Lands Letter - 05/10/2006 (Plain Text Version)

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In this issue:
Third Circuit Court Issues Decision Involving Substantive Due Process Claims
Supreme Court Forwards Federal Rule Amendments to Congress
Nebraska Supreme Court Upholds Impact Fee Ordinance
State Court Rulings on Impact Fees
New Jersey Supreme Court Hears Argument on Eminent Domain
Eminent Domain Decisions Around the Nation
Recent State Legislative Activity on Eminent Domain Bills
NAHB’s Eminent Domain Toolkit Now Available
Florida Inclusionary Zoning Case to Watch
City in Texas Finally Settles Long-Running Downzoning Case
Miscellaneous Federal Court Updates
Miscellaneous State Court Updates
Federal & State Legislative Updates
Oral Argument Transcripts From 3 Supreme Court Wetlands Cases
Fourth Circuit Denies Appeal Under IQA Finding No Standing
Welcome New LANDS Members
17th Annual LANDS Roundtable & Workshop a Great Success!
From the Editor
Contact the NAHB Legal Staff

Third Circuit Court Issues Decision Involving Substantive Due Process Claims

The Third Circuit issued a decision last week examining a host of claims including equal protection, takings, and substantive due process. See County Concrete Corp. v. Township of Roxbury, 442 F.3d 159 (3rd Cir. March 31, 2006).

A New Jersey Township rezoned the plaintiff’s land, which had been zoned and used as industrial for close to 50 years, to either Rural Residential or Open Space which would allow only single family detached dwellings on lots having a minimum of three acres. The plaintiff sued in federal court bringing facial attacks on the ordinance, claiming that it constituted a taking and a violation of its right to substantive due process and equal protection. It also claimed that actions taken by various Township representatives prior to the enactment of the ordinance violated the plaintiff’s right to substantive due process. The District Court granted a motion under Rule 12(b)(6) and dismissed the action on the ground that none of the claims were ripe for adjudication.

The Court of Appeals reversed, holding that the finality prong of Williamson County did not apply to facial attacks on the ordinance whether based on a takings, the substantive due process clause or the equal protection clause. Moreover, the allegations of pre-ordinance enactment harassment also satisfied the finality prong.

The Court also held that the exhaustion of state compensation remedies required by Williamson County did not apply to either the substantive due process or equal protection claims. The District Court had properly dismissed the takings claim on that basis but, after the motion to dismiss had been granted, state court litigation claiming a taking had terminated, thereby ripening the takings claim under Williamson County.

There was no mention of the decision in the San Remo Hotel case.

The Court then reached the merits of the substantive due process and equal protection claims. Most importantly, the Court held that the “shocks the conscience” test adopted in the United Artists case applied only to executive actions; the test for liability for a legislative action was whether that action was arbitrary or irrational. The Court cited New Jersey law which holds that a rezoning is a legislative action.

The Court affirmed the dismissal of the equal protection claim because the complaint’s conclusory allegations did not meet the test of pleading facts which showed that the rezoning irrationally and arbitrarily discriminated against the plaintiff’s property in a way which did not affect “similarly situated property.”

Finally, the Court set out the test in the Third Circuit for a determination whether absolute legislative immunity applied:

“1. The action must be substantively legislative, which requires that it involve a policymaking or line-drawing decision; and

2. the action must be procedurally legislative, which requires that it be undertaken through established legislative procedures.”

The Court also stated that:

“when zoning officials are enacting or amending zoning legislation, their acts are substantively legislative, and when they are enforcing already existing zoning laws, their acts are administrative, executive, or ministerial. Aiding this analysis should be an evaluation of how many people are affected by the official conduct. Acts affecting the entire community tend to be substantively legislative, while acts affecting only one or a small number of individuals implicate executive or administrative action.”

Nevertheless, even though the rezoning apparently affected only the plaintiff’s land the Court held that the defendants who were responsible for enacting the rezoning ordinance had absolute legislative immunity. In reaching this result, the Court looked to New Jersey law which holds that rezoning is a legislative act. That legislative immunity did not, however, apply to actions taken prior to the adoption of the ordinance which were unconnected to its adoption even though the some of the defendants involved were members of the Town Council.

Mr. Bley can be reached at kbley@coxcastle.com