Court Opinion

ID: 8967856
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:19:28.152108+00
Date Added: 2024-06-11T17:10:22.746931
License: Public Domain

GARTH, Circuit Judge,
dissenting:
Although a number of issues were raised and briefed by the parties, the majority opinion focuses solely on the threshold issue of whether RRI has demonstrated a property right which would support a constitutional claim. While I read the record in this case somewhat differently than the majority with respect to some of the subsidiary issues involved in this appeal, my major disagreement with the majority’s holding is that I find that RRI has proved a property interest whereas the majority holds otherwise. The majority concludes that the record in this case is “insufficient to support a finding of a clear entitlement to the permit so as to establish a property interest protected by the Fourteenth Amendment.” Maj. op. at 912. The record, however, is to the contrary. It is with respect to that issue, and that issue alone, that I think it appropriate to express my dissenting views. Thus, I will not venture beyond that subject in this opinion.1
I.
The majority correctly notes that the law of this Circuit addresses claims such as RRI’s under the government benefit/due process line of cases. In Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), the Supreme Court defined what constitutes property for the purposes of the due process clause. That definition controls our disposition here. The Court noted that property was created by the operation of state law:
.... To have a property interest in a benefit, a person clearly must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it....
Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law — rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.
Id. at 577, 92 S.Ct. at 2709.
This court has had several occasions to apply the principles of Roth to cases where a local board has refused to grant some type of permit or authorization. In Yale Auto Parts Inc. v. Johnson, 758 F.2d 54 (2d Cir.1985), the court reviewed the claim of an auto parts dealer who alleged that the West Haven Zoning Board of Appeal’s refusal to approve his application for a new business site, amounted to “arbitrary and capricious” behavior and violated his due process property rights. The district court granted the Zoning Board judgment on the pleadings.
In affirming the district court, this court held that the appropriate line of inquiry was whether the applicant had a legitimate claim of entitlement to the issuance of the certificate or license. The court held that the question as to whether an applicant had a claim of entitlement “depend[s] on wheth*921er, absent the alleged denial of due process, there is either a certainty or a very strong likelihood that the application would have been granted.” Yale Auto Parts, 758 F.2d at 59 (emphasis added).
In applying this principle to the facts of the Yale Auto Parts case, this court noted the broad discretion vested in the Zoning Board. Given this discretion, the court reasoned that the Zoning Board might properly have denied Yale’s application in exercising its authority granted by state law, and therefore it was by no means a certainty or a strong likelihood that the appellant would have received the permit. Thus, the court affirmed the district court’s judgment.
In Sullivan v. Town of Salem, 805 F.2d 81 (2d Cir.1986), this court again addressed the principle announced in Yale Auto Parts. The plaintiff in Sullivan sought to recover for the Town’s refusal to issue a Certificate of Occupancy and to accept the roads he had laid out. As in the instant case, the Town inexplicably refused to rule on Sullivan’s application, and only did so after Sullivan brought a state court proceeding in the nature of a Writ of Mandamus. Again, as in the case before us today, Sullivan sought to recover for the damages he suffered by the time delay.
The district court granted summary judgment to the Town relying upon Yale Auto Parts. In reversing, this court clarified its holding in Yale. The court reiterated the “very strong likelihood standard” standard set forth in Yale but stated:
By that standard we did not intend to remove from constitutional protection every application for a license or certificate that could, under any conceivable version of facts, be the subject of discretionary action; a theoretical possibility of discretionary action does not automatically classify an application for a license or a certificate as a mere “unilateral hope or expectation.” On the contrary, our standard was intended to be a tool capable of measuring particular applications to determine if the applicant had a legitimate claim of entitlement based on the likelihood that without the due process violation that application would have been granted.
Sullivan, 805 F.2d at 85.
The Sullivan court then noted that the Town had refused to grant the Certificate of Occupancy because the roads had not been accepted for dedication, despite the fact that there was no lawful basis for refusing the certificate on this ground. Id. The court also observed that, but for this unlawful reason, Sullivan’s application conformed (given the posture of the case) in all other respects to the requirements for a Certificate of Occupancy, and that he was thus entitled to it. This court thus reversed and remanded the case to the district court for a trial.
