Amicus Curiae Brief — PFZ Properties, Inc. v. Rodriguez

upreme Court, U.S.

i’ i - I D

| DEC 27 19

No. 91-122 91

pei CLERK

In The

Supreme Court of the United States

October Term, 1991

S

PFZ PROPERTIES, INC.,

Petitioner,

RENE ALBERTO RODRIGUEZ, et al.,

Respondents.

7.

On Writ Of Certiorari To The

United States Court Of Appeals

For The First Circuit -

.

BRIEF OF THE INSTITUTE FOR JUSTICE AS AMICUS

CURIAE IN SUPPORT OF PETITIONER

¢

Witutam H. Me tor, III

*CuINT BOLicK

JONATHAN W. EmMorp

Scott G. BuLLoOcKk

Institute for Justice

1001 Pennsylvania Avenue, NW

Suite 200 South

Washington, DC 20004

(202) 457-4240

Attorneys for Amicus Curiae

* Counsel of Record

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

A

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE .................. 1

STATEMENT OF THE CASE..............ccceeees: 2

SUMMARY OF ARGUMENT.....................08 3

I SURE chk os eas aaa dena es BVAN we ees 0 5

I. A CORE PURPOSE OF THE FOURTEENTH

AMENDMENT IS TO PROTECT PRIVATE

PROPERTY RIGHTS AGAINST ARBITRARY

AND OPPRESSIVE ACTIONS OF STATE OFFI-

erento cuwaraeecaersneheeeed oe eens ine ys 5

Il. A PATTERN OF DECEPTION, DELAY, AND

POLITICALLY MOTIVATED. MANIPULATION

OF THE BUILDING PERMIT PROCESS STATES

A CLAIM UNDER THE FOURTEENTH

AMENDMENT AND 42 U.S.C. § 1983......... 9

A. The Dichotomy Between Property Rights

and Other Rights is a False One.......... 9

B. The Facts As Alleged State a Substantive

Due Process Cause of Action.............. 12

C. The Substantive Due Process Claim Alleged

Here is Complementary to, But Not Duplica-

tive of, a Takings Claim Under the Fifth

ES rhe ae f6skke tie ek ada elenssees 15

se cae ceuwd nen anes ce ee ae ka eee CONS 18

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Aladdin's Castle, Inc. v. City of Mesquite, 630 F.2d

1029 (5th Cir. 1980), rev'd in part and remanded,

455 U.S. 283 (1982), opinion extended, 713 F.2d

1S Ga Cae Bes 66 ic citiececdecn eee 8

Amsden v. Moran, 904 F.2d 748 (1st Cir. 1990), cert.

Gentea, 111 G42. TID GOR ohddccaxasnen eee 15

Bateson v. Geisse, 857 F.2d 1300 (9th Cir. 1988)

0000 cee 6s 6b 6ORs babe bees eee eee 14, 15, 16, 17

Bello v. Walker, 840 F.2d 1124 (3rd Cir.), cert. denied,

GOB UD. Get CHRP 6. 0s sc cccscsveceseeeeee 13, 14

Brady v. Town of Colchester, 863 F.2d 205 (2nd Cir.

| Pree rrerr rr ee 13

Corfield v. Coryell, 6 F. Cas. 546 (C.C.E.D. Pa. 1823)..... 6

Daniels v. Williams, 474 U.S. 327 (1986)........... 12, 13

Davidson v. Cannon, 474 U.S. 344 (1986) .......... 13, 16

First English Evangelical Lutheran Church of Glendale

v. County of Los Angeles, 482 U.S. 304 (1987) ...... 16

Hawaii Housing Authority v. Midkiff, 467 U.S. 229

| PS rr 17

Littlefield v. City of Afton, 785 F.2d 596 (8th Cir.

rarer 14

Lochner v. New York, 198 U.S. 45 (1905)............... 8

Moore v. City of East Cleveland, 431 U.S. 494 (1977) .... 11

Nebbia v. New York, 291 U.S. 502 (1934).............. 13

New Burnham Prairie Homes, Inc v. Village of Burn-

ham, 910 F.2d 1474 (7th Cir. 1990)................. 10

ili

TABLE OF AUTHORITIES - Continued

Page(s)

PFZ Properties, Inc. v. Rodriguez, 928 F.2d 28 (Ist

eee SG Unt sev evecececsccecces 9, 10

Poe @ Gee, oer US. O97 (1961)............6.6---. 11

Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882

F.2d 1398 (9th Cir. 1989), cert. denied sub nom.

