The opinion
Opinions of the United
2000 Decisions States Court of Appeals
for the Third Circuit
2-28-2000
Woodwind Estates v. Gretkowski
Precedential or Non-Precedential:
Docket 99-3280
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Filed February 28, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 99-3280
WOODWIND ESTATES, LTD.,
Appellant
v.
W. J. GRETKOWSKI; LARRY SEBRING;
JAMES DECKER, Individually, and in their capacity as
Supervisors of Stroud Township; W. TAYLOR WENCK;
EDWARD CRAMER; FRANK HERTING;
JOAN KEIPER, Individually, and as members of the
Planning Commission of Stroud Township;
STROUD TOWNSHIP, MONROE COUNTY, PENNSYLVANIA
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil No. 97-cv-00472)
District Judge: Honorable James F. McClure, Jr.
Argued December 7, 1999
Before: SLOVITER, ROTH and COWEN, Circuit Judg es
(Filed: February 28, 2000)
Marshall E. Anders, Esq. (Argued)
802 Main Street
Stroudsburg, PA 18360
Counsel for Appellant
Eugene F. Hickey, II, Esq. (Argued)
Schneider, Gelb, Goffer & Hickey
400 Spruce Street, Suite 500
Scranton, PA 18503
Counsel for Appellees
OPINION OF THE COURT
COWEN, Circuit Judge.
This appeal is a civil rights action under 42 U.S.C.S 1983
brought by plaintiff Woodwind Estates, Ltd. (Woodwind)
against defendants Stroud Township (the "Township") and
individual officers of the Township. The suit emanated from
the failure of the Township to approve development plans
for specific property. The central issue on appeal is whether
the District Court properly granted defendants' motion for
judgment as a matter of law on Woodwind's S 1983
substantive due process claim. Because we find that the
District Court erred in granting this motion, we will reverse
and remand for further proceedings.
Woodwind is a Pennsylvania limited partnership which at
all times relevant to this action sought to build a
subdivision development on seventy-five acres in Stroud
Township, Pennsylvania. In August 1995, Woodwind was
awarded approximately $1.1 million in federal low income
housing tax credits by the Pennsylvania Housing Finance
Agency ("PHFA") for developing an "affordable housing"
project. The project was to consist of one hundred single
family homes for low income families. In order to retain the
federal income tax credits, PHFA required Woodwind to
complete the project by December 31, 1997. Woodwind
sought to obtain subdivision approval for the project
pursuant to the Township's Subdivision and Land
Development Ordinance ("SALDO").
Woodwind's first step in the approval process was the
submission of a preliminary development plan ("the Plan").
On March 18, 1996, it submitted the Plan and supporting
information to the Township. Pursuant to the Township's
ordinance the Plan was evaluated initially by the Stroud
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Township Planning Commission. The Planning Commission
was to issue an advisory opinion to the Board of
Supervisors which in turn would make the final decision
regarding approval.
At a meeting on March 27, 1996, the Planning
Commission first considered the Plan. At the meeting, the
attorney for the Planning Commission advised the
Commission that the Plan satisfied the criteria for approval
as a subdivision.
The March 27, 1996, meeting also was attended by a
citizens group known as the "Concerned Neighbors of
Woodwind Estates" who opposed the project because they
did not want low-income residents living in the
neighborhood. The citizens group was represented at the
meeting by a private attorney, Marc Wolfe. On behalf of the
citizens group, Wolfe urged the Planning Commission to
deny approval for the Preliminary Plan insisting instead
that Woodwind seek approval for the project as a planned
unit development ("PUD"). The requirements for approval of
a PUD are more onerous, stringent, and time-consuming
than the requirements for subdivision approval.
During the course of the meeting on March 27, 1996,
members of the Planning Commission echoed the concerns
of the citizens group about the income-level and the
socioeconomic background of prospective tenants from the
Woodwind project, and the potential adverse economic
effects of the project on local property values. None of these
concerns, however, are conditions for subdivision approval
under the Township's ordinance.
On March 27, 1996, the Planning Commission advised
Woodwind that it would not review the Preliminary Plan
because it was an "incomplete submission" lacking certain
technical information. App. at 690. Woodwind thereafter
submitted a revised Preliminary Plan ("the Revised Plan")
which contained the requested information.
At a meeting on April 24, 1996, the attorney for the
Planning Commission advised the Commission that the
Revised Plan met the criteria for subdivision approval.