In Dean Tarry Corp. v. Friedlander, 826 F.2d 210 (2d Cir.1987), a developer, Dean Tarry, sought approval for a multifamily dwelling in Tarrytown, New York. The Town’s Planning Board rejected the plan, and Dean Tarry brought an Article 78 proceeding in state court to compel approval.2 The New York Supreme Court found that Dean Tarry’s application had met all of the technical requirements and that the application should have been approved. In particular, the New York court found that the ordinance by which the Town had refused the application was invalid. The New York court directed that Dean Tarry’s *922application be approved and the New York Appellate Division affirmed. See Id. at 211. The Town then amended its zoning ordinance so as to prevent approval of Dean Tarry’s plan. Dean Tarry then filed a new plan which would comply with the new ordinance, but the Board never voted on this new plan as three members recused themselves, thus preventing a quorum from meeting.
Like RRI in the present case, Dean Tarry filed suit in federal court asserting due process violations, under § 1983, because approval of its initial application was denied. The district court granted summary judgment to the Town, holding, inter alia that Dean Tarry did not possess a property interest in the approval of its plan. This court affirmed, distinguishing Sullivan and noting that:
In Sullivan, the unlawful requirement preventing approval of the builder’s application came out of thin air; it is not derived from an existing legislative or administrative standard such as the Tar-rytown zoning ordinance. See Sullivan, 805 F.2d 85. Having met all existing requirements, the Sullivan plaintiff clearly would have had a “certainty or a very strong likelihood” of success at the time he submitted his application.
In contrast, Dean Tarry’s application was rejected pursuant to a zoning ordinance, extant at the time Dean Tarry submitted its plan for approval, that conferred broad discretion on the Planning Board. As in Yale Auto Parts, this discretion, embodied in the governing law, prevented Dean Tarry’s expectation of success from rising to the level of certainty required to give rise to a cognizable property right.
Dean Tarry, 826 F.2d at 213 (emphasis in original).
The most recent treatment of the Yale Auto Parts principle by this court appears in Brady v. Town of Colchester, 863 F.2d 205 (1988). In that case, Brady, the recent purchaser of a building being used for commercial purposes, was refused a Certificate of Use and Occupancy and a zoning permit by the Colchester Planning and Zoning Commission (“CPZC”) on the grounds that his building was actually zoned for residential and not commercial purposes. Brady, by a mandamus proceeding brought in state court, ultimately forced the CPZC to provide him with the Certificate. Brady thereafter brought suit for damages in federal court under 42 U.S.C. § 1983, alleging that the CPZC had inter alia, deprived him of property, i.e., the zoning permit and the Certificate of Occupancy, in contravention of due process.
The district court granted summary judgment to Colchester. This court noted that if the property had been zoned for commercial use, the CPZC would have had no power under Connecticut law to deny Brady a Certificate of Occupancy, and therefore was acting beyond its authority. The Brady court concluded that if the CPZC did not have the authority to act as it did under Connecticut law, then the Yale Auto Parts test would be satisfied and Brady would have established a protectible property interest. The case was remanded to the district court for a trial to determine the zoning status of the property in question.
I believe the standard to be distilled from these cases is as follows: as with all government benefit/due process cases, the inquiry must focus on the legitimate expectations of the party seeking the government benefit. If the government is afforded broad discretion in conferring the benefit, and articulates reasons for denying the benefit within that discretion, then a plaintiff cannot prevail in establishing a constitutionally protected property interest. However, where the government’s discretion is limited by law and the government acts outside that limitation, or where the government’s articulated reason for denying the benefit is without basis in law, and no other lawful impediment to granting the application exists, then a plaintiff may assert an entitlement sufficient to support a *923constitutional claim. My reading of the majority opinion reveals no difference between the standard the majority employs and the standard I have set forth here.
II.
