Substantive due process claims in the land-use context: the need for a simple and intelligent standard of review.

• Author: Mehrbani, Parna A.

When a municipal government denies a landowner's permit or zoning application, the landowner does not have a legitimate "takings" claim if the land is still economically viable. In this situation, an aggrieved landowner can bring a federal claim for violation of substantive due process under section 1983 of the Civil Rights Act for denial of her fundamental right to property. The federal circuits approach these claims in a variety of different ways, bug as illustrated by a recent Third Circuit decision, all the circuits are moving toward very strict standards of review that may eventually bar these cases entirely in federal court. Although federal courts' concerns of becoming "zoning boards of appeal" are legitimate, this Comment advocates for a standard of review that not only allows these eases to be heard in federal court, but recognizes the unique land-use context. This standard must balance the due process harm to the landowner against the legitimate government interest furthered by denial of the application.

1. INTRODUCTION II. CLAIMS UNDER SECTION 1983 A. Why Section 1983? B. The General Scope of Section 1983 C. Possible Claims Under Section 1983 1. Violation of the Equal Protection Clause of the Fourteenth Amendment. 2. Violation of Procedural Due Process Rights 3. Violation of Substantive Due Process Rights D. The Unique Land-Use Context E. The Voice of the Supreme Court in the Substantive Due Process Realm 1. Substantive Due Process and Executive Conduct that "Shocks the Conscience" 2. The Supreme Court's Recognition of a Landowner's Right to Substantive Due Process Protection III. THE THIRD CIRCUIT'S DECISION IN UNITED ARTISTS A. The United Artists Decisions and the Adoption of a Strict Standard of Review B. The Dissenting Opinions in United Artists 1. Judge Cowen's Dissent 2. Judge Nygaards Dissent C. Past Third Circuit Precedent in Land-Use Cases Under Section 1983 IV. AN OVERVIEW OF THE STANDARD OF REVIEW IN EACH CIRCUIT A. The Disagreement in General B. The "Irrational" Standard of Review: The First, Seventh and Eighth Circuits 1. The First Circuit 2. The Seventh Circuit 3. The Eighth Circuit C. The Entitlement Rule: The Second and Tenth Circuits 1. The Second Circuit 2. The Tenth Circuit D. The "Arbitrary and Capricious" Standard of Review: The Fourth Circuit E. The "Rational Basis" Standard of Review: The Fifth and Sixth Circuits 1. The Fifth Circuit 2. The Sixth Circuit V. THE IDEAL STANDARD AND RECOGNIZING THE UNIQUE LAND-USE CONTEXT A. A Standard of Review Hierarchy: From Most Strict to Least Strict B. A Potential Route to Agreement: The Need for a Simplified and Intelligent Standard of Review 1. Simplification: Getting Right Down to the Issue 2. Intelligence: Recognizing the Unique Land-Use Context C. A Workable and Familiar Standard of Review with a Twist 1. Back to Basics with Euclid: The "Arbitrary and Capricious" Standard of Review--Was the Action Based on a Legitimate Police Power Goal? 2. The Twist: Requirement to Exhaust State Remedies VI. CONCLUSION I. INTRODUCTION

   A movie theater company applies for a permit to build a theater in a small town. A year later, a competitor does the same. Eventually, the first applicant leaves town without having built at all, while the competitor's new theater is thriving. The cause of this discrepancy was, arguably, the first company's refusal to pay a $100,000 per year "impact fee" to the municipality. The discrepancy between the treatment of the first applicant and the competitor raises the serious constitutional question of whether the first applicant was denied substantive due process by the actions of the municipality. Substantive due process refers to the Fourteenth Amendment's prohibition of any government action that deprives "any person of life, liberty, or property, without due process of law." (1) The substantive component of the Due Process Clause of the Fourteenth Amendment "bars certain arbitrary, wrongful government actions 'regardless of the fairness of the procedures used to implement them.'" (2) The situation described above raises a substantive due process question because, although the municipality was working within its procedural boundaries, the outcome seems arbitrary or based on inappropriate facts--here, the "impact fee."

