IN Land Co v. City of Greenwood ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-3662
INDIANA LAND COMPANY, LLC,
Plaintiff-Appellant,
v.
CITY OF GREENWOOD,
Defendant-Appellee.
____________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. IP 01-0533-C-B/G—Sarah Evans Barker, Judge.
____________
ARGUED MARCH 30, 2004—DECIDED AUGUST 10, 2004
____________
Before POSNER, RIPPLE, and MANION, Circuit Judges.
POSNER, Circuit Judge. The plaintiff, a real estate developer,
brought suit for damages against the City of Greenwood,
Indiana, under 42 U.S.C. § 1983, charging violations of the
due process and equal protection clauses of the Fourteenth
Amendment. The district court granted summary judgment
in favor of the City, and the developer has appealed. The
facts, which concern events that occurred in 2000, are not in
dispute. The plaintiff had signed a contract to buy 142 acres
adjoining the City for development as a residential subdivi-
sion. For such development to be possible, the plaintiff had
2 No. 03-3662
to get the City to annex the acreage and rezone it from
agricultural to residential use. The contract was made
conditional on the plaintiff’s obtaining these legal changes
from the City.
The authority of the City Council of Greenwood to make
such changes is not contested. The plaintiff had first, how-
ever, to submit its proposal to the City’s Plan Commission.
The Commission didn’t like the proposal and recommended
that the City Council turn it down. The Council convened a
public hearing, and after discussion voted on the plaintiff’s
proposal. The vote was 3-3. The Council has seven mem-
bers, but one was absent. State law provides that a mayor,
although he shall preside at meetings of his city’s council,
may vote only to break a tie. Ind. Code 36-4-6-8(b). But since
there was a tie, the Mayor of Greenwood voted—to grant
the plaintiff’s application. A member of the Council ob-
jected, pointing out that an ordinance of Greenwood
required a two-thirds vote to overturn a recommendation of
the Plan Commission. The state zoning statute, however,
provides that a city council or other legislative body “may
take action . . . only by a vote of at least a majority of all the
elected members of the body.” Ind. Code 36-7-4-609(b). More-
over, “if there is a constitutional or statutory provision re-
quiring a specific manner for exercising a power, a unit
wanting to exercise the power must do so in that manner.”
Ind. Code 36-1-3-6(a).
The Council directed the City Attorney to research the
legality of the two-thirds ordinance in light of these stat-
utory provisions. She did so and advised the Council that in
her opinion the two-thirds requirement was invalid because
inconsistent with still another Indiana statute, which
provides that “a majority vote of the legislative body is
required to pass an ordinance, unless a greater vote is
required by statute.” Ind. Code 36-4-6-12. A public hearing
No. 03-3662 3
was convened at which the Council debated the issue and
concluded that the ordinance’s two-thirds requirement was
valid, noting among other reasons for so concluding that the
state statute(s) could be interpreted as making a majority
vote a floor rather than (also) a ceiling. Yet having so
concluded and having gone on to decide that since the
requirement was valid the plaintiff’s application had been
validly denied, the Council forthwith repealed the require-
ment with respect to future decisions on recommendations
of the Plan Commission; approvals would henceforth
require only a simple majority.
The Mayor advised the plaintiff to make some changes in
its application and resubmit it to the Plan Commission,
which was done and this time the Commission recommended
that the Council approve the plaintiff’s application. The
Council convened another public hearing to consider the
matter. At this meeting (the third on the plaintiff’s applica-
tion), with all members present, the Council voted down the
application by a 4-3 vote, precipitating this suit. As a result
of the Council’s action the contract lapsed and the plaintiff
didn’t get to develop the 142 acres; we learned at argument
that another developer later received the approval that the
plaintiff had sought and that the tract is now indeed a
residential subdivision.
The City argues that the majority vote against the plaintiff’s
application in the last meeting makes the lawsuit moot.
