Brookwood v. City of Ridgeland

Case: 24-60017 Document: 57-1 Page: 1 Date Filed: 11/20/2024

United States Court of Appeals

for the Fifth Circuit United States Court of Appeals

Fifth Circuit

____________ FILED

November 20, 2024

No. 24-60017 Lyle W. Cayce

____________ Clerk

Brookwood Development, L.L.C.,

Plaintiff—Appellant,

versus

City of Ridgeland, Mississippi; Gene F. McGee, in his

individual capacity; D. I. Smith, in his individual capacity; Ken Heard,

in his individual capacity; Chuck Guatier, in his individual capacity;

Kevin Holder, in his individual capacity; Brian Ramsey, in his

individual capacity; William Lee, in his individual capacity; Wesley

Hamlin, in his individual capacity,

Defendants—Appellees.

______________________________

Appeal from the United States District Court

for the Southern District of Mississippi

USDC No. 3:21-CV-219

______________________________

Before Higginbotham, Stewart, and Haynes, Circuit Judges.

Per Curiam: *

The dispute in this case involves the intersection of municipal

authority and constitutional rights and liberties. Brookwood Development,

_____________________

*

This opinion is not designated for publication. See 5th Cir. R. 47.5.

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L.L.C. (“Brookwood”) sought to revitalize a vacant lot, securing an option

contract and applying for a conditional use permit from the City of Ridgeland

(“Ridgeland”). 1 Ridgeland denied the application, and Brookwood contends

that this denial did more than stifle a project—it violated its substantive due

process and equal protection rights. Ridgeland, in turn, asserts that its

decision was a proper exercise of its authority, not a constitutional overreach.

The district court sided with Ridgeland, granting summary judgment in its

favor. Brookwood now appeals, challenging whether Ridgeland’s actions

remain within the constitutional boundaries that constrain municipal power.

Upon considering Brookwood’s appeal, we AFFIRM the district court’s

judgment in full.

I. Factual and Procedural History

In 2018, Ridgeland city officials grew concerned that Ridgeland was

becoming a hub for storage facilities. The city’s leadership believed these

storage facilities were not aligned with their vision for the city’s

development. For this reason, Ridgeland amended its zoning ordinance to

prohibit climate-controlled storage units in certain districts while also

imposing spacing restrictions to prevent oversaturation. Nevertheless,

StorageMax, a large climate-controlled storage facility headquartered in

Jackson, Mississippi, successfully applied for a conditional use permit to

construct a climate-controlled storage facility in another area of the city.

Ridgeland approved StorageMax’s application without objection or a

moratorium.

_____________________

1

Brookwood sued several city officials. They include Gene F. McGee, in his

individual capacity; D. I. Smith, in his individual capacity; Ken Heard, in his individual

capacity; Chuck Guatier, in his individual capacity; Kevin Holder, in his individual

capacity; Brian Ramsey, in his individual capacity; William Lee, in his individual capacity;

Wesley Hamlin, in his individual capacity.

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Brookwood submitted an application for a conditional use permit in

October 2020, seeking approval to develop a 130,000-square-foot, four-story

climate-controlled storage facility in the C-4 Highway Commercial District

of Ridgeland. The site, located between Interstate 55 and Highway 51, was

designated for developments requiring direct highway access and visibility.

Brookwood’s application included its purchase contract with Drury

Development Corporation (“Drury”) for the property, but it lacked the

required written authorization from Drury to act on its behalf in seeking the

permit. The application also fell short of the required number of parking

spaces under Ridgeland’s zoning regulations.

Ridgeland’s zoning ordinance stipulates that a “conditional use” is a

land use generally deemed inappropriate for a particular zoning district but

that may be allowed if it promotes public health, safety, and general welfare,

and does not negatively impact surrounding properties. The approval of

conditional use permits rests with the Mayor and Board of Aldermen

(“Board”) after they receive recommendations from the zoning board. The

zoning ordinance requires specific findings that the proposed use will not

harm public interests, depreciate property values, or be detrimental to public

health, safety, or economic welfare. The zoning ordinance includes

mandatory terms, providing that the conditional use permit “must be

issued” if the standards are met.

Brookwood’s application was scheduled for four public hearings

before the zoning board, with each hearing continued either at Brookwood’s

request or due to deficiencies in the application. Eventually, in February

2021, the zoning board narrowly voted 3-2 to recommend that the Mayor and

Board approve Brookwood’s application.

