9th Circuit: Substantive Due Process in Land Use Cases (Armendariz is Still Dead)

Thanks to David Breemer at Pacific Legal Foundation for calling our attention to this recent Ninth Circuit case.  In North Pacifica, LLC v. City of Pacifica, No. 05-16069 (May 13, 2008), a northern California landowner claimed the city's delays in processing a condominium permit violated its substantive due process and equal protection rights.  The Ninth Circuit dismissed both of the claims, but reaffirmed that  Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc) is a dead letter. 

Armendariz held that in land use cases, the property owner was limited to regulatory takings, and could not assert other causes of action.  This had the effect of subjecting all federal constitutional claims related to property to the bizarre Williamson County ripeness rules, which require among other things that a takings claimant show she has been denied  compensation by the state before coming to federal court.  Armendariz thus forced property owners in the Ninth Circuit seeking to invalidate government actions as irrational to litigate exclusively in state courts, even though the Williamson County rule made even less sense when the property owner was not seeking compensation, but asserted that the government action did not "substantially advance a legitimate governmental interest."  After all, what would a denial of compensation accomplish when the property owner was not seeking compensation? 

After Lingle v. Chevron, U.S.A., Inc., 544 U.S 528 (2005) clarified that the "substantially advance" test was a substantive due process claim, the Ninth Circuit overruled Armedariz in Crown Point Dev., Inc. v. City of Sun Valley, 506 F.3d 851 (9th Cir. 2008), a case we blogged about here.  North Pacifica affirms that rule:

In Lingle, however, the Supreme Court concluded that a challenge to land use regulation may state a substantive due process claim, so long as the regulation serves no legitimate See Lingle, 544 U.S. at 542 (“[A] regulation that fails to serve any legitimate governmental objective may be so arbitrary or irrational that it runs afoul of the Due Process Clause.”). In a recent decision we said that “Lingle pull[ed] the rug out from under” Armendariz and we recognized possible bases for a substantive due process claim.  Crown Point Dev., Inc. v. City of Sun Valley, 506 F.3d 851, 855-56 (9th Cir. 2007). The irreducible minimum of a substantive due process claim challenging land use regulation is failure to advance any governmental purpose. Id. at 856. We said there is a due process claim where a “land use action lacks any substantial relation to the public health, safety, or general welfare.” Id. Such a claim cannot be remedied under the Takings Clause. Id.

North Pacifica, slip op. at 5367-68.  In North Pacifica, the district court had dismissed North Pacifica's substantive due process claims because it had not show that it had sought and been denied compensation through available state remedies, including a decision from the California courts. The Ninth Circuit held the district court was wrong and that after Crown Point, an owner alleging substantive due process need not pursue state compensation remedies.  However, the court affirmed the dismissal of the claim because the facts alleged in North Pacifica's complaint did amount to a due process violation. 

The complaint alleges no facts that suggest the termination was an arbitrary or capricious act, or unreasonable, in light of the absence of an agent who could pursue the development.

Slip op. at 5369-70.  The Ninth Circuit also reversed the district court's award of damages for equal protection violation.  The court held that the city did not intentionally treat the property owner differently from others, and affirmed the method of calculating damages

The measure of damages for an equal protection claim alleging that a discriminatory zoning decision temporarily deprived the plaintiff’s land of its  development potential is reasonable interest on the reduction in value to the  project created by the zoning decision, but only for the period of time the condition actually delayed the development of the project. See Herrington v. County of Sonoma, 12 F.3d 901, 905 (9th Cir. 1993).

Slip op. at 5371.  The court held that the delays in the property owner's project were not attributable to the city's conduct, but to the fact that Northern Pacifica had not yet received a permit from the California Coastal Commission.

The bottom line on the North Pacifica case:

• Armendariz: still dead.
• Land use substantive due process claims are viable in the Ninth Circuit, but the claim was not adequately alleged in this case.
• In equal protection claims under Village of Willowbrook v. Olech, 528 U.S. 562 (2000), the claimant must show the government "intentionally singled out" the plaintiff, and there must be actual damages resulting from the government's conduct.

Professor Patricia Salkin has posted a summary of the opinion here.  Read the complete opinion here.