Since a majority of the Council voted down the application
when the Plan Commission had approved it (and by a
lopsided vote of 8-2), how likely is it that the Council, had
it not been for the absence of one of its members, would
have approved it earlier when the Plan Commission had
recommended against approval? Not as unlikely as may
seem, because the Council member who had missed the first
vote voted in favor of the application at the final hearing
4 No. 03-3662
and might have done so at the first meeting despite the
adverse recommendation of the Plan Commission and the
fact that the plaintiff had sweetened its application between
the first and third hearings. But it doesn’t matter how likely
or unlikely this was. For what the plaintiff is seeking is a
determination that the first vote taken by the Council, the
one that approved the plaintiff’s application though by less
than a two-thirds vote, was valid, in which event there would
have been no second, negative vote. In effect, there was a
change in membership between the two votes (the mayor,
in the first vote, was replaced in the second vote by the
member of the City Council who had been absent when the
first vote was taken), and the plaintiff is arguing that the
change violated the Fourteenth Amendment and therefore
should have no legal effect. And if it has no legal effect, only
the vote approving the plaintiff’s application is in the
picture. It is thus like a case in which the plaintiff loses a
bench trial and argues that he was entitled to a jury trial; his
appeal is not moot even if the appellate court is confident
that a jury would have come to the same conclusion as the
trial judge.
So let us turn to the merits of the appeal, beginning with
the due process issue. There is an initial question whether
the plaintiff was deprived of “property” within the meaning
of the due process clause when the City Council turned
down its application for annexation and rezoning. Were the
plaintiff complaining of being deprived of the 142 acres that
it had contracted to buy, the complaint might fail, as in
Bryan v. City of Madison, 213 F.3d 267, 274-76 (5th Cir. 2000),
because a contract to buy something is not tantamount to
ownership of the thing. But the plaintiff was deprived of a
contract right, and so we must ask when does a contract
right rise to the dignity of constitutional “property”? It is
settled that the right not to be fired without cause—the right
that employment contracts terminable before the expiration
No. 03-3662 5
of their term only for cause create—is constitutional prop-
erty. Board of Regents v. Roth, 408 U.S. 564, 576-77 (1972). But
the status of other contract rights (other than a contractual
right merely to procedural protections, which has uniformly
been held not to create constitutional property, Campbell v.
City of Champaign, 940 F.2d 1111, 1113 (7th Cir. 1991), and
cases cited there) is unsettled, though most cases to address
the issue reject the position that all contract rights are constitu-
tional property. Glatt v. Chicago Park Dist., 87 F.3d 190, 192-93
(7th Cir. 1996); Bernard v. United Township High School Dist.
No. 30, 5 F.3d 1090, 1091, 1093 (7th Cir. 1993); Linan-Faye
Construction Co. v. Housing Authority of City of Camden, 49
F.3d 915, 931-32 (3d Cir. 1995); Martz v. Incorporated Village of
Valley Stream, 22 F.3d 26, 31 (2d Cir. 1994); San Bernardino
Physicians’ Services Medical Group, Inc. v. County of San
Bernardino, 825 F.2d 1404, 1407-10 (9th Cir. 1987); but see
General Electric Co. v. New York State Dept. of Labor, 936 F.2d
1448, 1453 (2d Cir. 1991). These cases reflect a natural
reluctance to port the entire body of disputes arising from
the public contracts of the states to federal court. The dif-
ficult question is where within the universe of such con-
tracts to draw the line. Mid-American Waste Systems, Inc. v.
City of Gary, 49 F.3d 286, 289-92 (7th Cir. 1995).
As an original matter, one might suppose “property” lim-
ited to interests that the law protects by means of injunc-
tions or criminal prosecutions, and of course the normal
remedy for a breach of contract is merely an award of dam-
ages. The contract promisor is free to walk away from his
contract, leaving the promisee with merely a money claim;
but he is not free to steal the promisee’s vase and say, it’s
mine for keeps but you can sue me for the dollar value of it.
The Roth line of cases is based, however, on the idea of the
“new property”—that in a modern society a person’s
principal assets are intangible and that one of the most
valuable of these is the job security conferred by a contract
6 No. 03-3662
of employment terminable (before its term is up) only for
cause. At the opposite extreme would be a contract that had
merely granted the plaintiff an option—a right to assert a right
and thus, it might be thought, an interest so tenuous as to be
remote from property that one clings to because it is valu-
able or one is committed. In Pro-Eco, Inc. v. Board of Commis-
sioners, 57 F.3d 505, 512-13 (7th Cir. 1995), we left open the
question whether an option is constitutional property.
