Court Opinion

ID: 146498
Source: CourtListenerOpinion
Date Created: 2010-05-14 16:49:10+00
Date Added: 2024-06-11T09:41:17.760264
License: Public Domain

NOT PRECEDENTIAL

          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT
                     _________

                        No. 09-3204
                        ___________

      MARJAC, LLC, a New Jersey Limited Liability
    Company; DJF REALTY INC; MARIO LAVECCHIA;
                 JACK FIORENZA, JR.,
                                   Appellants

                              v.

       RICHARD TRENK, Esq., Township Attorney,
        Booker, Rabinowitz, Trent, Lubetkin, Tully,
      DiPasquale & Webster, P.C.; JOHN MCKEON,
    Mayor and Council for the Township of West Orange;
         SUSAN BORG, Planning Board Director,
    West Orange Building Dept; RUSSELL DESANTIS,
      Building Sub-Code Official, West Orange Health
     Dept.; JAMES MONTGOMERY, Health Inspector

                 _______________________

       On Appeal from the United States District Court
                  for the District of New Jersey
                    (D.C. No. 2-06-cv-01440)
      District Judge: Honorable Joseph A. Greenaway, Jr.
                 ________________________

         Submitted under Third Circuit LAR 34.1 (a)
                    on March 25, 2010

Before: RENDELL, FUENTES, and CHAGARES, Circuit Judges.

                    (Filed: May 14, 2010)
                               OPINION OF THE COURT

PER CURIAM

       The plaintiff-appellant real estate developers appeal the District Court’s order of

dismissal and grant of summary judgment in favor of defendant-appellee township

officials in this action for discriminatory enforcement of municipal zoning laws. For the

reasons set forth below, we will vacate the judgment as to plaintiff-appellants’ substantive

due process claims regarding one defendant-appellee, but affirm in all other respects.

                                             I.

       MARJAC, LLC, DJF Realty, Inc., Mario Lavecchia, and Jack Fiorenza, Jr.

(collectively, “the plaintiffs”), own real property and a liquor license in the Township of

West Orange, New Jersey (the “Township”). In September 2002, the plaintiffs undertook

development of Etcetera Restaurant and Flirt Nightclub “with the goal of establishing a

landmark destination featuring Essex County’s trendiest new restaurant, one of New

Jersey’s largest and most upscale nightclubs, and a first class catering business.” A61-

A62. The plaintiffs’ investment in the project exceeded $4 million, including $2.5

million borrowed from local banks under financing through the Small Business

Administration. In November 2002, the Township’s Planning Board granted approval

permits and zoning variances necessary to commence construction.

                                              2
       On June 16, 2004, by which time construction was 90% complete, the Township

issued the first of numerous Stop Work Orders citing material variances from the

approved plans. In particular, the Township claimed, inter alia, that: (1) as built, the

structure exceeded the approved site footprint, A136-A137; (2) the facility’s interior

contained partially installed, unapproved hydraulically-controlled “Sky Dance” boxes for

“motivational dancing,” A137; (3) the third floor contained an unapproved cat-walk and

“Jacuzzi-style tub,” A137; and (4) “Plaintiffs were in the midst of installing a trapeze at

the site, which [would] permit motivational dancers to swing back and forth apparently

like certain New York nightclubs,” A138. On February 2, 2005, following an

acrimonious dispute between the plaintiffs and the Township, the Planning Board

revoked the approval permits and zoning variances granted in 2002. A839.

       The plaintiffs claim that the Township, and in particular, the Township Attorney,

selectively and unlawfully enforced the zoning laws. They claim the Township Attorney

harbored personal animus against them, exhibited by his “egomaniacal rage,” A64, and

expressed antipathy toward their Italian heritage. The plaintiffs allege that, despite their

legitimate source of financing, the Township Attorney long suspected their project was

underwritten by “Mafia Money.” A64.

       The plaintiffs characterize the Township Attorney’s conduct as “the personal

vendetta of an out-of-control Napoleonic despot intent on running West Orange as his

personal fiefdom.” A62. They claim he personally inspected the construction site for

                                              3
violations, verbally harassed construction workers, and summoned the police to halt

construction. A65. The plaintiffs also claim the Township Attorney used his law firm’s

letterhead to solicit objections to their liquor license from Township residents, and sought

to impose unreasonable conditions on their license renewal (e.g., occupancy limits, early

closure). A66. The plaintiffs claim the Township Attorney recused himself from

participation in the plaintiffs’ Alcoholic Beverage Control hearing, but nevertheless

presided over the hearing, and did so without keeping minutes because “the recording unit

was unplugged.” A67. Finally, the plaintiffs claim the Township Attorney’s conduct was

anti-competitive, motivated by his law partners’ ownership of a competing restaurant

business. A68.