Doody v. Sinaloa Lake Owners Ass‘n, 110 S.Ct.

EE POTEET ET TEE 11, 15, 17

Slaughter-House Cases, 83 U.S. 36 (1873) .............. 7

United States v. General Motors, 323 U.S. 373 (1945).... 11

Yick Wo v. Hopkins, 118 U.S. 356 (1886)......... 7, 8, 17

Youngberg v. Romeo, 457 U.S. 307 (1982) ............. 13

CONSTITUTIONS

U.S. Constitution, Amendment XIV ............. passim

STATUTES

es cscs ccc ssvencesesss ~~ ta

IE 5 nc cc ccc csssenacsccccccvess 6

NS EEE ee eee 8

MISCELLANEOUS

H. Belz, Emancipation and Equal Rights: Politics and

Constitutionalism in the Civil War Era (1978)........ 6

C. Bolick, Unfinished Business: A Civil Rights Strat-

egy for America’s Third Century (1990) .............. 7

Civil Rights and the American Negro (A. Blaustein

and R. Zangrando, eds. 1968)...................+-. 5

iv

TABLE OF AUTHORITIES - Continued

Page(s)

M. Curtis, No State Shall Abridge (1986) .............. 7

R. Higgs, Competition and Coercion (1977)............. 5

G. Myrdal, An American Dilemma (1944).............. 5

Roback, Southern Labor Law in the Jim Crow Era:

Exploitative or Competitive?, 51 Univ. of Chicago

Ry Ct WE SUE vO een suVonscececeucdunkaanel ss‘ 5

B. Siegan, Economic Liberties and the Constitution

SUNY 6-0). 40 ba phd dNe ens ceeencesuuasseReanbeusebanens< 7

Siegan, “Economic Liberties and the Constitution:

Protection at the State Level,” in Economic Liber-

ties and the Constitution (J. Dorn and H. Manne,

eg PE Peer rr Fey fe eo ieee 6

No. 91-122

.

In The

Supreme Court of the United States

October Term, 1991

. m

PFZ PROPERTIES, INC.,

Petitioner,

RENE ALBERTO RODRIGUEZ, et al.,

Respondents.

S

On Writ Of Certiorari To The

United States Court Of Appeals

For The First Circuit

e

BRIEF OF THE INSTITUTE FOR JUSTICE

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

¢

INTEREST OF AMICUS CURIAE

— rt...

The Institute for Justice is a public interest law center

committed to strengthening three constitutional pillars of

a free society: economic liberty, private property rights,

and the free marketplace of ideas.

This case involves the viability of the “substantive

due process” doctrine as a restraint on oppressive and

arbitrary government actions that significantly impair the

exercise of an individual’s private property rights. The

Institute for Justice represents individuals across the

nation whose liberty and property rights have been vio-

lated by abusive government actions. The outcome in this

case is of direct and immediate concern to the Institute’s

clients and to its mission of strengthening the constitu-

tional protections of economic liberty and private prop-

erty rights. We believe our expertise in this area of law

can provide the Court with context and historical per-

spective that may be helpful in resolving the important

legal issues at stake.

STATEMENT OF THE CASE

The district court and court of appeals held that

petitioner failed to state a substantive due process claim

under the Fourteenth Amendment and 42 U.S.C. § 1983

for the delay and denial of building permits by the

respondent government officials. Review is limited to the

question “Whether an arbitrary, capricious or illegal

denial of a construction permit to a developer by officials

acting under color of state law can state a substantive due

process claim under 42 U.S.C. § 1983.”

Since this petition involves a dismissal for failure to

state a cause of action, petitioner’s allegations are taken

as true. Petitioner alleges that respondent officials have

intentionally engaged in a 15-year pattern of delay,

deception, and politically motivated manipulation of the

building permit process, with the ultimate consequence

of denying petitioner the opportunity to develop his

property.

In 1976, the Planning Board of Puerto Rico adopted a

resolution approving a development project proposed by

petitioner. The proposal was forwarded to the Regula-

tions and Permits Authority (ARPE), which performs

ministerial functions and issues building permits. In Feb-

ruary 1981, ARPE approved petitioner’s development

plans by formal resolution. Petitioner filed construction

drawings as required in February 1982. Thereafter, the

project encountered years of unexplained delay. In Febru-

ary 1987, the administrator of ARPE prepared a letter

establishing further conditions for the proposed develop-

ment, but his successor as administrator secretly locked

the letter in a drawer where it remained until disclosed in

discovery in this lawsuit. The reason for the delay and

deception was political opposition to the proposed devel-

opment.

