Opinion ID: 520311
Heading Depth: 2
Heading Rank: 1

Heading: Development of the Legal Standard

Text: 16 Federal courts have followed a somewhat uneven course in explicating the rationale for and the extent to which the substantive component of the Due Process Clause of the Fourteenth Amendment protects landowners in disputes with local agencies empowered to limit the permissible uses of their property. Though appellate courts frequently invoke Justice Marshall's observation that the role of the Supreme Court (and presumably of every other federal court as well) should not be to sit as a zoning board of appeals, Village of Belle Terre v. Boraas, 416 U.S. 1, 13, 94 S.Ct. 1536, 1543, 39 L.Ed.2d 797 (1974) (Marshall, J., dissenting), their willingness to entertain a claim that a local land use regulator has acted arbitrarily or capriciously sometimes leads them to require trial courts to make an inquiry similar to the sort of determination that zoning boards of appeal routinely make. 1 17 The initial effort to subject local land use decisions to constitutional scrutiny involved challenges to new zoning restrictions imposed upon property owners. The Supreme Court's first consideration of such a challenge, though occurring in an era when substantive due process was often a formidable protection against governmental regulation, met with a significant rebuff. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed.2d 303 (1926). The Supreme Court ruled that zoning regulations will survive substantive due process challenge unless they are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare. Id. at 395, 47 S.Ct. at 121. With the decline of substantive due process as a protection against economic regulation, zoning regulation continued easily to survive constitutional challenge. See Goldblatt v. Town of Hempstead, 369 U.S. 590, 82 S.Ct. 987, 8 L.Ed.2d 130 (1962). Pertinent to the later development of the case law concerning land use regulation is the fact that in the early zoning cases, there was no dispute as to whether the plaintiff had a property interest within the meaning of the Fourteenth Amendment; his property interest was in the land he owned, land that the local regulating body sought to restrict as to use. 18 The next phase of land regulation cases involved applications by property owners to obtain a change in existing zoning regulations. Denials of rezoning applications were challenged as a denial of property in violation of the substantive component of the Due Process Clause. Without pausing to focus on whether the property interest at stake was the land owned by the plaintiff or the zone change for which he was applying, courts generally rejected these challenges, applying the deferential standards of Euclid. An early rezoning application case in the District of Columbia Circuit, Leventhal v. District of Columbia, 100 F.2d 94, 95 (D.C.Cir.1938), expressly relied on Euclid, and subsequent rezoning cases in that Circuit simply cited Leventhal for the applicable standard, e.g., Lewis v. District of Columbia, 190 F.2d 25, 27 (D.C.Cir.1951), even in those rare instances where the denial of a rezoning application was held to be arbitrary and capricious, e.g., Shenk v. Zoning Commission, 440 F.2d 295, 297 (D.C.Cir.1971). 19 The analytical framework applicable to constitutional challenges to land regulation was affected by the Supreme Court's 1972 decisions in Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), and Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). Though concerned with an interest in employment, rather than land, and the protection of procedural, rather than substantive, due process, 2 both decisions were potentially pertinent to land regulation in their announcement that a property interest, within the meaning of the Fourteenth Amendment, includes not only what is owned but also, in some limited circumstances, what is sought. This expanded concept of property, however, requires more than an abstract need or desire or a unilateral expectation of what is sought. Board of Regents v. Roth, supra, 408 U.S. at 577, 92 S.Ct. at 2709. Instead, there must be a legitimate claim of entitlement. Id; see Perry v. Sindermann, supra, 408 U.S. at 601, 92 S.Ct. at 2699. 20 After 1972, some courts considering constitutional challenges to land regulation began their inquiry by citing Roth and asking whether the plaintiff had a clear entitlement to the approval he was seeking from the land use regulating body. See Creative Environments, Inc. v. Estabrook, 680 F.2d 822, 831 (1st Cir.) (request for approval of subdivision plan; property interest assumed), cert. denied, 459 U.S. 989, 103 S.Ct. 345, 74 L.Ed.2d 385 (1982); United Land Corporation of America v. Clarke, 613 F.2d 497, 501 (4th Cir.1980) (request for approval of soil erosion permit; no protectable interest in the permit because of discretionary authority in administrator). This same approach is reflected in Scott v. Greenville County, 716 F.2d 1409 (4th Cir.1983), one of the few decisions rejecting dismissal on summary judgment of a claim that a denial of approval for land use was arbitrary and capricious and hence a denial of substantive