       The plaintiffs filed a ten-count complaint in state court alleging violations of 42

U.S.C. § 1983 and state law.1 In addition to the Township Attorney, the complaint named

the following defendants: (1) the Township Attorney’s law firm; (2) the Mayor of the

Township; (3) the Director of Planning Development for the Township; (4) the Building

Sub-Code Official for the Township Health Department; (5) the Township Health

Inspector; and (6) the Planning Board and Council of the Township (collectively, “the

       1
          The complaint alleged: (1) tortious interference with prospective economic
advantage; (2) tortious interference with contractual relations; (3) violation of civil rights
under 42 U.S.C. § 1983; (4) violation of civil rights under N.J. Stat. Ann. § 10:6-2(c); (5)
breach of fiduciary duty; (6) legal malpractice; (7) civil conspiracy; (8) intentional
infliction of emotional distress; (9) estoppel; and (10) racketeering under N.J. Stat. Ann. §
2C:41-2.

                                              4
defendants”). A61. The defendants removed the action to federal district court.

       The District Court, on the defendants’ motion to dismiss, held that the plaintiffs

failed to state a claim for legal malpractice or civil conspiracy,2 and found that the

plaintiffs abandoned their claims under the Takings Clause and Equal Protection Clause

by failing to oppose the defendants’ arguments for dismissal. A27-A29, A37-A38. The

District Court dismissed the Commerce Clause claim because the plaintiffs failed to

allege a burden on interstate commerce. A29. All other claims proceeded to discovery,

after which the plaintiffs voluntarily withdrew their claim for intentional infliction of

emotional distress.

       While this action was pending, the plaintiffs reconsidered their refusal to seek

approval from the Township and submitted an amended development proposal for review

by the Planning Board. On April 1, 2009, following six public hearings, the Planning

Board approved the plaintiffs’ amended plans, including the enlarged site footprint, Sky

Dance boxes,3 and catwalk.

       2
         The court dismissed the legal malpractice claim because the plaintiffs failed to
allege an attorney-client relationship with the Township Attorney. A37. The court
dismissed the civil conspiracy claim because the plaintiffs “failed to allege that any of the
Defendants were acting outside of their official capacity when they engaged in the alleged
conduct” and “Defendants, acting as agents and employees of West Orange, cannot
conspire among themselves.” A38.
       3
         In its written Findings of Fact and Conclusions of Law, the Planning Board
stated: “Since not all motivational dancers qualify as ‘go go entertainers’ the use of
motivational dancers does not alone transform the use into a ‘sexually oriented business’
as defined in the ordinance. This finding was underscored by Applicant’s testimony that
the dancers would have no sexual contact with patrons.” A614.

                                              5
       On July 14, 2009, the District Court granted summary judgment in favor of the

defendants on all of the remaining claims. The plaintiffs filed this timely appeal.

                                              II.

       The District Court had jurisdiction under 28 U.S.C. § 1331. This Court has

jurisdiction under 28 U.S.C. § 1291.

       We exercise plenary review over the District Court’s dismissal under Federal Rule

of Civil Procedure 12(b)(6). See Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d

187, 190 (3d Cir. 2009). We must “‘accept all factual allegations as true, construe the

complaint in the light most favorable to the plaintiff, and determine whether, under any

reasonable reading of the complaint, the plaintiff may be entitled to relief.’” Grammar v.

John J. Kane Reg’l Ctrs.-Glen Hazel, 570 F.3d 520, 523 (3d Cir. 2009) (quoting Phillips

v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)).

       We review the District Court’s grant of summary judgment de novo, applying the

same standard that it used. Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008).

We view the evidence in a light most favorable to the plaintiffs and draw all justifiable,

reasonable inferences in their favor, id., but “[t]he mere existence of a scintilla of

evidence in support of the plaintiff’s position will be insufficient; there must be evidence

on which the jury could reasonably find for the plaintiff.” Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 252 (1986). We will affirm if “there is no genuine issue as to any

material fact” and the defendants are entitled to judgment as a matter of law. Fed. R. Civ.

