (1958); Dwyer v. City Council, 200 Cal. 505, 515, 253 P. 932, 935-936 (1927); Hilltop Realty, Inc. v. City of South Euclid, 110 Ohio App. 535, 164 N.E.2d 180 (1960). Compare Kelley v. John, 162 Neb. 319, 75 N.W.2d 713 (1956), with In re Frank, 183 Neb. 722, 723, 164 N.W.2d 215, 216 (1969).
The Ohio Supreme Court further concluded that the amendment to the city charter constituted a "delegation" of power violative of federal constitutional guarantees because the voters were given no standards to guide their decision. Under Eastlake's procedure, the Ohio Supreme Court reasoned, no mechanism existed, nor indeed could exist, to assure that the voters would act rationally in passing upon a proposed zoning change. This meant that "appropriate legislative action (would) be made dependent upon the potentially arbitrary and unreasonable whims of the voting public." 41 Ohio St.2d, at 195, 324 N.E.2d, at 746. The potential for arbitrariness in the process, the court concluded, violated due process.
"The sovereignty of the people is itself subject to those constitutional limitations which have been duly adopted and remain unrepealed." Hunter v. Erickson, 393 U.S., at 392, 89 S.Ct., at 561.
See also Lucas v. Colorado Gen. Assembly, 377 U.S. 713, 736-737, 84 S.Ct. 1459, 1473-1474, 12 L.Ed.2d 632 (1964); West Virginia State Bd. of Educ. v. Barnette, 319 U.S. 624, 638, 63 S.Ct. 1178, 1185, 87 L.Ed. 1628 (1943).
"A referendum, however, is far more than an expression of ambiguously founded neighborhood preference. It is the city itself legislating through its voters an exercise by the voters of their traditional right through direct legislation to override the views of their elected representatives as to what serves the public interest." Southern Alameda Spanish Speaking Organization v. Union City, California, 424 F.2d 291, 294 (1970).
Mr. Justice Black went on to say that a referendum procedure, such as the one at issue here, is a classic demonstration of "devotion to democracy . . . ." Id., at 141, 91 S.Ct., at 1333. As a basic instrument of democratic government, the referendum process does not, in itself, violate the Due Process Clause of the Fourteenth Amendment when applied to a rezoning ordinance. 13 Since the rezoning decision in this case was properly reserved to the People of Eastlake under the Ohio Constitution, the Ohio Supreme Court erred in holding invalid, on federal constitutional grounds, the charter amendment permitting the voters to decide whether the zoned use of respondent's property could be altered.
The judgment of the Ohio Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
A zoning code is unlike other legislation affecting the use of property. The deprivation caused by a zoning code is customarily qualified by recognizing the property owner's right to apply for an amendment or variance to accommodate his individual needs. The expectancy that particular changes consistent with the basic zoning plan will be allowed frequently and on their merits is a normal incident of property ownership, when the governing body offers the owner the opportunity to seek such a change whether that opportunity is denominated a privilege or a right it is affording protection to the owner's interest in making legitimate use of his property.
The fact that an individual owner (like any other petitioner or plaintiff) may not have a legal right to the relief he seeks does not mean that he has no right to fair procedure in the consideration of the merits of his application. The fact that codes regularly provide a procedure for granting individual exceptions or changes, the fact that such changes are granted in individual cases with great frequency, and the fact that the particular code in the record before us contemplates that changes consistent with the basic plan will be allowed, all support my opinion that the opportunity to apply for an amendment is an aspect of property ownership protected by the Due Process Clause of the Fourteenth Amendment.
Although this Court has decided only a handful of zoning cases, literally thousands of zoning disputes have been resolved by state courts. Those courts have repeatedly identified the obvious difference between the adoption of a comprehensive citywide plan by legislative action and the decision of particular issues involving specific uses of specific parcels. In the former situation there is generally great deference to the judgment of the legislature; in the latter situation state courts have not hesitated to correct manifest injustice.
"Ordinances laying down general policies without regard to a specific piece of property are usually an exercise of legislative authority, are subject to limited review, and may only be attacked upon constitutional grounds for an arbitrary abuse of authority. On the other hand, a determination whether the permissible use of a specific piece of property should be changed is usually an exercise of judicial authority and its propriety is subject to an altogether different test." Fasano v. Board of County Comm'rs, 264 Or. 574, 580-581, 507 P.2d 23, 26 (1973).