Before the Mayor and Board could act on the application, however,

Ridgeland imposed a temporary moratorium on the issuance of conditional

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use permits for climate-controlled storage facilities. The purpose of the

moratorium was to allow Ridgeland time to study the potential effects of such

facilities on its primary retail zones and transportation corridors. In May

2021, Alan Hart, Ridgeland’s Community Development Director, presented

the results of the study to the Mayor and Board. He recommended an

amendment to the zoning ordinance to address the oversaturation of storage

facilities, which the study indicated could hinder future commercial

development. Upon reviewing the study’s determinations, the Mayor and

Board unanimously passed a resolution that denied Brookwood’s conditional

use permit.

Brookwood responded by filing a lawsuit under 42 U. S. C. § 1983,

arguing that Ridgeland’s denial of its permit application violated its

substantive due process and equal protection rights. Ridgeland moved to

dismiss the individual Defendants, arguing that they were entitled to

qualified immunity. The district court allowed the case to proceed, denying

Ridgeland’s motion. Following extensive discovery, which included

depositions and expert reports, the district court granted summary judgment

in favor of Ridgeland. The district court explained that Brookwood had failed

to establish a protected property interest and that Ridgeland’s denial of the

conditional use permit was rationally related to a legitimate governmental

interest. It also explained that StorageMax was not a similarly situated

comparator to Brookwood. Displeased with the judgment, Brookwood

appealed.

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II. Standard of Review

We review grants of summary judgment de novo. See Wheeler v. BL

Dev. Corp., 415 F.3d 399, 401 (5th Cir. 2005). Summary judgment is proper

when no genuine issue of material fact exists, and the moving party is entitled

to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Piazza’s Seafood

World, LLC v. Odom, 448 F.3d 744, 752 (5th Cir. 2006). This court must

examine the evidence in the light most favorable to the nonmovant. Wheeler,

415 F.3d at 401–02. To avoid summary judgment, the nonmovant must offer

specific facts that demonstrate a genuine issue for trial. See Celotex Corp. v.

Catrett, 477 U.S. 317, 324 (1986). A genuine issue arises when the evidence

is such that a reasonable jury could return a verdict for the nonmovant.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment

is appropriate when the nonmovant “fails to make a showing sufficient to

establish the existence of an element essential to that party’s case.” Odom,

448 F.3d at 752 (quoting Celotex, 477 U.S. at 322–23).

III. Discussion

On appeal, we decide whether Ridgeland’s denial of Brookwood’s

conditional use permit application violated Brookwood’s substantive due

process and equal protection rights under the Fourteenth Amendment. We

address each issue in turn, starting with substantive due process.

A. Substantive Due Process

We first address whether the district court erred in granting

Ridgeland’s motion for summary judgment on Brookwood’s substantive due

process claim. Brookwood contends that it holds a constitutionally protected

property interest, either under Mississippi law or Ridgeland’s zoning

ordinance, and that Ridgeland wrongfully deprived it of that interest. We

disagree.

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The Fourteenth Amendment guarantees that “No State

shall . . . deprive any person of life, liberty, or property, without due process

of law.” U.S. Const. amend. XIV, § 1. The process owed depends on the

significance of the interests at stake, but only actions that threaten life,

liberty, or property trigger due process protections. See Tex. Fac. Ass’n v.

Univ. of Tex. at Dallas, 946 F.2d 379, 383–84 (5th Cir. 1991).

To assert a substantive due process claim, a party must allege a

constitutional deprivation and demonstrate that the state action lacks a

“rational relationship to a legitimate governmental interest.” Cripps v. La.

Dep’t of Agric. & Forestry, 819 F.3d 221, 232 (5th Cir. 2016). Government

action typically meets this standard when it protects public health, safety, or

welfare. See, e.g., FM Props. Operating Co. v. City of Austin, 93 F.3d 167, 172–

73 (5th Cir. 1996). If the state’s action is debatable, there is no substantive

due process violation. See Simi Inv. Co. v. Harris Cnty., 236 F.3d 240, 251 (5th

Cir. 2000).

Property interests “are not created by the Constitution” but “are

created and their dimensions are defined” by independent sources, like state

law. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538 (1985); see also

Logan v. Zimmerman Brush Co., 455 U.S. 422, 430 (1982) (defining a property

right as “an individual entitlement grounded in state law”). A party has a

protected property interest when it shows a “legitimate claim of

entitlement,” not merely a “unilateral expectation.” Bd. of Regents v. Roth,

408 U.S. 564, 577 (1972). A benefit does not achieve entitlement status if

officials retain the discretion to grant or deny it. See Town of Castle Rock v.