I turn now to the task of applying this standard to the facts of this case. In my view, the key to resolution of this appeal lies in the undisputed fact that although the Architectural Review Board was required by law to act within 30 days of the receipt of RRI’s application for a permit, it did not do so. Section 116-32E. of the Village of Southampton Code requires that the ARB act upon applications for building permits within 30 days. That provision reads:
E. The failure of ... the Board to approve an application or of the Board to hold a hearing on any application which may have been referred to it, within thirty (30) days, or to render its decision within ten (10) days of the closing of the hearing thereon, shall entitle the applicant to prompt issuance of a building permit, provided that all other applicable requirements have been satisfied.
As I have just noted, it is undisputed that the ARB and the building inspector failed to act upon RRI’s application within the prescribed time period mandated by Village Code § 116-32E. By failing to act within the stated 30 day period, the ARB and the building inspector became bound by the Code to issue RRI’s building permit.
The New York Supreme Court, in its opinion holding that RRI was entitled to the stage two building under state law, made a number of factual findings which are entitled to be given effect under the doctrine of collateral estoppel or issue preclusion. See Petrella v. Siegel, 843 F.2d 87, 90 (2d Cir.1988). Among other things, that court found:
The Code prescribes that the building inspector must either approve or disapprove of building permit applications within sixty (60) days of their submission. See Code § A119-3(A).
In addition, the Code requires that the Architectural Review Board hold a public hearing on any application referred to it for consideration which a committee of the Board had failed to approve. See Code § 116-32(B), (E). The public hearing must take place within thirty (30) days of the reference of the application to the Board and the Board must render its decision within ten (10) days of the hearing. See Code § 116-32(E). The petitioner commenced this proceeding on June 1, 1984. By that date, the sixty days which the Code (§ A119-3[A]) affords the building inspector to approve or disapprove a building permit application had passed without an approval or disapproval. Moreover, by June 1, 1984, the thirty days which the Code (§ 116— 32[E]) affords the Architectural Review Board to hold a public hearing on any permit application referred to the Board but not approved by a Board Committee had also passed without a hearing.
* * * * * *
Respondents final argument that the building permit application fell into the category of not meeting “other applicable requirements” as that language is found in § 116-32(E) of the Code must be dismissed. The Stage Two building permit application by its very terms as devised by the building inspector represented construction of the pre-existing building in conformance with the zoning ordinance. ...
******
.... The respondents abrogation of the statutorily-prescribed time limits in failing to hold a hearing and rendering a determination as to the building permit application mandates a direction compelling the issuance of the permit....
(A. 336, 337, 338).
Thus, after the 30 day period had expired, the building inspector, Romano, and the ARB no longer had any discretion to deny a permit, and RRI is correct in claiming that as a matter of law it became *924entitled to the permit. See e.g. Sullivan, 805 F.2d at 85. Indeed the jury, which was provided with a copy of the Village Code when it commenced its deliberations, concluded as much in finding for RRI.
Not surprisingly, neither the majority opinion nor the defendants offer any meaningful, let alone convincing, refutation of this argument. The Southampton defendants in their Reply Brief, argue that RRI cannot rely on § 116-32E. of the Village Code because that section provides for the issuance of permits only if the building complies with the Code and that despite the express provisions of § 116-32E., no property right can be created simply because of the passage of time. Reply Brief of the Village of Southampton at 12-13. In so stating, however, the Southampton defendants ignored, and did not respond to, the fact that the Building Inspector, Romano, had signed the building permit form on May 4,1984 (E. 259; T. 379), thereby establishing the fact that “all other applicable requirements” had been satisfied (Village Code § 116-32 E.), just as the New York State court found in the Article 78 proceeding. Indeed Romano himself had informed RRI of the permit’s issuance. (T. 1478-79). Moreover, the Southampton defendants, as well as the majority opinion, completely ignore the highly significant concession made in the opening statement by counsel for the ARB:
.... Of interest is the requirement in the village rules to make sure that the architectural review system does not slow things down where people are entitled to action.