Specialists in the practice of zoning law are unhappily familiar with the potential for abuse which exists when inadequate procedural safeguards apply to the dispensation of special grants. The power to deny arbitrarily may give rise to the power to exact intolerable conditions. 7 The insistence on fair procedure in this area of the law falls squarely within the purpose of the Due Process Clause of the Fourteenth Amendment.
"Due process of law requires that procedures for the exercise of municipal power be structured such that fundamental choices among competing municipal policies are resolved by a responsible organ of government. It also requires that a municipality protect individuals against the arbitrary exercise of municipal power, by assuring that fundamental policy choices underlying the exercise of that power are articulated by some responsible organ of municipal government. McGautha v. California (1971), 402 U.S. 183, 256, 270, 91 S.Ct. 1454, 28 L.Ed.2d 711. The Eastlake charter provision ignored these concepts and blatantly delegated legislative authority, with no assurance that the result reached thereby would be reasonable or rational. For these reasons, the provision clearly violates the due process clause of the Fourteenth Amendment." 41 Ohio St.2d 187, 196, 324 N.E.2d 740, 746 (1975) (footnote omitted).
"There can be little doubt of the true purpose of Eastlake's charter provision it is to obstruct change in land use, by rendering such change so burdensome as to be prohibitive. The charter provision was apparently adopted specifically, to prevent multi-family housing, and indeed was adopted while Forest City's application for rezoning to permit a multi-family housing project was pending before the City Planning Commission and City Council. The restrictive purpose of the provision is crudely apparent on its face. Any zoning change, regardless of how minor, and regardless of its approval by the Planning Commission and the City Council, must be approved by a city-wide referendum. The proposed change must receive, rather than a simple majority, at least a 55 percent affirmative vote. Finally, the owner of the property affected is required to pay the cost of the election, although the provision gives no hint as to exactly which costs would be billed to a property owner.
"There is no subtlety to this; it is simply an attempt to render change difficult and expensive under the guise of popular democracy.
"Even stripped of its harsher provisions the charter provision poses serious problems. A mandatory, city-wide referendum which applies to any zoning change must, of necessity, submit decisions that affect one person's use of his property to thousands of voters with no interest whatever in that property. We need only imagine the adoption of this same provision in a city such as Cleveland. By such a provision, rezoning for a corner gasoline station would require the approval of hundreds of thousands of voters, most of them living miles away, and few of them with the slightest interest in the matter. This would be government by caprice, and would seriously dilute the right of private ownership of property. The law recognizes that the use a person makes of his property must inevitably affect his neighbors and, in some cases, the surrounding community. These real interests are entitled to be balanced against the rights of a property owner; but a law which requires a property owner, who proposes a wholly benign use of his property, to obtain the assent of thousands of persons with no such interest, goes beyond any reasonable public purpose." Id., at 199-200, 324 N.E.2d, at 748-749.
The essence of fair procedure is that the interested parties be given a reasonable opportunity to have their dispute resolved on the merits by reference to articulable rules. If a dispute involves only the conflicting rigs of private litigants, it is elementary that the decision-maker must be impartial and qualified to understand and to apply the controlling rules.
I have no doubt about the validity of the initiative or the referendum as an appropriate method of deciding questions of community policy. 15 I think it is equally clear that the popular vote is not an acceptable method of adjudicating the rights of individual litigants. The problem presented by this case is unique, because it may involve a three-sided controversy, in which there is at least potential conflict between the rights of the property owner and the rights of his neighbors, and also potential conflict with the public interest in preserving the city's basic zoning plan. If the latter aspect of the controversy were predominant, the referendum would be an acceptable procedure. On the other hand, when the record indicates without contradiction that there is no threat to the general public interest in preserving the city's plan as it does in this case, since respondent's proposal was approved by both the Planning Commission and the City Council and there has been no allegation that the use of this eight-acre parcel for apartments rather than light industry would adversely affect the community or raise any policy issue of citywide concern I think the case should be treated as one in which it is essential that the private property owner be given a fair opportunity to have his claim determined on its merits.