                                               6
P. 56(c).

                                              III.

                                              A.

       The plaintiffs appeal the District Court’s dismissal of their Commerce Clause and

legal malpractice claims under Federal Rule of Civil Procedure 12(b)(6).

                                               1.

       The District Court dismissed the Commerce Clause claim because the plaintiffs

failed to allege a burden on interstate commerce. A27. To state a claim under the

Commerce Clause, U.S. Const. art. I, § 8, cl. 3, a plaintiff must demonstrate that the

challenged state regulation “has extraterritorial effects that adversely affect economic

production (and hence interstate commerce) in other states” or “the object of the law is

local economic protectionism, in that it disadvantages out-of-state businesses to benefit

in-state ones.” Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 462 F.3d

249, 261-62 (3d Cir. 2006) (alterations and quotations omitted). Alternatively, a plaintiff

may state a claim by demonstrating that “the burden imposed on [out-of-state] commerce

is clearly excessive in relation to the putative local benefits.” Id. at 263.

       The plaintiffs argue that the Commerce Clause precludes the Township from

enforcing its municipal zoning laws because the plaintiffs’ development involves

elements of interstate commerce (e.g., construction workers, transportation vehicles, and

commercial financial transactions) and the Township’s conduct is motivated by

                                               7
protectionist sentiment. However, the plaintiffs’ terse argument fails to explain how the

Township discriminated against out-of-state commerce or served to protect in-state

economic activity. If anything, the Township’s regulation adversely affected in-state

economic activity by delaying construction and eventual opening of the plaintiffs’

business. The District Court properly dismissed the Commerce Clause claim under Rule

12(b)(6).

                                             2.

       The District Court dismissed the legal malpractice claim because the plaintiffs

failed to allege an attorney-client relationship with the Township Attorney. A37. Under

New Jersey law, “attorneys may owe a duty of care to non-clients when the attorneys

know, or should know, that non-clients will rely on the attorneys’ representations and the

non-clients are not too remote from the attorneys to be entitled to protection.” Petrillo v.

Bachenberg, 655 A.2d 1354, 1359-60 (N.J. 1995).

       The plaintiffs argue they have properly alleged a duty of care because the

Township Attorney owed them fiduciary duties in his capacity as Township Attorney.

However, the complaint fails to allege any legal advice or representation rendered by the

Township Attorney on which the plaintiffs detrimentally relied. The duty of care on

which the plaintiffs rely arises from the Township Attorney’s position as a government

official, not his dispensation of legal advice to a non-client. The District Court properly

dismissed the legal malpractice claim under Rule 12(b)(6).

                                              8
                                             B.

       The plaintiffs appeal the District Court’s grant of summary judgment in favor of

the defendants on their claims for violation of civil rights under 42 U.S.C. § 1983 and

N.J. Stat. Ann. § 10:6-2(c), tortious interference, breach of fiduciary duty, estoppel, and

racketeering.

                                             1.

       The plaintiffs’ claims under 42 U.S.C. § 1983 and N.J. Stat. Ann. § 10:6-2(c)

allege violation of substantive due process. Acting under color of local zoning laws, the

defendants allegedly engaged in conduct “not reasonably related to a legitimate

government interest,” “in fact motivated by religious bias and improper motive,” and “in

and of itself, egregiously unacceptable and outrageous.” A72.

       Civil liability for violation of substantive due process arises from “only the most

egregious official conduct . . . .” County of Sacramento v. Lewis, 523 U.S. 833, 846

(1998). Such conduct must shock the conscience. Id. “[C]onduct intended to injure in

some way unjustifiable by any government interest is the sort of official action most

likely to rise to the conscience-shocking level.” Id. at 849. “Since Lewis, our cases have

repeatedly acknowledged that executive action violates substantive due process only

when it shocks the conscience but that the meaning of this standard varies depending on

the factual context.” United Artists Theatre Cir. v. Twp. of Warrington, 316 F.3d 392,

399-400 (3d Cir. 2003). In Eichenlaub v. Twp. of Indiana, for example, we held that

                                              9
selective enforcement of zoning laws did not violate substantive due process because the

township’s conduct was not motivated by corruption or racial discrimination. 385 F.3d

274, 286 (3d Cir. 2004) (“The local officials are not accused of seeking to hamper

development . . . because of some bias against an ethnic group.”).