   When a municipal government denies a landowner's permit or zoning application, the landowner usually retains some economically viable use of the land--she is only precluded from using the land in the specific way in which she desires to use it. In such a case, there is no legitimate claim of a taking without just compensation because the land is still usable. (3) In these cases, the landowner who is aggrieved by the denial of her request can bring a federal claim of violation of substantive due process under section 1983 of the Civil Rights Act (4) for denial of her fundamental right to property. (5) Section 1983 creates a cause of action for any person whose federal constitutional or statutory rights are violated under color of state law by another person. (6) The United States Supreme Court has stated that local government units are "persons" for the purpose of section 1983 claims. (7) Under the Fourteenth Amendment, section 1983 may be the basis for claims that the landowner was deprived of property without substantive due process of law.

   Section 1983 claims for violation of substantive due process in land-use cases must have a distinct standard of review because the concerns in such cases are distinct. Although concerns of federal courts becoming "zoning boards of appeal" are relevant, since almost every decision by the appropriate zoning body will meet the "under color of state law" standard, these concerns should not create a bar on section 1983 claims in land-use eases.

   The approach of the federal circuit courts in section 1983 land-use cases is varied and muddied and must be synthesized in a way that prevents federal courts from becoming land-use boards of appeal, while still allowing for legitimate federal review of landowners' unique claims of violation of substantive due process. This Comment will evaluate the myriad standards of review in section 1983 land-use cases and suggest a standard specifically tailored to the land-use arena. This recommended standard will take into account the unique land-use context and recognize the importance of land ownership issues to the landowner and the community, rather than clumping land-use cases in the same category with other unrelated substantive due process claims.

   This Comment begins with a discussion of the Third Circuit's recent decision in United Artists Theatre Circuit Inc. v. Township of Warrington (United Artists) (8) to impose a strict "shocks the consience" standard, (9) and proceeds with a detailed exposition of the standards in each federal circuit, including a synthesis of the most important factors in the review process. This Comment then provides an overview of the inconsistency in the circuit courts and finally suggests some ways to develop a standard tailored to the land-use context.

   Part II discusses the situations in which section 1983 actions arise in the land-use context--primarily when a takings claim is unavailable and inappropriate. Part II continues with an explanation of the scope of section 1983 claims generally, concluding with a brief discussion of the importance of land ownership and the need to look at land-use cases in their own unique context. This discussion recognizes the importance of land-use decisions on both the individual landowner and the community, considering that local government decisions often involve disagreements between specific landowners and the surrounding members of the community.

   Part III takes a step-by-step approach to explain and analyze the Third Circuit's recent decision in United Artists to adopt the strict "shocks the conscience" standard of review and abandon its earlier precedent utilizing the broader "improper motive" standard. (10) This analysis includes a detailed fact statement compiled from the various decisions and an explanation of all the prior case history. In addition, since the United Artists decision was made explicitly in response to the Supreme Court's decision in County of Sacramento v. Lewis, (11) a criminal case involving a police chase and the resulting death of a motorcycle passenger, Part III includes an analysis of the Supreme Court's limited voice in this arena.

   Part IV analyzes the case law and standards of review in each of the federal circuits, discussing where the circuits agree, but mostly concentrating on the extraordinary variety that exists between circuits. An overall synthesis of the circuits shows that the law is getting stricter regarding section 1983 claims in land-use cases and seems to be moving toward the conclusion that a landowner does not have a legitimate section 1983 claim if all she alleges is that a city council or similar municipal body denied her application without a valid public purpose.

   Part V advocates a unique standard of review in section 1983 land-use cases. Simply adopting a generic standard for all substantive due process cases is not sufficient because it belittles the importance of land ownership. Ideally, a standard of review must consider both the unique interests of landowners and the motive of the decision-making body without concentrating on the "legislative" or "quasi-judicial-administrative" nature of that body's decision-malting process. The standard should also include a balancing of the due process harm to the landowner against the legitimate government interest furthered by denial of the application.

   Part VI concludes by recognizing that the Supreme Court must eventually resolve this inconsistency among the circuits and this resolution must take into consideration the unique nature of land ownership and land-use concerns.

2. CLAIMS UNDER SECTION 1983

   1. Why Section 1983?

      Under United States Supreme Court takings...