If no action is taken within thirty days after a submission, then it is considered to be the equivalent of a grant. So whatever the judgment of the architectural board was or was not at that time, whether it was agreeable or not agreeable, after thirty days it became irrelevant.
(S.A. 47-48) (emphasis added).
The majority’s treatment of RRI’s thirty day argument is even less persuasive. The majority opinion concedes that: “It may be that on the thirty-first day, RRI was entitled to the permit as a matter of state law, as the state court held.” Maj. op. at 919. However, the majority then proceeds to formulate a principle that to my knowledge has no precedential support in any body of law. The majority holds that constitutionally, RRI cannot assert that it acquired a property interest in its pending permit when the ARB failed to act within the thirty day period prescribed by the Village Code. The reason given by the majority is that while the ARB had discretion to grant or deny a permit during the prescribed thirty day period, that lawful discretion also “... deprived RRI of a property interest in the permit, regardless of how unlawful under state law the ultimate denial may have been.” Maj. op. at 919. This is so, claims the majority, because “... RRI’s claim to the permit as a matter of constitutional law, cannot be fragmented into two claims, one subject to the ARB’s discretion within thirty days and one subject to a mandatory duty to issue after thirty days.” (emphasis added.)
Unfortunately, the majority has failed to inform us where this law of “non-fragmentation” originates and what provision of the Constitution forbids the acquisition of a property interest when the relevant legislation decrees otherwise. In effect, the majority’s holding announces a new and novel principle of state law, that when appropriate legislation vests discretion in a governmental body for a discrete period of time (here, thirty days) and then the same legislation divests that discretion after the prescribed time period has expired, that nevertheless somehow the discretion remains. The majority cites to no state, federal or statutory authority in support of this principle. Indeed, this is not surprising since the majority’s reasoning on this point directly conflicts with the established precedent of this Circuit. In Sullivan v. Town of Salem, supra, this court clearly stated:
... we did not intend to remove from constitutional protection every applica*925tion for a license or certificate that could, under any conceivable version of facts, be the subject of discretionary action; a theoretical possibility of discretionary action does not automatically classify an application for a license or a certificate as a mere “unilateral hope or expectation.” On the contrary, our standard was intended to be a tool capable of measuring particular applications to determine if the applicant had a legitimate claim of entitlement based on the likelihood that without the due process violation that application would have been granted.
Sullivan, 805 F.2d at 85.
When the ARB did not act, as it was bound to do within the stated 30 day time limit, RRI’s right to a building permit for the stage two construction became vested. No discretionary action of the ARB could divest that right or change that result. Indeed the record clearly reveals no evidence that the Village Code means anything other than what its plain language states. It is significant to me that although the majority opinion and the Southampton defendants baldly assert that § 116-32E. cannot create a property right simply because the time has expired, they point to no evidence, and can provide no legal citation supporting that proposition. If the law of this Circuit is to be consistently applied, it is evident to me that RRI’s application for a permit had a very “strong likelihood” of being granted, Yale Auto Parts, 758 F.2d at 59, given the fact that the ARB had been deprived of any discretion by its failure to act within thirty days.
My analysis is bolstered by the jury verdict which, under appropriate legal instruction from the district court, found that a property interest existed. I too am troubled by the fact that the district court found it necessary to submit the issue of whether there was a property interest to the jury rather than deciding that issue as a matter of law for the court.3 Nevertheless, the jury, with all of the evidence before it, including the Village Code in which § 116-32E. appears, found that RRI had a property interest warranting constitutional protection. It did so pursuant to the district court’s charge, which correctly set forth the relevant law in this area:
The property which plaintiff asserts it was deprived of is its asserted right to the issuance of the second stage building permit in order to continue building or construction.
In connection with this claim I instruct you that a property interest for the purposes of the Fifth and Fourteenth Amendments include not only things that we have an absolute right to, such as things we can own or possess out right [sic], but also such things as to which we have not simply a hope or expectation of acquiring, but a very strong likelihood of acquiring.