Nevertheless, attorney Wolfe urged the Planning
Commission to deny approval for the Revised Plan, again
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insisting that Woodwind obtain approval for the project as
a PUD rather than as a subdivision.
The Planning Commission took no action on the Revised
Plan for approximately six months. Finally, on October 30,
1996, the Planning Commission voted 4-2 to recommend to
the Board of Supervisors to deny approval of the Revised
Plan.
The Board of Supervisors adopted the recommendation of
the Planning Commission voting unanimously to deny
approval. Shortly after the vote, the Board of Supervisors
issued a written notice denying approval, which notice gave
no reason to Woodwind for the denial. Attorney Wolfe
contacted a member of the Board of Supervisors and
advised him that the Board's denial letter was legally
inadequate because it did not state any reason for the
decision.
Following the above conversation, Wolfe himself drafted a
second letter of denial which he sent to the Board of
Supervisors but not to Woodwind setting forth the alleged
violations or shortcomings of the Revised Plan. Quite
obviously Woodwind was not even in a position to respond
to Wolfe's letter. Relying heavily upon significant portions of
the denial letter drafted by Wolfe, the attorney for the Board
of Supervisors subsequently sent a letter dated November
27, 1996, notifying Woodwind of the reasons for the denial.
The letter included as the primary reason for the denial the
exact same reason which Wolfe previously had proposed in
his draft: "The Board of Supervisors considers the above
application to constitute a Planned Unit Development in
that the project includes residential units located on a tract
of land at least 50 acres in size which is planned for
development in its entirety under single ownership or
control." App. at 707.
After the Revised Plan was denied, Woodwind determined
that it was impossible to complete the project by the
December 1997 deadline. When Woodwind could not meet
the deadline, PHFA subsequently withdrew financing and
the project was canceled.
Woodwind initiated this action by filing a complaint in
United States District Court for the Middle District of
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Pennsylvania alleging that the defendants unlawfully denied
its application for a planned real estate subdivision. Named
as defendants were Stroud Township and seven individual
defendants who are members of the Planning Commission
and Board of Supervisors. Woodwind brought suit under 42
U.S.C. SS 1983 (Count 1), 1981 (Count 2), 1985 (Count 3),
and various supplemental state law claims (Counts 4-6).
Before submitting the case to the jury, the District Court
granted defendants' motion for judgment as a matter of law
under Rule 50(a) of the Federal Rules of Civil Procedure.
The District Court subsequently issued a memorandum
explaining its dismissal of Woodwind's S 1983 substantive
due process claim.
Woodwind appeals only the dismissal of its S 1983
substantive due process claim. We will reverse and remand
for further proceedings.
We exercise plenary review of an order granting or
denying a motion for judgment as a matter of law and apply
the same standard as the District Court. See Lightning
Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993).
"The question is not whether there is literally no evidence
supporting the party against whom the motion is directed
but whether there is evidence upon which the jury could
properly find a verdict for that party." Patzig v. O'Neill, 577
F.3d 841, 846 (3d Cir. 1978) (citation omitted) (quotation
omitted). Such a motion should be granted only if, viewing
the evidence in the light most favorable to the nonmovant
and giving it the advantage of every fair and reasonable
inference, there is insufficient evidence from which a jury
reasonably could find liability. See Lightning Lube, 4 F.3d at
1166.
Substantive due process "is an area of the law`famous
for its controversy, and not known for its simplicity.' "
DeBlasio v. Zoning Bd. of Adjustment, 53 F.3d 592, 598 (3d
Cir. 1995) (quoting Schaper v. City of Huntsville, 813 F.2d
709, 716 (5th Cir. 1987)). On the one hand, federal courts
are reluctant to sit as appeal boards for disputes between
land developers and a Township's planning body. On the
other hand, developers have a due process right to be free
from "arbitrary and irrational zoning actions." Arlington
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Heights v. Metropolitan Housing Corporation, 429 U.S. 252,
263 (1973). During the past decade this court has been
called upon quite frequently to grapple with the obvious
tension between these two principles in a line of
substantive due process cases. See, e.g., Blanche Road
Corp. v. Bensalem Twp., 57 F.3d 253 (3d Cir. 1995);
DeBlasio v. Zoning Bd. of Adjustment, 53 F.3d 592 (3d Cir.