In August 1988, after petitioner filed his initial action

in this matter, ARPE finally informed petitioner it would

not issue a construction permit and rescinded the prior

resolutions approving the project. The reasons given for

these actions were wilfully false. Review of these actions

by Puerto Rico courts is discretionary, and the courts

declined to exercise such discretionary review in this

case. Petitioner filed the present amended complaint in

October 1988. The district court granted respondent's

motion to dismiss, and the court of appeals affirmed that

decision.

SUMMARY OF ARGUMENT

The Fourteenth Amendment was enacted to protect

individuals in their lives, liberty, and property against

oppressive and arbitrary actions of state governments.

—_—

During the Reconstruction era in which the amendment

was adopted, state officials enforced laws that were

faciaily reasonable in a manner that nonetheless had the

intent and effect of depriving individuals of their rights.

So today do state and local officials sometimes manipu-

late the machinery of government in a manner offensive

to the Fourteenth Amendment's core purpose.

Substantive due process protects liberty and property

by ensuring that actions of state officials that have the

intent and effect of diminishing liberty or property must

rationally serve a legitimate government purpose even if

those actions are taken in conformity with appropriate

procedures. This doctrine leaves wide latitude for the

state’s police powers, even if exercised in mistaken or

misguided fashion. Substantive due process thus protects

against only the most outrageous abuses of government

power; but the doctrine is nonetheless vitally important,

since it provides one of the few substantive restraints on

oppressive actions of state officials.

The ruling below would extinguish this protection in

the context of property rights. Petitioner has alleged a

pattern of pernicious and abusive actions by government

officials that have prevented him from developing his

property. The ruling by the court below that these allega-

tions do not even state a cause of action under the Four-

teenth Amendment and 42 U.S.C. § 1983 is a serious

departure from the jurisprudence of this Court and other

circuits, as well as from the Fourteenth Amendment's

clear objectives. If upheld, the decision below would have

the effect of singling out property rights for non-protec-

tion under substantive due process, thereby depriving

.ndividuals of an important constitutional safeguard of

their property rights.

°

ARGUMENT

I. A CORE PURPOSE OF THE FOURTEENTH

AMENDMENT IS TO PROTECT PROPERTY

RIGHTS AGAINST ARBITRARY AND OPPRES-

SIVE ACTIONS OF STATE OFFICIALS

The southern states did not take lightly their defeat

in the Civil War. They determined that if they could not

perpetuate the institution of slavery as such, they would

maintain it as closely as practicable by denying to the

recently freed slaves the most basic rights of free individ-

uals.

The southern governments unleashed a torrent of

laws aimed at restricting freedom of contract, private

property rights, and the right to pursue trades and busi-

nesses. These measures included occupational licensing

laws, vagrancy laws, and “debt peonage” laws, many of

which were facially neutral but evil in intent and devas-

tating in effect. Together, they comprised a pervasive,

interlocking system of economic restraints designed to

maintain a servile labor supply and inhibit true emanci-

pation of blacks. See, e.g., G. Myrdal, An American

Dilemma 228-229 (1944); Civil Rights and the American

Negro 223-224 (A. Blaustein and R. Zangrando, eds.,

1968); R. Higgs, Competition and Coercion 7 and 134 (1977);

Roback, “Southern Labor Law in the Jim Crow Era:

Exploitative or Competitive?” 51 Univ. of Chicago L. Rev.

1161, 1163-1164 (1984).

Congress responded to these abuses by passing the

Civil Rights Act of 1866, which was designed, in the

words of its floor manager, Rep. James F. Wilson, to

secure “the absolute rights of individuals, such as ‘the

right of personal security, the right of personal liberty,

and the right to acquire and enjoy property.’ ” Blaustein

and Zangrando at 224-225. The act was quite specific in

guaranteeing to all citizens the right to

make and enforce contracts, to sue, be parties,

and give evidence, to inherit, purchase, lease,

sell, hold, and convey real and personal prop-

erty, and to full and equal benefit of all laws

[for] the security of persons and property... .

President Andrew Johnson vetoed the act on the

grounds that Congress lacked authority to enact it.

