Daily Development for Thursday, March 27, 2003
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
dirt@umkc.edu

ZONING AND LAND USE; CONSTITUTIONAL LAW:   City's
submission of a zoning matter to referendum as requested by a citizen
petition consistent with a provision of the city charter (which provision is
later nullified by a State Supreme Court ruling) does not constitute a
violation either of Constitutional Equal Protection or Substantive Due
Process, even if the motivation for the petition and the referendum vote
is racial discrimination on the part of the citizens participating in the
process.

City of Cuyahoga Falls v. Buckeye Community Hope Foundation,
2003 WL 1477301 (U.S. 3/23/2003)

The Sixth Circuit opinion in this case was discussed and excoriated in the
Dirt Daily Development for 9/6/01.  The facts here are derived in part from
that opinion.  Builder proposed to develop a low income housing project in
an area properly zoned for that activity.  The City ordinance required that
the Planning Commission review projects of this size and scope for
compliance with city ordinances and submit the proposal to the City
Council for approval by ordinance.  The Planning Commission indeed did
approve the project, subject to satisfaction of nine conditions,  and sent the
proposal  forward.

At the Council, however, the proposal met with stiff opposition from citizen
testimony.  Arguably some of the testimony, and some of the comments by
the Mayor, at least, indicated that opposition to the proposal was racially
motivated or reflected a bias against families.  (This is only an arguable
proposition, but the court assumed it was true for purposes of passing on the
summary judgment for defendant City granted by the trial court.)

Notwithstanding this opposition, the Council ultimately did adopt an
ordinance approving the project within less than a month after it first
reviewed it.

The City Charter provided that any ordinance of the City Council could be
subjected to a referendum if a sufficient petition were filed within 30 days
of passage.  In the event of such petition, the effectiveness of the ordinance
would be stayed, and would become effective only if approved in the
referendum.  A timely petition, not signed by any members of the City
Council, was presented.  The Sixth Circuit opinion did  not indicate whether
any of those who evinced, through their comments at a City Council
meeting, a racial or anti-family bias signed the petition, or, if so, whether
their signatures were necessary to meet the minimum required number of
signatures.

The City Building Commissioner then refused to carry out the ordinance
and issue the building permit for the project until the referendum issue was
resolved.  Builder promptly obtained an injunction of the referendum
pending a determination of whether it was valid.  Within only a few months,
the Ohio Supreme Court, after first confirming the validity of the
referendum process, reversed itself on rehearing and concluded that the
referendum, although required by the City Charter, was in violation of the
Ohio Constitution.  That Constitution permits referenda on City legislative
actions, but not, in the view of the court, on administrative actions.  Since
the City's action here was purely administrative  a simple determination of
whether the project satisfied existing zoning standards, no referendum was
possible.

Thus, presumably, the project could go ahead.  But wait  there's more.

During the months intervening between the referendum petition and the
ruling of the Ohio Supreme Court, Builders filed a massive lawsuit in
federal court against the City under Section 1983 for violation of Equal
Protection Clause and Substantive Due Process guarantees and under the
Federal Fair Housing Act for interference with housing opportunity on the
basis of race and family status.  The defendants are described as "The City
of Cuyahoga Falls et al," so we don't know exactly who else was named.
As indicated above, the federal district court magistrate to whom the case
was submitted recommended the granting of summary judgment for the
defendants, but the district court trial judge originally assigned the case
disagreed and denied the motion for summary judgment.  The case was later
reassigned, the motion renewed, and granted.  The  Sixth Circuit, reversed
and remanded, thus denying summary judgment for the City.

Virtually the entire Sixth Circuit opinion discussed the potential liability of
the City, although there may be a little discussion of a special place for the
Mayor, who, understandably, did get himself caught up with the zeal of the
citizenry opposing the proposal and openly supported the referendum
petition drive.

In discussing the Equal Protection Clause claims, the Sixth Circuit noted
that because of the special sensitivity of racial discrimination, the
presumption of validity normally granted to public agency actions would
not apply.  A different standard is used, even when it is not certain that
racial factors were the sole motivation for such actions:

     "Rarely can it be said that a legislative or administrative body
     operating under a broad mandate made a decision motivated solely
     by a single concern, or even that a particular purpose was the
     "dominant" or "primary" one. In fact, it is because legislators and
     administrators are properly concerned with balancing numerous
     competing considerations that courts refrain from reviewing the
     merits of their decisions, absent a showing of arbitrariness or
     irrationality. But racial discrimination is not just another competing
     consideration. When there is proof that a discriminatory purpose has
     been a motivating factor in the decision, this judicial deference is no
     longer justified."