1995); Parkway Garage v. Philadelphia, 5 F.3d 685 (3d Cir.
1993); Midnight Sessions, Ltd. v. City of Philadelphia, 945
F.2d 667 (3d Cir. 1991); Bello v. Walker, 840 F.2d 1124 (3d
Cir. 1988).
The Fourteenth Amendment provides, in part, that"no
State [shall] deprive any person of life, liberty, or property
without the due process of law . . . ." U.S. Const. amend
XIV, S 1. To prevail on a substantive due process claim
under S1983, a plaintiff must establish as a threshold
matter that he has a protected property interest to which
the Fourteenth Amendment's due process protection
applies.
Woodwind argues that it has a protected property right in
the approval of its development plans. Woodwind contends
that so long as the development plans met all the
requirements of the Township's subdivision ordinance it
had an absolute right to approval of the plans as
submitted. The defendants argue that Woodwind has no
protected property interest in the approval. Even though
Woodwind's plans indisputably met the requirements of the
Township's subdivision ordinance, according to the
defendants they nonetheless had the discretion (based
upon some unspecified authority) to deny approval of the
plans as submitted.
This court has recognized "that the issue of whether and
when state-created property interests invoke substantive
due process concerns has not been decided by the Supreme
Court." Deblasio, 53 F.3d at 598. In this circuit, " `not all
property interests worthy of procedural due process
protection are protected by the concept of substantive due
process.' " Id. at 598 (quoting Reich v. Beharry, 883 F.2d
239, 244 (3d Cir. 1989)). In Independent Enterprises, Inc. v.
Pittsburgh Water & Sewer Authority, 103 F.3d 1165 (3d Cir.
1997), we stated that "a substantive due process claim
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grounded in an arbitrary exercise of governmental authority
may be maintained only where the plaintiff has been
deprived of a `particular quality of property interest," id. at
1179, and further explained that "all of these cases
involv[ing] zoning decisions, building permits, or other
governmental permission required for some intended use of
land owned by the plaintiffs," id. at n. 12, implicated the
kind of property interest protected by substantive due
process. It follows that the holder of a land use permit has
a property interest if a state law or regulation limits the
issuing authority's discretion to restrict or revoke the
permit by requiring that the permit issue as a matter of
right upon compliance with terms and conditions
prescribed by the statute or ordinance. See, e.g.,
Bituminous Materials, Inc. v. Rice County, Minnesota , 126
F.3d 1068, 1070 (8th Cir. 1997).
In this matter, the procedures for approval of subdivision
plans are set forth in the Township's subdivision ordinance.
In the section captioned "Specific Procedures For Plan
Submission and Approval," the ordinance specifically
provides as follows: ". . . the Commission shall determine
the extent to which the [subdivision] plan complies with the
Ordinance and shall recommend to the Board of
Supervisors that the plan be approved entirely, that it be
conditionally approved, or that it be disapproved." App. at
503. Under the ordinance, the plan submitted must be
approved when it complies with all objective criteria for a
subdivision.1 In light of the fact that the plan which
Woodwind submitted indisputably satisfied all of the
requirements for approval under the ordinance, and
because the ordinance substantially limits the Township's
discretion regarding approval, we conclude that Woodwind
_________________________________________________________________
1. Likewise, Pennsylvania courts have stated that"a subdivision plan
must be approved if it complies with [the] applicable regulations . . . ."
Anderson v. Board of Supervisors of Price Twp., Monroe County, Pa., 437
A.2d 1308, 1309 (Pa. Cmwlth. 1981); See also Pace Resources, Inc. v.
Shrewsbury Twp. Planning Commission, 492 A.2d 818, 821 (Pa. Cmwlth.
1985); Goodman v. Board of Commissioners of the Township of Whitehall,
411 A.2d 838, 841 (Pa. Cmwlth. 1980).
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has a protected property interest under the Fourteenth
Amendment.2
Along with establishing a protected property interest,
Woodwind also must demonstrate that it was the victim of
"a governmental action [that] was arbitrary, irrational, or
tainted by improper motive" in order to show a substantive
due process violation under S 1983. Bello v. Walker, 840
F.2d 1124, 1129 (3d Cir. 1988); Accord Parkway Garage v.