Though Congress overrode the veto, it moved at once to

safeguard the act’s provisions by “constitutionalizing”

them in the Fourteenth Amendment. See Siegan, “Eco-

nomic Liberties and the Constitution: Protection at the

State Level,” in Economic Liberties and the Judiciary 137-150

(J. Dorn and H. Manne, eds., 1987). The amendment’s

framers “viewed the trilogy of privileges and immunities,

due process, and equal protection of the laws as a caption

for the rights enumerated in the Civil Rights Act [of

1866].” H. Belz, Emancipation and Equal Rights: Politics and

Constitutionalism in the Civil War Era 122 (1978). The

amendment’s framers repeatedly defined the substantive

content of these provisions by reference to Justice Bush-

rod Washington's decision in Corfield v. Coryell, 6. F. Cas.

546, 551-552 (C.C.E.D. Pa. 1823), which included among

the “fundamental” rights of citizens “the enjoyment of

life and liberty, with the right to acquire and possess

property of every kind, and to pursue and obtain happi-

ness and safety, subject, nevertheless, to such restraints as

the government may justly prescribe for the general good

of the whole.” See Slaughter-House Cases, 83 U.S. 36, 75-76;

id. at 97-98 (Field, J., dissenting); id. at 114-118 (Bradley,

J., dissenting).' Congress subsequently enacted the Civil

Rights Act of 1871, creating a private cause of action,

codified as 42 U.S.C. § 1983, for deprivations of these

rights inflicted “under color of state law.”

This Court traditionally has protected property rights

and economic liberty under the due process and equal

protection clauses. The facts presented in Yick Wo v. Hop-

kins, 118 U.S. 356 (1886), are paradigmatic of the abuses

the Fourteenth Amendment was intended to remedy. In

that case, the San Francisco city government enacted an

ordinance requiring licenses, granted at the discretion of

the board of supervisors, for laundry businesses except

those in buildings made of brick or stone. Though the law

appeared benign, it was enforced to deny licenses to

Chinese entrepreneurs even though they “complied with

every reasonable condition demanded by any public

interest.” Id. at 366. Concluding that the power exercised

by the board of supervisors was “purely arbitrary, and

acknowledges neither guidance nor restraint,” the Court

struck down the city’s license denials as a violation of

' These rights were included among the “privileges or

immunities” of citizenship, but this clause of the Fourteenth

Amendment was eviscerated in the Slaughter-House Cases. This

decision is the subject of extensive criticism. See, e.g., C. Bolick,

Unfinished Business: A Civil Rights Strategy for America’s Third

Century 60-68 (1990); M. Curtis, No State Shall Abridge (1986); B.

Siegan, Economic Liberties and the Constitution 47-54 (1980).

due process and equal protection. The nature, theory, and

institutions of our government, the Court declared, “do

not mean to leave room for the play and action of purely

personal and arbitrary power.” Id. at 369-370.

The Court’s declaration in Yick Wo of what has come

to be the essence of substantive due process - that

oppressive government actions infringing on basic rights

are contrary to our constitutional system - continues to

have resonance today. Indeed, the proliferation at every

level of government of unelected bureaucrats? and regu-

latory agencies makes the exercise of government power

ever more susceptible to abuse and ever less accountable

through ordinary democratic processes.

The Fifth Circuit noted with alarm this propensity in

Aladdin's Castle, Inc. v. City of Mesquite, 630 F.2d 1029 (5th

Cir. 1980), rev'd in part and remanded, 455 U.S. 283 (1982),

opinion extended, 713 F.2d 137 (5th Cir. 1983). In Aladdin's

Castle, the city government induced a comf .y to make a

major investment in a local business, only to then deny it

a business license. The court invalidated the city’s actions

as a violation of due process and equal protection, declar-

ing that

We certainly have no wish to challenge the legit-

imacy of many, even most of the statutes, ordi-

nances and regulations issued by the

innumerable legislatures and agencies in our

modern and complex society. The era of Lochner

v. New York, 198 U.S. 45 [1905], is happily long

* Respondent Rodriguez, administrator of respondent

ARPE, is a political appointee who serves at the pleasure of the

governor. P.R. Laws Ann., tit. 23, § 7Ic.

ended. Nevertheless, recognition of the multiple

problems and needs of our contemporary world

does not oblige us to discard the basic principles

of constitutional government to which we have

always been committed... .