Gonzales, 545 U.S. 748, 756 (2005); see also Hampton Co. Nat’l Sur., LLC v.

Tunica Cnty., 543 F.3d 221, 226 (5th Cir. 2008) (“No discretion in the official

and a reasonable expectation in the citizen are central elements.”).

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Federal courts look to state law to determine whether a property

interest exists and “usually treat, as dispositive, the existence—or absence—

of a property interest under state law.” Hignell-Stark v. City of New Orleans,

46 F.4th 317, 322 (5th Cir. 2022). If the law, however, sets “substantive

limits on official discretion,” a benefit may qualify as a protected property

right. See Ridgely v. FEMA, 512 F.3d 727, 735 (5th Cir. 2008) (citing Ky. Dep’t

of Corr. v. Thompson, 490 U.S. 454, 463 (1989)). Courts assess whether

“substantive limits on official discretion” exist by looking for “explicitly

mandatory language,” indicating that if the regulation’s criteria are met, a

specific result must follow. Id. at 735–36. In Ridgely, this court found “such

mandatory language . . . wholly absent” because the regulation in that case

stated only that it “may” assist those who qualify, leaving room for

discretion. Id. at 736. Therefore, whether Brookwood has a substantive due

process right turns on whether it had a protected property interest in the

conditional use permit.

1. Protected Property Interest

Brookwood maintains that its traditional ownership interest in the

property, stemming from equitable title, is an “old” property interest

protected by the Due Process Clause, independent of Roth’s “legitimate

claim of entitlement” test. 408 U.S. at 577; see Charles A. Reich, The New

Property, 73 Yale L.J. 733, 771–73 (1964) (comparing constitutionally

protected traditional property rights with modern property interests created

through government programs). Assuming arguendo that “old” property

interests need not undergo Roth’s “legitimate claim of entitlement”, we hold

that Brookwood does not have a protected property interest in the

conditional use permit under Mississippi law.

Under Mississippi law, a real estate option contract is “an agreement

to sell land for a definite price, exercisable at the discretion of the promisee.”

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McCorkle v. Loumiss Timber Co., 760 So. 2d 845, 850 (Miss. Ct. App. 2000)

(citing Duke v. Whatley, 580 So. 2d 1267, 1272 (Miss. 1991)). The contract

grants the promisee the power to decide whether to purchase while holding

the price firm. “[W]ritten notice to the seller of intent of the option holder

to exercise an option has the effect of an acceptance, converting the option

into an enforceable bilateral contract. It is not necessary for an option holder

to tender the purchase price in order to exercise the option.” Creely v.

Hosemann, 910 So.2d 512, 519 (Miss. 2005) (emphasis added) (citing

Busching v. Griffin, 542 So.2d 860, 864–65 (Miss. 1989)). Certainly,

“[a]bsent language in the contract to the contrary, an option holder has no

obligation or duty to show an ability to pay the entire sales price before the

closing.” Prestenbach v. Collins, 159 So.3d 531, 534 (Miss. 2014). “The holder

of an option is entitled to specific performance of the optioner’s duty to

convey, so long as the holder is willing to pay the option price.” Creely, 910

So.2d at 519.

Regarding equitable ownership interest under Mississippi law, a

longstanding common law tradition—equitable conversion—grants a party a

property interest in the land for which she contracted. “When parties

contract for the sale of real estate, an equitable conversion occurs; the

purchaser becomes the equitable owner of the property.” 27A AM. JUR. 2D

EQUITABLE CONVERSION § 13. Mississippi caselaw adds to equitable

conversion’s longstanding common law pedigree. See, e.g., Hardee v.

Cheatham, 52 Miss. 41 (1876) (noting that the

doctrine of equitable conversions “is founded on the principle that equity

will regard a thing which ought to be done, or is directed to be done, to be

actually done, as when, by will, marriage settlement, or otherwise, money is

directed to be converted into land, or land into money”). More recently, the

Mississippi Supreme Court addressed the concept of equitable title in West

v. West, 88 So. 3d 735, 742 (Miss. 2012), with the Mississippi Court of

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Appeals later examining the issue in Ing v. Adam, 248 So. 3d 881 (Miss. Ct.

App. 2018).

In West, an ex-wife sued her ex-husband for violating the parties’

property settlement agreement, which was not an option contract. See 88 So.