due process. In a thoughtful opinion by Chief Judge Winter, the Court inquired whether an applicant for a building permit had a  'protectible property interest in the permit' sufficient to trigger federal due process guarantees. Id. at 1418 (citing United Land Corporation of America v. Clarke, supra, 613 F.2d at 501). Chief Judge Winter concluded that the applicant had a clear entitlement to the permit under state law. In Scott, the applicant was not the owner of the property, although his option to purchase it would seem to have given him an interest that itself could have been considered property under the Due Process Clause. Chief Judge Winter characterized the interest in the applied for permit as a  'species of property,'  id. at 1421 (quoting Logan v. Zimmerman Brush Co., 455 U.S. 422, 429, 102 S.Ct. 1148, 1154, 71 L.Ed.2d 265 (1982)), though he noted that it is not in the same category as property that is protected by the Fourteenth Amendment's incorporation of the takings clause of the Fifth Amendment, id. & n. 20. 21 Many post-1972 land regulation decisions, however, have not pursued the Roth analysis in land regulation cases. Instead of inquiring as to the plaintiff's degree of entitlement to what he sought, these decisions have implicitly assumed that the pertinent property interest is the property the plaintiff owns and simply examined whether the action of local regulators in denying an application for the proposed use of the land was arbitrary and capricious. This has occurred both in decisions rejecting substantive due process challenges, e.g., Burrell v. City of Kankakee, 815 F.2d 1127 (7th Cir.1987) (rezoning application); Pace Resources, Inc. v. Shrewsbury Township, 808 F.2d 1023, 1034-37 (3d Cir.) (development plan), cert. denied, 482 U.S. 906, 107 S.Ct. 2482, 96 L.Ed.2d 375 (1987); Chiplin Enterprises, Inc. v. City of Lebanon, 712 F.2d 1524 (1st Cir.1983) (building permit); Scudder v. Town of Greendale, 704 F.2d 999 (7th Cir.1983) (building permit); South Gwinnett Venture v. Pruitt, 491 F.2d 5 (5th Cir.) (in banc) (rezoning application), cert. denied, 419 U.S. 837, 95 S.Ct. 66, 42 L.Ed.2d 64 (1974), and in the few decisions upholding such claims, at least against a motion for summary judgment, e.g., Bello v. Walker, 840 F.2d 1124 (3d Cir.) (building permit), cert. denied, --- U.S. ----, 109 S.Ct. 134, 102 L.Ed.2d 107 (1988), or for dismissal for failure to state a claim, e.g., Altaire Builders, Inc. v. Village of Horseheads, 551 F.Supp. 1066 (W.D.N.Y.1982) (planned unit development application). 3 22 Bello is a clear example of a court focusing exclusively on whether the local land use regulator acted arbitrarily and capriciously without inquiry as to whether the protected property interest is in the land the plaintiff owns and is seeking to use or in the permit he requires for his intended use; the Court extracted from prior cases, including those concerned with denial of equal protection, like Arlington Heights v. Metropolitan Development Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977), a general rule that the deliberate and arbitrary abuse of government power violates an individual's right to substantive due process. Bello v. Walker, supra, 840 F.2d at 1129. See Shelton v. City of College Station, 780 F.2d 475, 479 (5th Cir.) (in banc) (declining to determine whether property interest was in the right to seek a zoning variance or in the right to use the plaintiff's property), cert. denied, 477 U.S. 905, 106 S.Ct. 3276, 91 L.Ed.2d 566 (1986). 23 Cordeco Development Corp. v. Santiago Vasquez, 539 F.2d 256 (1st Cir.), cert. denied, 429 U.S. 978, 97 S.Ct. 488, 50 L.Ed.2d 586 (1976), also made no inquiry as to the nature of the property interest at issue, although the plaintiff there framed his claim as a denial of equal protection, rather than a denial of property without substantive due process, 539 F.2d at 259. Chief Judge Winter's opinion in Scott v. Greenville County, supra, however, expresses the view that Cordeco fits more broadly into a line of cases addressing the substantive unfairness of the process by which governmental actors deprive a citizen of a protected interest, 716 F.2d at 1420 n. 14, because no recognized class-based or invidious discrimination was involved, id. at 1420. See Cordeco Development Corp. v. Vasquez, supra, 539 F.2d at 260 n. 5 (separate views of Campbell, J.). Cordeco is one of the rare decisions in which a land regulation claim reached decision by a fact-finder (trial judge with an advisory jury). 24 In this Circuit, our post-Roth cases considering a landowner's claim of a due process violation in the denial of an application for regulated use of his land have been significantly influenced by the Roth entitlement analysis. In Yale Auto Parts, Inc. v. Johnson, 758 F.2d 54 (2d Cir.1985), the landowner had been denied a permit to use his property for an automobile junkyard business. Expressly invoking Roth, Judge Mansfield focused initially on whether the landowner had a legitimate claim of entitlement to the license he sought and formulated the test for this inquiry to be that absent the alleged denial of due process, there is either a certainty or a very strong likelihood that the application would have been granted. Id. at 59. Finding that the licensing authorities had discretion in the issuance of the requested permit, the Court affirmed dismissal of the claim for lack of a protected property interest in the permit, even though the Court acknowledged that the allegations of the complaint alleged egregious misconduct by the defendants in the denial of the permit, id. at 59. 