The plaintiff’s contract to buy the 142 acres was not an
option; the plaintiff was committed, provided only that the
City Council came through. If having signed the contract the
plaintiff decided not to seek the Council’s approval, that
would not have entitled it to repudiate the contract. Still, the
purely commercial interest of which the plaintiff was
deprived doesn’t seem to be the kind of contractual interest
that the values that inform the concept of due process
require to be classified as property.
The question when contracts with a state agency create
constitutional property is less momentous than might ap-
pear. All states provide judicial remedies for breach of
contract and these remedies will almost always provide all
the process that is constitutionally due, making the question
whether the contract right was also a property right aca-
demic. Not in this case, because the state actor (the City
Council) is accused of interfering with a contract rather than
breaking one of its own contracts. Nevertheless, there is no
need to decide whether the plaintiff was deprived of a
property right by the Council’s action, because there was no
denial of due process.
When zoning decisions are confided to a legislative rather
than a judicial body (the City Council of Greenwood is the
former), the affected persons have no right to notice and an
opportunity for a hearing: no right, in other words, to
procedural due process. City of Eastlake v. Forest City
No. 03-3662 7
Enterprises, Inc., 426 U.S. 668, 672-77 (1976); Bi-Metallic
Investment Co. v. State Bd. of Equalization, 239 U.S. 441, 445-46
(1915); Pro-Eco, Inc. v. Board of Commissioners, supra, 57 F.3d
at 513; River Park, Inc. v. City of Highland Park, 23 F.3d 164,
166-67 (7th Cir. 1994); Dawson v. Milwaukee Housing Author-
ity, 930 F.2d 1283, 1286 (7th Cir. 1991); Coniston Corp. v.
Village of Hoffman Estates, 844 F.2d 461, 468-69 (7th Cir.
1988). But legal principles generally and perhaps in this in-
stance as well are limited by their rationales. An important
reason for not requiring notice and an opportunity for a hear-
ing when legislative action is at issue is that legislation
normally is general in its scope rather than targeted on a
specific individual, and its generality provides a safeguard
that is a substitute for procedural protections. The greater
the number of people burdened by a proposed law, the
easier it is to mobilize political resistance, and the likelier
moreover that the burdened class includes constituents of
the legislators proposing to impose the burden. If a legisla-
ture can focus burdens laser-like on a hapless individual, he
has no political remedy, while if it has to place an equal bur-
den on many others he has a political remedy in concert
with the others. This is the essential insight behind the equal
protection clause. Club Misty, Inc. v. Laski, 208 F.3d 615, 620
(7th Cir. 2000).
But as our cases recognize, the tinier the burdened group—
and here it is a single firm, though this is a little misleading
because the firm has employees, shareholders, suppliers,
and customers all of whom may be adversely affected by the
denial of the land-use changes that it sought—the weaker is
the equal-burden rationale for denying procedural rights in
legislative hearings and the stronger therefore is the case for
granting such rights in the name of due process. Pro-Eco,
Inc. v. Board of Commissioners, supra, 57 F.3d at 513; Coniston
Corp. v. Village of Hoffman Estates, supra, 844 F.2d at 469;
Philly’s v. Byrne, 732 F.2d 87, 92-93 (7th Cir. 1984). How
8 No. 03-3662
much stronger we needn’t decide in this case. The plaintiff
had ample notice of the City Council’s consideration of its
application, and two hearings at which to present its case
(the first and the third: the second hearing was a public
debate in the Council on the validity of the two-thirds
provision in the ordinance, but the public was not permitted
to participate in the debate). True, the plaintiff may not have
known—this is a disputed matter—that the two-thirds
requirement would be sprung on it. But the validity of the
requirement was not an issue going to the merits of the
application. It was merely an internal procedural rule, and
it seems to us—we cannot find a case on the point—that due
process does not require a judicial or legislative body to
disclose its rules for voting, as long as those rules don’t
themselves violate due process. No doubt the more a party
knows about his tribunal the better able he is to present his
case, but we cannot find a stopping point to the principle
that the plaintiff is urging—must the Supreme Court
disclose that it takes only four votes to grant certiorari, and
must this court disclose the identity of the members of its
panels before the day of argument?