3d at 735. There, the court held that the ex-husband transferred “equitable

interest” in all of the business interests he held when the two parties signed

the property settlement agreement. Id. at 742. In Ing, supra, a vendor of a

lease-purchase agreement brought an eviction action against the option

holder, and the option holder counterclaimed for breach of contract. See 248

So.3d at 881–82. There, the purchaser timely provided written notice to

exercise his option to purchase the building. Id. at 886. The Ing court

concluded that, by exercising the option through timely written notice, the

option holder gained equitable title to the property. Id. at 887 (determining

that the option holder was the “equitable owner” of the property).

Here, Brookwood’s contract is an option contract. It was “an

agreement to sell land for a definite price.” See McCorkle 760 So.2d at 850.

The purchase price of the property, under the contract, was “[f]ifteen dollars

per square foot in the area of the [p]roperty as determined by the Survey and

Subdivision Plat (defined below), subject to the credits, adjustments and

prorations provided for herein.” The parties here clearly defined the price

term for this land via this provision. As a result, Brookwood’s contract had a

definitive price term.

Brookwood’s contract was also “exercisable at the discretion of the

promisee.” Id. Brookwood is a promisee under these circumstances,

promising Drury that it would purchase Drury’s lot. “Exercisable

discretion” exists here as well considering the terms of the contract. Those

terms allowed Brookwood, per its “reasonable discretion,” to terminate the

contract if it determined that the property did not suit its purpose:

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Termination. If Purchaser determines, in Purchaser’s

reasonable discretion, that the Property is not suitable for

Purchaser’s purposes, Purchaser shall have the right, by

delivery to Seller of written notice of termination on or before

the last day of the Inspection Period, to terminate this Contract

and Purchaser’s obligation to purchase the Property

(“Purchaser’s Termination Notice”). If Purchaser’s

Termination Notice is timely given, the Deposit shall be

returned to Purchaser and neither party shall have any further

liability to the other hereunder. If Purchaser fails to deliver

Purchaser’s Termination Notice on or prior to the last day of

the Inspection Period, Purchaser shall be deemed to have

waived such termination right and the Deposit shall be non-

refundable to Purchaser except in the event Seller fails or

refuses to close.

Given that contractual language, Brookwood’s contract bestowed it with

“exercisable discretion.” The contract between Brookwood and Drury

therefore is an option contract.

Because Brookwood’s contract is an option contract, Brookwood has

no equitable title to the property at issue here. Unlike the option holder in

Ing, Brookwood never exercised its option. See, e.g., 48 So.3d at 881–82;

Instead, Brookwood repeatedly sought extensions on its option from Drury.

And, crucially, the contract between Brookwood and Drury contained a

provision stating that “[t]he property is and will from the date hereof to the

Closing Date be owned, legally and of record by Seller.” It is evident then

that Brookwood never exercised its option, lacking equitable title to the

property. For these reasons, Mississippi law does not grant Brookwood a

property interest in the conditional use permit. See id. Nonetheless,

Brookwood urges that Ridgeland’s zoning ordinance grants it a protected

property interest under Roth, 408 U.S. at 577. We are unpersuaded.

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Ridgeland’s zoning ordinance has mandatory terms, providing that

the conditional use permit “must be issued” if the standards are met:

Conditional Use approval must be issued upon certain

conditions, such that if the Mayor and Board of Aldermen find

that an applicant meets the requisite standards specified in the

Ordinance, the Conditional Use permit must be allowed.

Conditions other than those delineated in the Ordinance must

not be arbitrarily imposed but must be related to the purposes

of zoning. Applications may be denied only on proof that the

use is detrimental to the public health, safety, and welfare.

Reasons for denial must be specific.

The phrases “must be issued” and “must be allowed” constitute

unmistakably mandatory language. See, e.g., Ridgely, 512 F.3d at 735 (holding

that “may” lacks the force of mandatory language). The “requisite standards

specified in the [o]rdinance” serve as substantive predicates, and if those

standards are met, “a particular outcome must follow,” compelling

Ridgeland to grant the conditional use permit. See, e.g., id. Consequently,

under the zoning ordinance, Ridgeland has no discretion to deny a

conditional use permit when an application satisfies the “requisite

standards.” Facially, the ordinance therefore confers a protected property

interest to applicants that the Mayor and Board determine to have met those

standards. When we apply this ordinance in the instant case, however, it

becomes clear that Brookwood does not have a protected property interest in

the conditional use permit.