Philadelphia, 5 F.3d 685, 692 (3d Cir. 1993) (a violation of
substantive due process rights is shown where the
government's actions in a particular case were "in fact
motivated by bias, bad faith or improper motive"); Blanche
Road Corp. v. Bensalem Twp., 57 F.3d 253, 263 (3d Cir.
1995) (same). Evidence that the government acted
improperly for "reasons unrelated to the merits of the
application for the permits" may support a finding that the
government arbitrarily or irrationally abused its power in
violation of substantive due process. Bello, 840 F.2d at
1129; See also Pace Resources Inc. v. Shrewsbury Twp.,
808 F.2d 1023, 1035 (3d Cir. 1987) (irrationality not shown
absent proof that government took actions against
developer "for reasons unrelated to land use planning"). In
disputed factual situations, the determination of the
existence of improper motive or bad faith is properly made
by the jury as the finder of fact. See, e.g. , Bello, 840 F.2d
at 1130; Midnight Sessions Ltd. v. City of Philadelphia, 945
F.2d 667, 683 (3d Cir. 1991).
_________________________________________________________________
2. According to the defendants, the District Court correctly dismissed the
case "on the ground that the developer failed to establish a
constitutionally protected property right." Defendants' Br. at 8. If the
District Court dismissed the substantive due process claim on that
basis, it was in error. Woodwind in fact had a protected property interest
for the reasons explained above.
It is not entirely clear to us, however, whether the District Court
granted judgment as a matter of law on that ground. The District Court
initially stated that it was "[a]ssuming a protected property interest"
although subsequently it appears to have taken the view that Woodwind
had no such protected property interest. App. at 9-10. In any event, the
District Court was in error by refusing to submit Woodwind's substantive
due process claim to the jury on the issue of improper motive or bad
faith.
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Applying this standard, we have not hesitated to vacate
a grant of summary judgment or a judgment as a matter of
law where the evidence at least plausibly showed that the
government took actions against the developer for
indefensible reasons unrelated to the merits of the zoning
dispute. One example is Bello v. Walker, 840 F.2d 1124 (3d
Cir. 1988). Bello involved a substantive due process claim
under S 1983 brought by a developer against the municipal
council. The plaintiff in Bello presented evidence that the
defendants "improperly interfered with the process by
which the municipality issued building permits, and that
they did so for partisan political or personal reasons
unrelated to the merits of the application for the permits."
Id. at 1129. The defendants in Bello presented evidence
that the building permits at issue were denied for legitimate
zoning reasons thus presenting an arguably rational
ground for the decision. Id. at 1130. Because there was a
genuine factual dispute over whether the defendants had
denied the permit based upon an improper motive, we
vacated the grant of summary judgment by the District
Court. See also Deblasio v. Zoning Bd. of Adjustment, 53
F.3d 592, 600-01 (3d Cir. 1995) (vacating summary
judgment where genuine dispute as to whether denial of
permit by governmental decision maker was motivated by
improper personal financial reasons); Parkway Garage, Inc.
v. City of Philadelphia, 5 F.3d 685, 696-99 (3d Cir. 1993)
(vacating directed verdict where jury could reasonably infer
that denial of permit by governmental decision maker was
motivated by improper economic reasons).
In Blanche Road Corp. v. Bensalem Twp., 57 F.3d 253 (3d
Cir. 1995), the plaintiff presented evidence that the
defendants had engaged in a pattern of improperly refusing
to release and issue certain permits as part of an effort "to
delay and ultimately to shut down" the proposed
subdivision development. 57 F.3d at 260. We held that the
intentional blocking or delaying of the issuance of permits
for reasons unrelated to the merits of the permit application
violates principles of substantive due process and is
actionable under S 1983. Id. at 268-69. We vacated the
order of the District Court granting the defendants' motion
for a directed verdict under Rule 50(a) and ordered a new
trial.
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This case is similar to Bello and Blanche Road. Woodwind
presented the following evidence at trial: (1) the defendants
had no legitimate basis under the ordinance for demanding
information about the socioeconomic background and
income-levels of prospective tenants as a condition of
subdivision approval; (2) the defendants denied approval for
the plan by adopting significant portions of a letter drafted
by the private attorney for the citizens group which
vigorously opposed the development for improper reasons;
and (3) the defendants intentionally blocked or delayed the
issuance of the permit for subdivision approval because
they were aware that by doing so the developer would be
unable to meet the building deadline for financing the
project. All of this in combination could provide a jury with
a basis from which it could reasonably find that the
decision of the defendants to deny approval was made in
bad faith or was based upon an improper motive. See, e.g.,
Bello, 840 F.2d at 1130.