Here is the nub of the Sixth Cirucuit discussion, which pretty much
demonstrates how the rest of the opinion will go:

     "[The District Court] held that the defendants did not exhibit racial
     bias in denying plaintiffs the benefit of the City Council approved
     site plan and withholding the building permits because the
     defendants were simply following the City Charter which required
     them to stay the effectiveness of any ordinance that is subject to a
     referendum. This analysis begs the question of whether the public
     opposition to the housing project was animated by racial bias and
     whether City officials improperly gave effect to that racial bias by
     allowing the fate of the project to be decided by referendum."

In other words, if the City Council determined somehow that a sufficient
number of people who put their names on the petition did so because of
racial bias, then it was obligated to ignore the specific language of the City
Charter and grant a building permit under an ordinance specifically
suspended from operation by the terms of the Charter.

     "Private biases may be outside the reach of the law, but the law
     cannot, directly or indirectly, give them effect.");  . . [I]t is enough
     for the complaining parties to show that the local officials are
     effectuating the discriminatory designs of private individuals." So,
     the question here is whether the plaintiffs produced sufficient
     evidence to raise a genuine issue of material fact as to whether the
     City officials gave effect to a referendum that was motivated, in
     part, by racial bias."

The court started with the fact, hard to contest, that denial of a permit for
low income housing operates disproportionately to the detriment of racial
minorities.  But that's not enough.  The denial must be motivated by racial
bias.  Here, the court pointed to the fact that no other housing development
petition had ever before been the subject of a referendum petition.  It further
excerpted a few quotes from what must have been hours of  testimony at the
various Council proceedings to support the conclusion that there was a
colorable case that racial bias existed in the City of Cuyahoga and
motivated some of those who opposed the housing project.  Again, not a
particularly surprising finding.

 From this (and very little more  really), the court reached the following
conclusion:

     "At bottom, the circumstances surrounding the opposition to the
     project, including the comments mentioned above, at least, raise a
     genuine issue of material fact as to whether the City, in rejecting the
     ordinance which approved the site plan, gave effect to the racial bias
     of its citizens."

The Court made no effort to itself establish that those who signed the
petition that implemented a clear provision of the City Charter denying
effect to the ordinance had a racial bias.  Nor did  it suggest how the City
Council or the Building Director might have made such a determination.
It apparently mattered not who was responsible for the petition, and what
motivated them, so long as there were some loud citizens in Cuyahoga who
were biased against minorities.  This was not necessary, the Sixth Circuit
opinion  suggested, because the City knew who was "behind" the
referendum petition and why they promoted it.

As the acid that drips from the above description makes plain, the editor
enthusiastically hated this opinion.  Although he can claim no influence
with the United States Supreme Court on these issues, the editor is pleased
to report that the Court agreed to him and unanimously reversed the Sixth
Ciruit in a brief  opinion written by Justice O'Connor that basically said
"get real."

Justice O'Connor pointed out that the provisions of the City Charter were
facially neutral, and required that a referendum be order when a satisfactory
petition was filed against an ordinance, and that the ordinance be
suspended.  There was no indication that the City Charter provisions were
motivated by or carried out any racial bias in general.  The Supreme Court
notes that there was no evidence that the city council followed the
obligations of the charter because of racial motivation or that the council
had selectively refused to follow standard charter procedures in other cases.
One would assume that city councils, in most cases, would abide by the
specific language of their charter.  In fact, the issue on which the
referendum was finally overturned by the Ohio Supreme Court was not
necessarily a clear point of law.  The Ohio Supreme Court first upheld the
referendum, and then reversed itself on rehearing, concluding that the Ohio
Constitution permitted referenda only on legislative determinations and not
on administrative acts.

The Supreme Court noted that the action at issue in this damages claim was
not the referendum itself, but the decision to submit the ordinance to a
referendum.  Although evidence of discriminatory intent might be relevant
if the issue were whether the referendum were a breach of Constitutional
rights, there was insufficient evidence that the submission to referendum
was tarnished by that intent.  Indeed, the Court noted, the use of the
referendum process actually contributes to democratic process and free
speech, both of which are consistent with Constitutional ideals.