"That any change to the existing land uses or any change whatsoever to any ordinance . . . cannot be approved unless and until it shall have been submitted to the Planning Commission, for approval or disapproval. That in the event the city council should approve any of the preceding changes, or enactments, whether approved or disapproved by the Planning Commission it shall not be approved or passed by the declaration of an emergency, and it shall not be effective, but it shall be mandatory that the same be approved by a 55% Favorable vote of all votes cast of the qualified electors of the City of Eastlake at the next regular municipal election, if one shall occur not less than sixty (60) or more than one hundred and twenty (120) days after its passage, otherwise at a special election falling on the generally established day of the primary election. . . ."
Respondent also contended that the charter amendment could not apply to its rezoning application since the application was pending at the time the amendment was adopted. The Court of Common Pleas rejected the argument. Respondent neither appealed this point nor argued it in the Court of Appeals or the Ohio Supreme Court; the issue is therefore not before us.
The Court of Common Pleas, however, invalidated the charter provision requiring assessment of election costs against the affected property owner. In affirming, the Court of Appeals also upheld that portion of the trial court's judgment. No appeal was taken to the Ohio Supreme Court on this issue. The question was, accordingly, not passed on by the State Supreme Court, and is therefor not before us.
Respondent did not challenge the 55%-Affirmative requirement as such. Instead, respondent contended that any mandatory referendum provision, regardless of the requisite margin for approval, violated due process as applied to its rezoning application.
"The legislative power of the states shall be vested in a General Assembly . . . but the people reserve to themselves the power to propose to the General Assembly laws and amendments to the constitution, and to adopt or reject the same at the polls on a referendum vote . . . ." Ohio Const., Art. II, § 1.
The land use change requested by respondent would likely entail the provision of additional city services, such as schools and police and fire protection. Cf. James v. Valtierra, 402 U.S. 137, 143 n. 4, 91 S.Ct. 1331, 1334, 28 L.Ed.2d 678 (1971). The change would also diminish the land area available for industrial purposes, thereby affecting Eastlake's potential economic development.
By its nature, zoning "interferes" significantly with owners' uses of property. It is hornbook law that "(m)ere diminution of market value or interference with the property owner's personal plans and desires relative to his property is insufficient to invalidate a zoning ordinance or to entitle him to a variance or rezoning." 8 E. McQuillan, Municipal Corporations § 25.44, p. 111 (3d ed. 1965). There is, of course, no contention in this case that the existing zoning classification renders respondent's property valueless or otherwise diminishes its value below the value when respondent acquired it.
The power of initiative or referendum may be reserved or conferred "with respect to any matter, legislative or administrative, within the realm of local affairs . . . ." 5 E. McQuillan, Municipal Corporations § 16.54, p. 208 (3d ed. 1969). However, the Ohio Supreme Court concluded that only land use changes granted by the City Council when acting in a Legislative capacity were subject to the referendum process. Under the court's binding interpretation of state law, a property owner seeking relief from unnecessary hardship occasioned by zoning restrictions would not be subject to Eastlake's referendum procedure. For example, if unforeseeable future changes give rise to hardship on the owner, the holding of the Ohio Supreme Court provides avenues of administrative relief not subject to the referendum process.
The Ohio Supreme Court's analysis of the requirements for standards flowing from the Fourteenth Amendment also sweeps too broadly. Except as a legislative history informs an analysis of legislative action, there is no more advance assurance that a legislative body will act by conscientiously applying consistent standards than there is with respect to voters. For example, there is no certainty that the City Council in this case would act on the basis of "standards" explicit or otherwise in Eastlake's comprehensive zoning ordinance. Nor is there any assurance that townspeople assembling in a town meeting, as the people of Eastlake could do, Hunter v. Erickson, 393 U.S. 385, 392, 89 S.Ct. 557, 561, 21 L.Ed.2d 616 (1969), will act according to consistent standards. The critical constitutional inquiry, rather, is whether the zoning restriction produces arbitrary or capricious results.
"(The ordinance in Eubank ) left the establishment of the building line untouched until the lot owners should act and then . . . gave to it the effect of law. The ordinance in the case at bar absolutely prohibits the erection of any billboards . . . but permits this prohibition to be modified with the consent of the persons who are to be most affected by such modification." 242 U.S., at 531, 37 S.Ct., at 192.