It is not the courts alone who are bound to

respect these freedoms. Executives and legisla-

tures, from the nation’s capital to the smallest

village . . . are called upon by our Constitution

to respect, enforce and cherish these principles

of liberty and personal autonomy.

Id. at 1044-1046. Despite its modest sweep in curtailing

only those oppressive actions that fall clearly outside a

state’s legitimate police powers, the doctrine of substan-

tive due process is a vitally important safeguard protect-

ing the lives, liberty, and property of individuals.

Il. A PATTERN OF DECEPTION, DELAY, AND

POLITICALLY MOTIVATED MANIPULATION OF

THE BUILDING PERMIT PROCESS STATES A

CLAIM UNDER THE FOURTEENTH AMEND-

MENT AND 42 U.S.C. § 1983

A. The dichotomy between property rights and other

rights is a false one. The First Circuit in its decision below

acknowledges that “ ‘substantive due process prevents

“governmental power from being used for purposes of

oppression,” or “abuse of government power that shocks

the conscience,” or “action that is legally irrational in that

it is not sufficiently keyed to any legitimate state inter-

ests.” PFZ Properties, Inc. v. Rodriguez, 928 F.2d 28,

31-32 (Ist Cir. 1991)(citations omitted). However, the

court appears to carve out a special exception to this

10

protection for the exercise of certain property rights,

holding as a matter of law that “refusals to issue building

permits do not ordinarily implicate substantive due pro-

cess.” Id. at 31. This is true, in the First Circuit’s view,

“le]lven where state officials have allegedly violated state

law or administrative decisions,” id., and even if such

violations are committed in bad faith. Id. at 32. This

doctrine of nonprotection of property development rights

allowed the court to conclude here that “[e]ven assuming

[respondent] engaged in delaying tactics and refused to

issue permits for the . . . project based on considerations

outside the scope of its jurisdiction under Puerto Rico

law, such practices, without more, do not rise to the level

of violations of the federal constitution” under substan-

tive due process. Id.

Although the court did not explain its rationale, the

only distinguishing factor between this case and other

cases in which similar abusive and oppressive actions of

government officials would trigger substantive due pro-

cess analysis is the species of rights involved - in this

case, the right to develop one’s property. Similarly, the

Seventh Circuit has created a special category for non-

protection of property rights under substantive due pro-

cess. New Burnham Prairie Homes, Inc. v. Village of Burn-

ham, 910 F.2d 1474 (7th Cir. 1990). Stating that “the

Supreme Court has yet to set the contours of any substan-

tive due process right with respect to property interests,”

id. at 1480 n.5, the Seventh Circuit held that in order to

state such a claim for the denial of a building permit, “in

addition to alleging that the decision was arbitrary or

irrational, ‘the plaintiff must also show either a separate

11

constitutional violation or the inadequacy of state law

remedies.’ ” Id. at 1481 (citation omitted).

The notion that property rights somehow do not rise

to the level of other rights with respect to substantive due

process protection has no support either in the decisions

of this Court or in the clear intent of the Fourteenth

Amendment. To the contrary, the preceding section illus-

trates that property rights were of foremost concern to

the amendment’s framers, who sought to protect those

rights against precisely the type of arbitrary and oppres-

sive interference at issue in this case.

Moreover, this Court has made clear that property

rights are not limited to mere ownership of property, but

the “right to possess, use, and dispose of it.” United States

v. General Motors, 323 U.S. 377-378 (1945). Indeed, as

Justice Harlan observed, the concept of due process

encompasses “a rational continuum which, broadly

speaking, includes a freedom from all substantial arbi-

trary impositions and purposeless restraints. ... ” Poe v.

Ullman, 367 U.S. 497, 543 (1961)(Harlan, J., dissent-

ing)(cited with approval in Moore v. City of East Cleveland,

431 U.S. 494, 502 (1977)(plurality)).

The Ninth Circuit has rejected the dichotomy sug-

gested by the court below. In Sinaloa Lake Owners Ass‘n v.

City of Simi Valley, 882 F.2d 1398 (9th Cir. 1989), cert.

denied sub nom. Doody v. Sinaloa Lake Owners Ass‘n, 110

S.Ct. 1317 (1990), the Ninth Circuit applied the same

substantive due process analysis it uses in police brutality

cases to allegations that local government officials mali-

ciously and unnecessarily violated private property

12

rights. In an opinion by Judge Alex Kozinski, the court

held that

the fourteenth amendment’s due process clause

protects property no less than life and liber-

ty... . To the extent that arbitrary or malicious

use of physical force violates substantive due

process, there is no principled basis for exemp-

ting the arbitrary or malicious use of other gov-

ernmental powers from similar constitutional

restraints.