Perhaps the most intriguing part of the opinion is the dicta in part III,
discussing the substantive due process issue,  and the response in the
concurrence by Justice Scalia.  Basically, the dictates of substantive due
process would be that property cannot be taken away by arbitrary
government action. This issue is entirely apart from questions of Equal
Protection.  The Court noted that the issue arose here as to whether there
was in fact a property interest at stake in the building permit entitlement.
This is an issue that many would like to see clarified.  The Court concludes
that it was not necessary to reach that issue in this case because even if there
was a property interest in the granting of the permit, the City Council did
not act arbitrarily in refusing to approve the permit in the face of the
referendum petition.  Although the "substantive result" of a referendum
might be challenged as an arbitrary government action, the fact of
submitting an issue to referendum as required by a City Charter cannot be.
Makes sense to this editor.

But then we have Justice Scalia's concurrence, in which he notes that in his
view (in which Justice Thomas joined), even if the city council's action
could be viewed as arbitrary, there might be no breach of substantive due
process.

     "It would be absurd to think that all 'arbitrary and capricious
     government action violates substantive due process - even, for
     example, the arbitrary and capricious cancellation of a public
     employee's parking privileges. [Substantive due process] protects,
     we have said, certain "fundamental liberty interests" from
     deprivation by the government, unless the infringement is narrowly
     tailored to serve a compelling state interest. . . Freedom from delay
     in receiving a building permit is not among these "fundamental
     liberty interests. . . . Mere regulation of land use need not be
     "narrowly tailored" to effectuate a "compelling state interest."
     Those who claim 'arbitrary' deprivations of nonfundamental liberty
     interests must look to the Equal Protection clause . . . [precedent]
precludes the use of 'substantive due process' analysis when a more
     specific constitutional provision governs."

Comment: Although the editor concurs fully with the majority opinion, he
is a bit more cautious in embracing the hard rule that Justice Scalia
proposes. Is the analogy to arbitrary denial of  individual employee parking
permits a good one?  Here was a major real estate project, and it is well
known that such projects frequently are delicately balanced on financing
considerations.  Delay in implementation often will lead to a fatal increase
in costs, or loss of a committed interest rate, or loss perhaps of a critical
investor who must turn elsewhere to obtain desired tax benefits.
Consequently, a building permit may seem a mundane thing, but the
consequences of the delay in granting one can be considerable.  Shouldn't
the question of whether a "fundamental liberty interest" is at stake focus on
the potential consequences of the challenged governmental caprice, and not
the nature of the capricious decision itself?  Even denial of a parking permit
might be a denial of a fundamental liberty interest if the likely consequence
would be that a disabled employee was thereby unable to gain access to a
desired work opportunity or medical treatment.

Comment 2:  Some land use mavens are upset about the primary opinion as
well.  The moderator of the Land Use Listserv commented:

     "It seems to be that this decision almost puts a halt on substantive
     due process land use claims.  I read its citation to the Sacramento
     decision as endorsing a "shocks the conscience" test which will very
     difficult to plead, let alone prove."

Dan Mandelker, a leading academic, however, commented: "I don't think
it's that so much as the almost absolute protection of the referendum
process."  The editor is more comfortable with this analysis.

Comment 3: These issues were recently discussed on DIRT in the DD report
for 1/03/03: United Artists Theatre Circuit, Inc. v. Township of Warrington,
2003 WL 115585 (3rd Cir. 1/14/2003) (Although claim for breach of
substantive due process rights by planning officials  overcomes their
qualified immunity defense, plaintiff must show that planning officials'
behavior "shocks the conscience" rather than simply that the challenged
decisions were based upon "improper motive.")

In this regard, another  commentator on the Land Use list said:

     "I fully agree that the Court is saying that the federal courts should
     not treat every land use matter as if it were equivalent to a beating;
     it's going to be even now tougher to win sec. 1983 cases then it was
     before Buckeye.  However, the Court cited the "only most
egregious"language from Lewis and not the shocks the conscience
     language.  I don't see it as impliedly endorsing the Third Circuit's
     United Artists opinion. Compare the language in McKinney v. Pate,
     20 F.3d 1550, 1556 (11th Cir.1994), which states that the shocks the
     conscience test has no application to a civil action for money, and
     Pearson v. City of Grand Blanc, 961 F.2d 1211, 1222 (6th Cir.
     1992)("we would not expect a planning commission to be pumping
     the landowner's stomach.").  See also the dissent in United Artists."

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