The fears expressed in dissent rest on the proposition that the procedure at issue here is "fundamentally unfair" to landowners; this fails to take into account the mechanisms for relief potentially available to property owners whose desired land use changes are rejected by the voters. First, if hardship is occasioned by zoning restrictions, Administrative relief is potentially available. Indeed, the very purpose of "variances" allowed by zoning officials is to avoid "practical difficulties and unnecessary hardship." 8 E. McQuillan, Municipal Corporations § 25.159, p. 511 (3d ed. 1965). As we noted, Supra, at 677, remedies remain available under the Ohio Supreme Court's holding and provide a means t challenge unreasonable or arbitrary action. Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926).
The Fourteenth Amendment provides: "No State shall . . . deprive any person of . . . property, without due process of law . . . ." U.S.Const., Amdt. 14, § 1.
The Ohio Supreme Court opinion is reported at 41 Ohio St.2d 187, 324 N.E.2d 740 (1975).
"Zoning maps are constantly being changed, for various reasons; and the question is, under what circumstances are such changes justified? . . . The problem is then to develop criteria for distinguishing valid from invalid zoning changes . . . ." 1 N. Williams, American Land Planning Law 6 (1974).
"Legally, all zoning enabling acts contemplate the possibility of dezoning, the power to amend zoning ordinances serving that purpose. The provisions do not show on their face whether they are intended to remedy particular errors or hardships, or whether they contemplate readjustments called for by the changing character of neighborhoods; undoubtedly, however, they may be made available for either purpose." Freund, Some Inadequately Discussed Problems of the Law of City Planning and Zoning, 24 Ill.L.Rev. 135, 145 (1929).
"For most communities, zoning as long range planning based on generalized legislative facts without regard to the individual facts has proved to be a theoretician's dream, soon dissolved in a series of zoning map amendments, exceptions and variances reflecting, generally, decisions made on individual grounds brought about by unanticipated and often unforeseeable events: social and political changes, ecological necessity, location and availability of roads and utilities, economic facts (especially costs of construction and financing), governmental needs, and, as important as any, market and consumer choice. Kropf v. City of Sterling Heights, 391 Mich. 139, 168, 215 N.W.2d 179, 191-192 (1974).
"Zoning is a means by which a governmental body can plan for the future it may not be used as a means to deny the future." National Land & Investment Co. v. Easttown Township Bd. of Adjustment, 419 Pa. 504, 528, 215 A.2d 597, 610 (1965).
The majority distinguished these cases on the ground that "the standardless delegation of power to a limited group of property owners . . . is not to be equated with decisionmaking by the people through the referendum process." Ante, at 678. Whether or not that is a sufficient distinction of those cases insofar as they deal with the adequacy of the city's procedure, the distinction does not undermine their support for the proposition that the city's procedure must afford the property owner due process.
"Although our early decisions viewed the enactment of Rezoning ordinances as a legislative function, the more recent decisions have held such activity to be a quasi-judicial function and reviewable under Rule 106(a)(4). In so doing, we have distinguished between the adjudicative process involved in enacting a Rezoning ordinance and the legislative process involved in passing the general zoning ordinance. This distinction was concisely drawn by the Supreme Court of Washington in Fleming v. Tacoma, 81 Wash.2d 292, 502 P.2d 327 (1972)." Snyder v. City of Lakewood, Colo., 542 P.2d 371, 373-374 (1975) (footnotes omitted).
change of an existing land use by the Council for an applicant, and the applicant agrees to assume all costs of the election and post bond with the city Auditor in an amount estimated by the County Auditor or the Board of Elections proportionate with any other issues that may be on the ballot at the same time. The applicant shall further agree to authorize the City Auditor to advertise, and assume the obligations to pay, for a notice of the posted bond and the requested land use change in a newspaper of general circulation, whose circulation is either the largest, or second to the largest within the limits of the City for two consecutive times, with at least two weeks between notices and a third notice one week prior to the election. Should the land use request not be affirmed by a 55% Favorable vote it cannot be presented again for one full year and a new request must be made at that time.