Our conclusion here is bolstered by our narrow scope of
review. On a motion for a judgment as a matter of law, the
non-moving party is entitled to the benefit of all reasonable
inferences. " `The trial judge, in his review of the evidence,
and this court, in its own appellate review, must expose the
evidence to the strongest light favorable to the party against
whom the motion is made and give him every advantage of
every fair and reasonable inference.' " Parkway Garage, 5
F.3d at 698 (quoting Fireman's Fund Ins. Co. v. Videofreeze
Corp., 540 F.2d 1171, 1178 (3d Cir. 1976)). As we stated in
Fireman's Fund,"we cannot say (as a matter of law) that the
record is deficient of that `minimum quantum of evidence
from which a jury might reasonably afford relief '." 540 F.2d
at 1178. Woodwind adduced sufficient evidence to overcome
the motion. The District Court erred in dismissing the
S 1983 substantive due process claim. Accordingly, we will
remand for further proceedings.
Next, the supervisor defendants contend that their Rule
50(a) motion should be upheld on the alternative ground
that they are entitled to qualified immunity for their
decision to deny Woodwind's application for subdivision
approval. According to the supervisors, they are entitled to
qualified immunity simply because they were relying upon
10
the recommendation of the planning commission and the
township solicitor. We disagree.
The test for determining whether government officials are
entitled to qualified immunity for their actions, as set forth
in Harlow v. Fitzgerald, 457 U.S. 800 (1982) is that
"government officials performing discretionary functions
generally are shielded from liability for civil damages insofar
as their conduct does not violate clearly established
statutory or constitutional rights of which a reasonable
person would have known." 457 U.S. at 818. In the instant
case, however, when the evidence is viewed in the light
most favorable to the plaintiff, it is clear that the supervisor
defendants could not have reasonably believed that their
conduct did not violate plaintiff 's rights. Under the local
ordinance, the Woodwind plan as submitted must have
been approved as a subdivision because it satisfied all of
the objective criteria. Yet the supervisor defendants denied
approval for the subdivision plan. The supervisor
defendants have not shown that their interpretation or
understanding of the ordinance was reasonable or that
Pennsylvania law on the subject was unclear. Accordingly,
the defense of qualified immunity is not available to the
supervisor defendants in the instant matter. See, e.g.,
Blanche Rd. Corp. v. Bensalem Twp., 57 F.3d 253, 269 (3d
Cir. 1995) (no qualified immunity for township supervisors
where they could not reasonably have believed that their
conduct did not violate plaintiff 's constitutional rights).3
The Township also contends that its Rule 50(a) motion
should be upheld on the alternative ground that there was
insufficient evidence from which a jury couldfind a
Township policy sanctioning conduct that violated
plaintiff 's constitutional rights. In order to establish
Township liability under S 1983, "a plaintiff must show that
an official who has the power to make policy is responsible
for either the affirmative proclamation of a policy or
_________________________________________________________________
3. The District Court did not specifically address the issue of whether
the
planning commissioners were entitled to qualified immunity.
Nonetheless, we conclude that the planning commissioners are not
entitled to qualified immunity for similar reasons as those discussed
above.
11
acquiescence in a well-settled custom." Blanche Rd. Corp. v.
Bensalem Twp., 57 F.3d 253, 269 n. 16 (3d Cir. 1995). It
is hornbook law that "actions by those with final authority
for making a decision in the municipality constitute official
policy for purposes of S 1983." Erwin Chemerinsky, Federal
Jurisdiction, S 8.5 at 479 (3d ed. 1999).
Applying this test in Blanche Road, we held that there
was sufficient evidence of an official policy to establish
Township liability under S 1983 because the Township
supervisors had final, unreviewable authority for making
the decision to deny the permits sought by the plaintiff. 57
F.3d at 269 n.16. Similarly, here the supervisor defendants
indisputably had final, unreviewable authority for making
the decision. Accordingly, Woodwind's evidence, if believed,
is sufficient to establish Township liability under S 1983.
For the above reasons, we will reverse the District Court's
order, granting defendants' Rule 50(a) motion, and we will
remand for further proceedings consistent with this
opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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