Id. at 1408-1409. We urge the Court to adopt the Ninth

Circuit’s uniform approach to substantive due process

analysis as the rule most consistent with the theory of

rights embraced by the Fourteenth Amendment, and with

the overwhelming weight of precedent as discussed

below.

B. The facts as alleged state a substantive due process

cause of action. This Court has established the contours of

substantive due process scrutiny in a series of cases. In

Daniels v. Williams, 474 U.S. 327, 331 (1986), this Court

observed that “by barring certain government actions

regardless of the fairness of the procedures used to

implement them,” substantive due process “serves to

protect governmental power from being ‘used for pur-

poses of oppression’ .. . ” (citation omitted). The Court

noted that “[h]istorically, this guarantee of due process

has been applied to deliberate decisions of government

officials to deprive a person of life, liberty, or property”

(emphasis in original), in such contexts as real estate

assessment, driver’s license suspension, student corporal

punishment, and intentional destruction of a prison

inmate’s property. Id. By the same token, substantive due

13

process does not restrain negligent acts of state officials

which cause unintended loss or injury, see Daniels, id.; or

to lack of due care by prison officials. Davidson v. Cannon,

474 U.S. 344 (1986). Rather, substantive due process oper-

ates to prevent public officials from “abusing govern-

mental power, or employing it as an instrument of

oppression. ...” Id. at 348.

In such situations, the Court consistently has

weighed “the individual’s interest in liberty against the

State’s asserted reasons for restraining individual lib-

erty.” Youngberg v. Romeo, 457 U.S. 307, 321 (1982). This

analysis consists of a two-part test, which demands that a

law “shall not be unreasonably arbitrary or capricious,

and that the means selected shall have a real and substan-

tial relation to the object sought to be attained.” Nebbia v.

New York, 291 U.S. 502, 525 (1934).

Apart from the First and Seventh Circuits, the courts

of appeals have applied these standards in property

rights cases analogous to the present litigation, consis-

tently holding that facts like those alleged here state a

substantive due process cause of action under 42 U.S.C.

§ 1983. In Brady v. Town of Colchester, 863 F.2d 205 (2nd

Cir. 1988), for instance, the Second Circuit overturned

summary judgment that was granted against a claim that

a building permit was impermissibly revoked. Caution-

ing that “ ‘federal courts should not become zoning

boards of appeal’ ” and that a § 1983 cause of action is not

established “every time a local zoning board makes an

incorrect decision,” the court nonetheless held that the

plaintiffs had alleged facts that could allow them to

“prove that they were denied a permit not because of a

14

good faith mistake . . . but because of indefensible rea-

sons such as impermissible political animus.” Id. at

215-216 (citation omitted). Accord, Littlefield v. City of

Afton, 785 F.2d 596, 605-607 (8th Cir. 1986)(reviewing like

holdings of the Third, Fourth, Fifth, Sixth, Seventh,

Ninth, and Eleventh Circuits).

Likewise, in Bello v. Walker, 840 F.2d 1124, 1129-1130

(3rd Cir.), cert. denied, 488 U.S. 851 (1988), the Third

Circuit overturned a summary judgment award in favor

of a municipality that allegedly delayed consideration of

a building permit, since the plaintiffs

presented evidence from which a fact finder

could reasonably conclude that certain council

members . . . improperly interfered with the

process by which the municipality issued build-

ing permits, and that they did so for partisan

political or personal reasons unrelated to the

merits of the application for the permits. These

actions can have no relationship to any legiti-

mate governmental objective, and if proven, are

sufficient to establish a substantive due process

violation actionable under section 1983.

In Bateson v. Geisse, 857 F.2d 1300 (9th Cir. 1988), the

Ninth Circuit held that a denial of a building permit

under circumstances similar to the present case amounted

to a constitutional violation. As the court summarized the

facts,

The City Council voted to withhold Bateson’s

building permit without providing Bateson with

any process, let alone “due” process. This sort of

arbitrary administration of the local regulations,

which singles out one individual to be treated

15

discriminatorily, amounts to a violation of that

individual’s substantive due process rights.

Id. at 1303.

