Are rumors of the demise of the Ninth Circuit’s Armendariz doctrine greatly exaggerated, or is J.J. Hunsecker (Burt Lancaster)’s advice to Sidney Falco (Tony Curtis) in the noir classic Sweet Smell of Success more appropriate?
What brings this to mind is the parting shot in the recently-issued opinion in Matsuda v. City and County of Honolulu, No. 06-15337 (Jan 14, 2008), where the Ninth Circuit panel — in a case involving a Contracts Clause claim which was brought together with a substantive due process claim — added:
Furthermore, we express no opinion as to whether our decision in Armendariz v. Penman,75 F.3d 1311 (9th Cir. 1996) (en banc), precludes the Lessees fromasserting a substantive due process claim in this case, where theContracts Clause provides a specific source of constitutionalprotection against the government conduct of which they complain. Id. at 1318.
Slip op. at 411. This looks like an attempt to resurrect theArmendariz rule, recently put to rest by a different panel of the NinthCircuit in Crown Point Development, Inc. v. City of Sun Valley, No. 06-35189 (Nov. 1, 2007).
Armendariz stood for the proposition that a propertyowner’s claim for violations of substantive due process rights were”subsumed” within the owner’s claim for violation of the TakingsClause. Thus, in land-related issues, a property owner could onlybring takings claims. The reasoning behind the rule was that when government conduct is proscribed by an “explicit textual source of constitutional protection” such as the Takings Clause, a plaintiff must rely on that source, not the due process clause. But as the Ninth Circuit held in Crown Point:
As the Court made clear, there is no specific textual source in the Fifth Amendment for protecting a property owner from conduct that furthers no
legitimate government purpose. Thus, the Graham rationale nolonger applies to claims that a municipality’s actions were arbitraryand unreasonable, lacking any substantial relation to the publichealth, safety, or general welfare.
Crown Point, slip op. at 14457-58. The Contracts Clause protects different interests than due processprotections. Substantive due process protects against arbitrary andunreasonable government conduct, while the Contracts Clause does notdeal with the reasons for government conduct, it simply prohibitsstates from passing laws impairing the obligations of contract,reasonable or not. The dicta in Matsuda should not get far.