"It shall be the duty of any applicant for a land use change to obtain zoning codes, maps, thoroughfare and sewer plans or advice of the city council and officials and approving bodies for interpretation of this section as they are always available. If this section is violated and a building is under construction or completely constructed it shall be mandatory for the Mayor, Safety Director, Service Director and Building Inspector equally to have the building or structure removed completely within 60 days at the owner(')s expense as these officials are charged with the enforcement of this section. It shall be mandatory that the City Council charge and fund the Planning Commission to have on display at all times in the council chambers and available to the public a zone map, showing a legend and summary of zoning regulations by district, (m)ajor use, (m)inimum and maximum lot width and that each district, city park, playground and city lands be accurately located and identified with the date of adoption and the date of revisions to date. Any and all revisions will be posted to the zone map, within 90 days of their occurrence. Maps shall be available to each land owner of the city for a nominal cost not to exceed $2.50 each on demand. Maps shall be available within six months of this charter change."
There is no support in the record for the speculation in the Court's opinion, Ante, at 673 n. 7, that, the land use change "would likely entail the provision of additional city services, such as schools and police and fire protection." It seems equally likely that the residents of Eastlake who might move into the new development would also receive such services if they lived elsewhere. Nor is there any support for the speculation that the "change would also diminish the land area available for industrial purposes, thereby affecting Eastlake's potential economic development." If that speculation were accurate, it is surprising that the Planning Commission and the Council approved the change.
"But in restricting individual rights by exercise of the police power neither a municipal corporation nor the state legislature itself can deprive an individual of property rights by a plebiscite of neighbors or for their benefit. . . . " Benner v. Tribbitt, 190 Md. 6, 20, 57 A.2d 346, 353 (1948).
"The determination of a petition for a variance cannot be determined by a poll of the sentiment of the neighborhood." Town of Homecroft v. Macbeth, 238 Ind. 57, 62-63, 148 N.E.2d 563, 566 (1958).
"It is also not a proper exercise of such authority to base their decision (on a rezoning) merely on 'strenuous objections of residents of the Town' as (the Board) does in reason (3). Such remonstrances may be heard and taken into consideration but they may not be permitted to control the board's decision. Heffernan v. Zoning Board, 50 R.I. 26, 144 A. 674. A poll of the neighborhood to weigh the conflicting wishes of the residents or landowners in the vicinity is not the purpose of the hearing." Kent v. Zoning Board of Town of Barrington, 74 R.I. 89, 92, 58 A.2d 623, 624 (1948).
"Rather, the comprehensive plan is the essence of zoning. Without it, there can be no rational allocation of land use. It is the insurance that the public welfare is being served and that zoning does not become nothing more than just a Gallup poll." (Emphasis added.) Udell v. Haas, 21 N.Y.2d 463, 469, 288 N.Y.S.2d 888, 893-894, 235 N.E.2d 897, 900-901 (1968).
"While the referendum provision of the statute has not heretofore been construed by this court, we believe that the reasonable and proper construction of the statute supports the position of the plaintiff to the effect that the referendum-election provision applies only to a comprehensive type of zoning ordinance and does not apply to an altering or amending ordinance." Minneapolis-Honeywell Regulator Co. v. Nadasdy, 247 Minn. 159, 165, 76 N.W.2d 670, 675 (1956).
"The issue is whether an amendment to a city zoning ordinance changing the zoning of particular property is subject to a referendary vote of the electors of the city.
dum. The right of referendum extends only to legislative acts. A change in the zoning of particular property, although in form (amendment of a zoning ordinance) and in traditional analysis thought to be legislative action, is in substance an administrative, not legislative, act." West v. City of Portage, 392 Mich. 458, 460-461, 221 N.W.2d 303, 304 (1974).
"An ordinance changing the classification of property from residential to business use after the adoption of a comprehensive zoning plan is an administrative or executive matter, and not subject to referendum laws applicable to municipalities." Kelley v. John, 162 Neb. 319, 75 N.W.2d 713, 714 (1956) (syllabus by the court).
James v. Valtierra, 402 U.S. 137, 91 S.Ct. 1331, 28 L.Ed.2d 678, sustained the "use of referendums to give citizens a voice on questions of public policy." Id., at 141, 91 S.Ct., at 1333. The approval of a publicly financed housing project, which might "lead to large expenditures of local governmental funds for increased public services and to lower tax revenues," Id., at 143, 91 S.Ct., at 1334, raises policy questions not involved in a zoning change for a private property owner. That case presented no due process or other procedural issue.

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