But due process has long been understood to have a sub-
stantive as well as a procedural dimension. A legal rule that
deprives a person of property has to be rational. Washington
v. Glucksberg, 521 U.S. 702, 728 (1997); Martinez v. California,
444 U.S. 277, 281-83 (1980); Vlandis v. Kline, 412 U.S. 441, 446
(1973); Nectow v. City of Cambridge, 277 U.S. 183, 188 (1928);
Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 394-95
(1926); Lee v. City of Chicago, 330 F.3d 456, 467 (7th Cir. 2003).
Maybe in some circumstances supermajority requirements
would be irrational—though because they favor the status
quo such requirements tend rather to protect than to impair
property. However that may be, the plaintiff has not shown
that requiring a two-thirds vote by the Greenwood City
Council to reject a recommendation of its Plan Commission
No. 03-3662 9
is irrational. The City might rationally desire to accord some
deference to the recommendations of the body that special-
izes in zoning matters. But since the City Council is not an
adjudicative body and as far as we know has no lawyers
among its members, the usual device for assuring deference
to the first-line decisionmaker—the adoption of a deferential
standard of review, such as clear error or abuse of discretion
or substantial evidence—would not be feasible and a simple
alternative is to require that the Plan Commission can be
overridden only by a supermajority vote.
What is true is that the two-thirds requirement may have
violated state law, though we are less confident of that than
either the plaintiff or the Greenwood City Attorney is. The
statutes that we quoted earlier require at least a majority
vote unless another statute requires more. But it is easier to
see why the state legislature would want to prevent city
councils from adopting ordinances by a vote of less than a
majority of the members than why it would impose a flat
prohibition on a council’s adopting a supermajority require-
ment for particular types of vote. The Indiana Supreme
Court has never spoken to the question, and the decisions
by the intermediate appellate courts of the state that the
plaintiff cites in support of the City Attorney’s position, City
of Evansville v. Fehrenbacher, 517 N.E.2d 111 (Ind. App. 1987);
Smith v. City of Shelbyville, 462 N.E.2d 1052 (Ind. App. 1984),
are not in point.
In any event an error of state law is not a violation of due
process. Gryger v. Burke, 334 U.S. 728, 731 (1948); Pro-Eco,
Inc. v. Board of Commissioners, supra, 57 F.3d at 514. The
plaintiff acknowledges this but argues that a state’s failure
to provide an avenue of judicial review of such an error is
a denial of due process. There are indeed situations in which
the hearing that is required to be offered a person before he
can be deprived of life, liberty, or property consistently with
10 No. 03-3662
due process must have a judicial component. A person
could not lawfully be executed on the basis of an adminis-
trative hearing with no right of judicial review. Cf. Zadvydas
v. Davis, 533 U.S. 678, 690-92 (2001); Ng Fung Ho v. White,
259 U.S. 276, 284-85 (1922). It is exceedingly doubtful that
the principle generalizes to a zoning decision, but even if it
does, the plaintiff acknowledges as it must that it could
have asked an Indiana state court for a declaration that the
two-thirds requirement was void by virtue of the statutes
we’ve quoted. Ind. Code § 34-14-1-2. This is true even
though the part of the ordinance that the plaintiff objected
to had been repealed, since the plaintiff’s right to develop
the 142 acres depended on whether the two-thirds require-
ment had been lawful when applied. Ashness v. Tomasetti,
643 A.2d 802, 808 (R.I. 1994), overruled on other grounds in
Kildeer Realty v. Brewster Realty Corp., 826 A.2d 961 (R.I.
2003); Mullendore v. School Dist. No. 1, 388 N.W.2d 93, 96, 99-
100 (Neb. 1986) (per curiam); Shelton v. Reeder, 121 So. 2d
145, 149-50 (Fla. 1960).
The plaintiff argues that declaratory relief wouldn’t have
been adequate because such relief wouldn’t have given it
any damages or come in time to prevent its land contract
from lapsing. The plaintiff could however have sought ac-
celerated consideration by the court that it asked for a de-
claration. Ind. Tr. Pro. R. 57. Its failure to seek judicial relief
leaves us without any basis for thinking that the declara-
tory-judgment remedy is in fact inadequate in a case like
this to preserve a right to judicial correction of an error of
state law.