These precedents do not give courts open-ended

authority, but limit substantive due process scrutiny to

the most outrageous abuses of government power. As

Judge Kozinski summarized the applicable parameters in

Sinaloa Lake, 882 F.2d at 1409:

To be sure, governmental entities must have

much latitude in carrying out their police power

responsibilities; mere errors of judgment, or

actions that are mistaken or misguided, do not

violate due process. But malicious, irrational

and plainly arbitrary actions are not within the

legitimate purview of the state’s power.

As the First Circuit itself observed in Amsden v.

Moran, 904 F.2d 748, 754 n.5 (1st Cir. 1990), cert. denied,

111 S.Ct. 713 (1991), “In the substantive due process

context, the requisite arbitrariness and caprice must be

stunning, evidencing more than humdrum legal error.”

To characterize as “humdrum legal error” the facts

alleged in the complaint here - a 15-year pattern of delay,

deception, and politically motivated manipulation of the

building permit process - is to trivialize, and indeed to

negate altogether, the precious private property rights

that are at the core of the Fourteenth Amendment's guar-

antee. We therefore urge the Court to agree with the

precedents of the majority of circuits that facts such as

these state a substantive due process claim under 42

U.S.C. § 1983.

16

C. The substantive due process claim alleged here is

complementary to, but not duplicative of, a takings claim

under the Fifth Amendment. Many of the lawsuits challeng-

ing arbitrary denials of property development rights

allege both “takings” claims under the Fifth Amendment

as well as substantive due process claims under the Four-

teenth Amendment. While these claims often overlap, we

believe it essential to preserve a separate substantive due

process cause of action for arbitrary and oppressive

actions that impair property rights.

The first and most important distinction between the

two causes of action in this context is that the takings

clause generally “does not prohibit the taking of private

property, but instead places a condition on the exercise of

that power.” First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles, 482 U.S. 304, 314

(1987)(citations omitted). Unlike substantive due process,

which seeks to prevent government officials from “abu-

sing governmental power, or employing it as an instru-

ment of oppression,” Davidson, 474 U.S. at 348, the

takings clause “is designed not to limit the governmental

interference with property rights per se, but rather to

secure compensation in the event of otherwise proper

interference amounting to a taking.” First English, 482

U.S. at 314-315 (emphasis in original). Hence, while com-

pensation may be available even for temporary takings

that “deny a landowner all use of his property,” id. at 318,

a “substantive due process claim does not require proof

that all use of the property has been denied [citation

omitted], but rather that the interference with property

rights was irrational or arbitrary.” Bateson v. Geisse, 857

F.2d at 1303.

17

Moreover, although this Court has suggested that a

taking of private property may be proscribed if it is not

rationally related to a legitimate public purpose, Hawaii

Housing Authority v. Midkiff, 467 U.S. 229, 241 (1984),

substantive due process is more amenable to equitable

relief, such as writs of mandamus, that are often neces-

sary to vindicate the property rights at issue. This is

especially significant in light of a number of decisions

holding that takings claims are not ripe until state com-

pensation proceedings are exhausted, whereas federal

substantive due process claims are ripe the moment the

constitutional injury occurs. See, e.g., Sinaloa Lake, 882

F.2d at 1402-1404 and 1407; accord, Bateson v. Geisse, supra;

Littlefield v. City of Afton, supra. In the instant case, plain-

tiffs have alleged constant delays in processing their per-

mit applications and that state procedures are unavailing

to protect their constitutional rights; hence, immediate

equitable relief is the only meaningful remedy to vindi-

cate their rights.

Finally, takings claims offer limited recourse where

the governmental actions do not involve a physica! taking

of real property, but rather the opportunity to pursue a

profession or occupation. In these situations, substantive

due process and equal protection are among the few

available limitations of oppressive governmental actions

that impair economic liberties protected under the Four-

teenth Amendment. See Yick Wo, supra. As a consequence,

we urge the Court to preserve carefully defined substan-

tive due process protections for property rights.

¢

18

CONCLUSION

For all the foregoing reasons, amicus curiae Institute

for Justice respectfully requests that this honorable Court

reverse the opinion below.

* Counsel of Record

Respectfully submitted,

Wituiam H. Me tok, III

*CLINT BOLicK

JONATHAN W. Emorp

Scott G. BuLLOcK

Institute for Justice

1001 Pennsylvania Avenue, NW

Suite 200 South

Washington, DC 20004

(202) 457-4240

Attorneys for Amicus Curiae