Accordingly, if you find by a preponderance of the evidence that there existed a very strong likelihood that but for a defendant denying the plaintiff due process of law, that the plaintiff would have obtained the building permit for second stage construction, then you may find that the plaintiff possessed a property interest in the issuance of the building permit.
(T. 2432).
Thus, even if the district court erred in submitting to the jury for determination, what would appear to be a matter of law, that error was obviously harmless because the jury reached the only result that it *926could reach in light of the undisputed fact that the Board had exceeded its permissible time limit when it failed to act on RRI’s application.
III.
I appreciate the reluctance of the majority to “become [a] zoning board of appeal in reviewing non-constitutional land use determinations made by the Circuit’s many local legislative and administrative agencies.” See Sullivan v. Town of Salem, 805 F.2d at 82 (2d Cir.1986). However, that reluctance, I suggest, must give way to the established law of this Circuit when the record discloses, as this record does, not only a “very strong likelihood” that a permit would have been granted, but as appears in this case, a “certainty” that it had to have been granted.
The linchpin in this case, as I have pointed out, was the failure of the ARB to act within the time prescribed by the Village Code. When that time expired, the right of RRI to a building permit vested and could not be defeated. The majority opinion fails to explain adequately why this right does not constitute a valid property interest protected under the Fourteenth Amendment. Nor does the majority give a reasoned explanation as to why, on the thirty-first day after the ARB failed to act, RRI did not have either a “certainty or very strong likelihood” that its application would have been granted. Yale Auto Parts, 758 F.2d at 59.
Of even greater importance is the fact that the majority opinion disregards this court’s prior pronouncement and holding in Sullivan v. Town of Salem, 805 F.2d 81 (2d Cir.1986), where the court recognized that an applicant had a legitimate claim of entitlement based on the likelihood that without the due process violation, the application would have been granted. The Sullivan court, in so holding, acknowledged that a mere theoretical possibility of discretionary action could not defeat an applicant’s property interest expectation. Sullivan, 805 F.2d at 85. Here, of course, we do not even have a theoretical possibility of discretion remaining in the ARB after the thirty day period had expired without the ARB having taken action. But even if such a theoretical vestige of discretion was retained by the ARB, under Sullivan that vestige or theoretical possibility would still be insufficient to defeat RRI’s property interest claim.
I am thus unable to reconcile the majority’s application of the Yale Auto Parts standard or the majority’s reading of Sullivan v. Town of Salem with this Circuit’s jurisprudence to date. The majority’s holding here can lead only to confusion in this area of the law. It is for that reason that I dissent. Contrary to the majority therefore, I would hold that RRI had a legitimate claim of entitlement to the issuance of its building permit — a claim constituting a property interest sufficient to invoke constitutional protection. I would affirm the judgment of the district court.

. Southampton, among other issues, objects to the imposition of municipal liability under 42 U.S.C. § 1983. While in my judgment the district court acted properly in allowing for recovery against the Village of Southampton, I note that the majority does not address that issue, just as it does not discuss other subsidiary issues. In light of that circumstance, I too confine my discussion only to the question: did RRI establish a property interest?

. An Article 78 proceeding is the means by which an aggrieved person can challenge the determination of a governmental or quasi-governmental body in New York State’s courts. The statute governing these proceedings is found in the NYCPLR §§ 7801-06. Dean Tarry actually brought two Article 78 proceedings. In the first, the New York Supreme Court ruled that Dean Tarry was entitled to approval, and ordered the Planning Board to approve the plan. However, the New York Appellate Division reversed and remanded the case to the Planning Board to make factual findings. See Dean Tarty Corp. v. Friedlander, 826 F.2d 210, 211 (2d Cir.1987). It is the subsequent proceeding after remand which is relevant here.

. The majority opinion treats this issue in a somewhat equivocal manner. Early in its opinion it states "In the view we take of the case, it becomes necessary to consider only the threshold issue of whether the evidence sufficed to create a jury issue as to whether RRI had a property interest in the stage-two permit." Maj. op. at 914. However, later in the majority opinion, the majority states: “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 application has a property interest will normally be a matter of law for the court.” Maj. op. at 918.