       Here, the plaintiffs properly allege a violation of substantive due process because

they claim the Township Attorney’s selective enforcement was motivated by antipathy

toward their Italian heritage. Depending on the gravity, context, and surrounding

circumstances, selective enforcement motivated by ethnic bias may constitute arbitrary

conduct capable of shocking the conscience. However, the District Court granted

summary judgment because it found the plaintiffs failed to substantiate the allegations of

ethnic bias.4

       On appeal, the plaintiffs argue the District Court erred because the evidence of

record contained testimony about the Township Attorney’s anti-Italian statements.

Numerous witnesses deposed in this matter testified that they heard the Township

Attorney state that the plaintiffs were connected to the Mafia and had financed the

       4
          The District Court explained, “Plaintiffs offer no additional statement, evidence,
or proof that Defendants acted arbitrarily and capriciously to deprive them (Plaintiffs) of
a property interest or that Defendants acted out of clear bias against Plaintiffs’ Italian
heritage. . . . . Plaintiffs offer only conjecture and unsupported allegations in support of
their claims that Defendants’ conduct in enforcing zoning regulations ‘shocks the
conscience.’ . . . . This Court finds that Defendants’ conduct does not shock the
conscience since Defendants were merely exercising their discretion and authority to
enforce zoning laws, which Plaintiffs had clearly violated.” A14-A15.

                                            10
development with Mafia money. See, e.g., A723. Although the Township Attorney’s

statements about the plaintiffs’ purported Mafia connections, standing alone, are not per

se evidence of ethnic bias, one witness testified that the Township Attorney made

“general comments that Italians aren’t the best of people, they’re connected to the mob”

in a conversation regarding the plaintiffs. A748. This testimony, if credible, creates an

evidentiary connection between the Township Attorney’s selective enforcement of the

zoning laws and his antipathy toward the plaintiffs’ Italian heritage.

       While we offer no opinion as to whether the plaintiffs’ allegations against the

Township Attorney could be proven at trial, for purposes of summary judgment,

plaintiffs’ presentation of evidence that the Township Attorney’s selective enforcement of

municipal zoning laws was motivated by antipathy toward Italians – conduct which may

shock the conscience – creates a genuine issue of material fact sufficient to survive

summary judgment. The District Court, therefore, erred in granting summary judgment in

favor of the Township Attorney on the plaintiffs’ substantive due process claims under 42

U.S.C. § 1983 and N.J. Stat. Ann. § 10:6-2(c). However, the District Court properly

granted summary judgment in favor of all other defendants in this action because the

plaintiffs offered no evidence of conscience-shocking conduct by those parties.

                                             2.

       The remaining state law claims for tortious interference, breach of fiduciary duty,

                                             11
estoppel, and racketeering are not cognizable because, as the District Court held, the

Township was within its rights to enforce its municipal zoning laws.5 As built, the

plaintiffs’ development failed to comply with the approvals and variances granted by the

Planning Board, so the Township’s efforts to prevent the plaintiffs from further violating

the zoning laws cannot give rise to liability. Indeed, the Township identified several

legitimate concerns about the dance equipment installed by the plaintiffs and the intended

use for the facility.

       As outlined above, if the Township Attorney selectively enforced the zoning laws

because he harbored antipathy toward the plaintiffs’ ethnicity, then he may be liable for

depriving the plaintiffs of substantive due process under color of state law. But his

alleged misconduct did not operate to cure the plaintiffs’ zoning violations. The plaintiffs

cannot recover damages from Township officials for their justifiable enforcement of local

law.

                                            IV.

       For the foregoing reasons, we will vacate the grant of summary judgment in favor

of Township Attorney Richard Trenk on the substantive due process claims (Counts III

and IV) and affirm in all other respects. The action will be remanded for trial.

       5
         The plaintiffs maintain they are entitled to relief under the doctrine of equitable
estoppel, but concede that “[e]quitable relief is no longer at issue, as Appellees finally
granted Appellants[’] use by Resolution dated April 1, 2009 . . . .” Appellants’ Br. 2.
This concession is a proper basis to affirm summary judgment on the estoppel claim, even
though the defendants did not assert this point on appeal.

                                            12