Here, Brookwood’s application was deficient. It required a document

showing the owner’s representative’s authority to act, which Brookwood

failed to provide. Rather, Brookwood submitted a “Sale Contract,” a

document fundamentally inconsistent with the ordinance’s requirements.

Additionally, the application failed to meet the parking space requirements

under Ridgeland’s zoning regulations. These fundamental shortcomings

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preserved Ridgeland’s discretion to deny the application. The ordinance,

read in full, applies only to properly submitted applications. Because

Brookwood’s submission fell short, the ordinance is irrelevant to its claim.

Without a proper application, Brookwood cannot claim a protected property

interest in the conditional use permit under Ridgeland’s zoning ordinance.

Accordingly, we hold that the zoning ordinance does not convey any

protected property interest in a conditional use permit to Brookwood.

For these reasons, we conclude that Brookwood does not have a

protected property interest in the conditional use permit under Mississippi

law or the zoning ordinance. Because Brookwood has no protected property

interest in the conditional use permit, we need not decide whether

Ridgeland’s denial of Brookwood’s conditional use permit application

survives rational basis review.

B. Equal Protection

Brookwood contends that Ridgeland infringed upon its equal

protection rights by treating it differently from StorageMax, which

Brookwood identifies as a similarly situated comparator. It claims that

Ridgeland intentionally singled it out as a “class-of-one” without any rational

basis for the disparate treatment. We disagree.

The pressing issue here is whether StorageMax is a similarly situated

comparator to Brookwood. The Fifth Circuit has determined that when it

assesses whether a similarly situated comparator exists, the parties it

compares must be identical in all relevant components. This is not a

mechanical test as this court has explained:

The legal requirement that a class-of-one plaintiff’s

comparators be similarly situated is not a requirement

susceptible to rigid, mechanical application— there is no

precise formula to determine whether an individual is similarly

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situated to comparators. What is relevant in one case might not

be relevant in another, for example, and “the degree to which

others are viewed as similarly situated necessarily will depend

substantially on the facts and context of the case.”18 In short,

the inquiry is case-specific and requires us to consider the full

variety of factors that an objectively reasonable decisionmaker

would have found relevant in making the challenged decision.

Lindquist v. City of Pasadena Tex., 669 F.3d 225, 233–34 (5th Cir. 2012)

(cleaned up); see, e.g., Beeler v. Rounsavall, 328 F.3d 813, 817 (5th Cir. 2003)

(holding that parties were not similarly situated comparators because the

zoning ordinance distinguished two applications based on the

circumstances). The plaintiff and comparator also must be “in all relevant

respects alike.” Tex. Ent. Ass’n v. Hegar, 10 F.4th 495, 513 (5th Cir. 2021)

(quotation omitted). This court uses a case-specific and nonmechanical

assessment to determine whether a similarly situated comparator exists.

In this case, Brookwood is not similarly situated to StorageMax for

two reasons. First, the zoning districts differ between StorageMax and

Brookwood. In the district court, Brookwood acknowledged this distinction,

conceding that it and StorageMax were located in “different zoning

districts.” Ridgeland approved StorageMax’s conditional use permit for a

district designated for “light industrial uses.” Conversely, Brookwood’s

permit application was for a district intended for “highly planned

developments that typically require direct highway access and visibility.”

This zoning district distinction aligns with the ordinance’s purpose:

StorageMax’s facility fit within its district’s purpose, while Brookwood’s did

not. An “objectively reasonable decisionmaker would have found relevant”

this distinction, as the zoning districts necessitate a distinct application of the

ordinance. See Lindquist, 669 F.3d at 234 (holding that parties are not

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similarly situated when the zoning ordinance applies differently to each

project).

Second, Brookwood failed to meet a fundamental requirement: it did

not provide the ownership authorization needed for the conditional use

permit application. StorageMax, by contrast, included this authorization

when applying. An “objectively reasonable decisionmaker would have found

relevant” this failure, as Brookwood’s noncompliance with Ridgeland’s

application requirements directly impacted the decisionmaking process. See

id. (parties were not similarly situated where one party provided letters from

affected residents expressing no objections, while the other did not).

Thus, we conclude that StorageMax and Brookwood are not similarly

situated comparators. Given this conclusion, we need not determine whether

Ridgeland’s differentiation between the applications would withstand

rational basis review.

IV. Conclusion

For the foregoing reasons, we AFFIRM the district court’s

judgment.

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