25 We have adhered to the property interest analysis of Yale Auto Parts both in finding a claimed interest in a land use application insufficient to constitute Fourteenth Amendment property, Dean Tarry Corp. v. Friedlander, 826 F.2d 210 (2d Cir.1987) (approval sought for municipal development plan), and in finding such an interest sufficient, at least for purposes of surviving summary judgment, Sullivan v. Town of Salem, 805 F.2d 81 (2d Cir.1986) (application for certificates of occupancy). Our latest decision in this area, though citing the entitlement test of Roth and our application of that test in Yale Auto Parts to the permit being sought, appears to have found the requisite property interest to be an aspect of the rights enjoyed by the plaintiff as owner of his property. Brady v. Town of Colchester, 863 F.2d 205 (2d Cir.1988). Brady is an unusual case, however, in that the owner was obliged by the local authorities to seek a permit for commercial use of his property, whereas his position was that his property was already zoned for commercial use, that no permit was required, and that the local decision obliging him to seek a permit was wholly unjustified. 26 It is not readily apparent why land regulation cases that involve applications to local regulators have applied the Roth entitlement test to inquire whether an entitlement exists in what has been applied for--whether a zoning variance, a business license, or a building permit--instead of simply recognizing the owner's indisputable property interest in the land he owns and asking whether local government has exceeded the limits of substantive due process in regulating the plaintiff's use of his property by denying the application arbitrarily and capriciously. 4 As Justice Stevens has observed, the opportunity to apply for [a zoning amendment] is an aspect of property ownership protected by the Due Process Clause of the Fourteenth Amendment. City of Eastlake v. Forest City Enterprises, Inc., 426 U.S. 668, 683, 96 S.Ct. 2358, 2366, 49 L.Ed.2d 132 (1976) (Stevens, J., with whom Brennan, J., joins, dissenting). Indeed, the entitlement inquiry will not often aid the analysis in this context. When a local regulator's discretionary decision to deny an application is not arbitrary or capricious, the plaintiff will usually be deemed not to have a sufficient entitlement to constitute a protected property interest. On occasion, however, as Yale Auto Parts demonstrates, the plaintiff may be deemed not to have a protected property interest in the requested permit, even in a case where the denial of the permit is arbitrary. The fact that the permit could have been denied on non-arbitrary grounds defeats the federal due process claim. Focusing on the authority of the local regulator thereby permits the threshold rejection of some federal due process claims, without awaiting exploration of whether the regulator acted so arbitrarily as to offend substantive due process in the particular case. In any event, Yale Auto Parts and its progeny have committed this Circuit to the entitlement inquiry in land use regulation cases. 27 If federal courts are not to become zoning boards of appeals (and not to substitute for state courts in their state law review of local land-use regulatory decisions), the entitlement test of Yale Auto Parts--certainty or a very strong likelihood of issuance--must be applied with considerable rigor. Application of the test must focus primarily on the degree of discretion enjoyed by the issuing authority, not the estimated probability that the authority will act favorably in a particular case. See Walentas v. Lipper, 862 F.2d 414, 419 (2d Cir.1988); RR Village Ass'n, Inc. v. Denver Sewer Corp., 826 F.2d 1197, 1201-02 (2d Cir.1987); Sullivan v. Town of Salem, supra, 805 F.2d at 85. Yale Auto Parts rejected the claim of a property interest in the permit being sought because of the discretion of the local regulating body. Even if in a particular case, objective observers would estimate that the probability of issuance was extremely high, the opportunity of the local agency to deny issuance suffices to defeat the existence of a federally protected property interest. The strong likelihood aspect of Yale Auto Parts comes into play only when the discretion of the issuing agency is so narrowly circumscribed that approval of a proper application is virtually assured; an entitlement does not arise simply because it is likely that broad discretion will be favorably exercised. Since the entitlement analysis focuses on the degree of official discretion and not on the probability of its favorable exercise, the question of whether an applicant has a property interest will normally be a matter of law for the court.