Real Estate & Property Law

Ninth Circuit: City's (Alleged) Failure to Enforce the Zoning Code Is Not A Substantive Due Process Violation (Oh, And Armendariz is Still Overruled)

By Robert Thomas (inversecondemnation.com)

In Shanks v. Byrd, No. 06-35665 (Aug. 27, 2008), the Ninth Circuit held that a municipality's alleged failure to enforce its zoning laws was not a violation of the Fourteenth Amendment.

Developers who convert homes into student residents apparently did not obtain all of the appropriate permits from Spokane, Washington to remodel a portion of a house in the city's Mission Avenue Historic District.  The city issued a building permit, but the Spokane zoning code requires additional permissions when historic landmarks are involved, and the developers did not seek or obtain a "certificate of appropriateness" or an "administrative special permit" from the city's Historic Landmark Commission.  The city did not object, and took no steps to require the permits.

A group of neighbors and community organizations sued the property owners and the city, alleging the city's failure to enforce the zoning code was a violation of their due process rights and a violation of a federal civil rights statute (42 U.S.C. § 1983), and violated the National Historic Preservation Act and the Spokane zoning code.  The district court dismissed the complaint for failure to state a claim, and the Ninth Circuit affirmed. 

Relying on Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996), the city first claimed the due process claims were preempted by the Takings Clause.  The city asserted that the plaintiffs' claims that the city's action in not enforcing the zoning code caused a diminution in the value of the plaintiffs' property was a "takings" claim that must be asserted under the Fifth Amendment.  The court rejected the argument, noting that Armendariz was overruled in Crown Point Dev., Inc. v. City of Sun Valley, 506 F.23d 851 (9th Cir. 2007) (a decision we discussed here and here):

Expressly repudiating Squaw Valley's suggestion that a "substantive due process challenge brought in the context of regulating use of real property might not be viable," we recently held that "the Armendariz line of cases no longer can be understood to create a blanket prohibition of all property-related substantive due process claims."

Slip op. at 11834 (citing Action Apartment Ass'n, Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020, 1025 (9th Cir. 2007)).  The court noted that the plaintiffs were not seeking just compensation, but an invalidation of the land use action that was alleged to be "arbitrary and capricious." 

The court disposed of the substantive due process claim by first determining that the developers were not acting under color of state law, and the city had done nothing -- except, perhaps, failing to protect the plaintiffs from the negative consequences of the development -- that could be said to be "state action."  Slip op. at 11836.  Further, the court held that the failure to enforce the law was not "egregious official conduct" or an "abuse of power."  Id. at 11837.  "There is no evidence of a sudden change in course, malice, bias, pretext or indeed, anything more than a lack of due care on Spokane's part."  Id. at 11838.

Addressing the procedural due process claim, the Ninth Circuit held that the plaintiffs did not have a protected property interest in the proper application of the city's zoning code, because the code does not contain mandatory language constraining the city's conduct:

Logan Neighborhood does not have a legitimate claim of entitlement to the denial of the Dressels' permit in accordance with the historic preservation provisions.

Id. at 11841.  The Ninth Circuit summarily rejected the plaintiffs' NHPA argument because that statute does not create a private right of action.  The court also rejected the plaintiffs' state law claims for lack of a substantial federal question.

Read the full decision here.  Our thanks to Honolulu attorney Andy Beaman for alerting us to this case. 

Full post as published by inversecondemnation on August 28, 2008 (boomark / email).