The last question presented by the appeal is whether the
plaintiff has mounted a strong enough “class of one” equal
protection case to withstand summary judgment. In the
usual equal protection case the plaintiff is complaining about
discrimination against a group to which he belongs, such as
No. 03-3662 11
a racial minority. But Village of Willowbrook v. Olech, 528 U.S.
562 (2000) (per curiam), confirming earlier decisions by this
court (including the decision that the Supreme Court was
reviewing), holds that an individual who does not claim
membership in any group narrower than the human race
can still obtain a remedy under the equal protection clause
for “irrational and wholly arbitrary” treatment. Id. at 565.
We held in Hilton v. City of Wheeling, 209 F.3d 1005, 1008
(7th Cir. 2000), “that to make out a prima facie case the
plaintiff must present evidence that the defendant deliber-
ately sought to deprive him of the equal protection of the
laws for reasons of a personal nature unrelated to the duties
of the defendant’s position.” See also Purze v. Village of
Winthrop Harbor, 286 F.3d 452, 455 (7th Cir. 2002); Cruz v.
Town of Cicero, 275 F.3d 579, 587 (7th Cir. 2001); Bell v.
Duperrault, 367 F.3d 703, 709-13 (7th Cir. 2004) (concurring
opinion). The only evidence presented in this case that might
satisfy this demanding test is the City Council’s action in
abrogating the two-thirds rule in favor of a simple majority
immediately after reaffirming its rejection of the plaintiff’s
application that had garnered a simple majority at the pre-
vious meeting. That is not enough evidence to indicate that
the Council was impelled by ill will or exploitative or
otherwise illegitimate motives. All the Council was doing
was refusing to make its new rule, that of a simple majority,
retroactive.
Nor can vindictiveness or other impropriety be inferred
from the act of the Council member at the first meeting in
dredging up what may have been the largely forgotten or
ignored two-thirds ordinance. The plaintiff points out that
three years earlier the Council had rejected a recommenda-
tion of the Plan Commission by a 4-3 vote and no one had
brought up the two-thirds ordinance. But there is nothing
suspicious about a loser’s looking for a legal basis for inval-
idating the vote that he (in this case she) lost. Nothing, in
12 No. 03-3662
short, to distinguish this case from any other zoning dispute
in which the proponent of a zoning change loses. See
Creative Environments, Inc. v. Estabrook, 680 F.2d 822, 831-34
(1st Cir. 1982).
It is true that in two cases decided after Hilton, Nevel v.
Village of Schaumburg, 297 F.3d 673, 681 (7th Cir. 2002), and
Albiero v. City of Kankakee, 246 F.3d 927, 932 (7th Cir. 2001),
panels of this court stated, without reference to Hilton, that
as an alternative to the standard laid down in that case a
class-of-one case could be proved simply by showing that
the defendant had intentionally treated the plaintiff differ-
ently from others similarly situated and had had no rational
basis for doing so. There is tension between these cases and
Hilton (and cases in other circuits that are like Hilton), Bell v.
Duperrault, supra, 367 F.3d at 711 (concurring opinion), but
this is not the case in which to try to resolve it. There was a
rational ground for applying the ordinance to an existing
recommendation of the Plan Commission but not to future
recommendations; it is the rationality of declining to apply
new rules retroactively.
AFFIRMED.
RIPPLE, Circuit Judge, concurring. I join the judgment of
the court and the majority opinion with the exception of the
dicta in the last paragraph that suggests, quite gratuitously,
that a tension exists between this court’s opinion in Hilton
v. City of Wheeling, 209 F.3d 1005 (7th Cir. 2000), and its
opinions in Nevel v. Village of Schaumburg, 297 F.3d 673 (7th
Cir. 2002), and Albiero v. City of Kankakee, 246 F.3d 927 (7th
Cir. 2001).
No. 03-3662 13
The majority opinion implies that Hilton, requiring proof
of animus toward the plaintiff (rather than simple proof that
the defendant intentionally treated the plaintiff differently
from others similarly situated without rational basis for
doing so), is the stronger “class of one” analysis. However,
in Village of Willowbrook v. Olech, 528 U.S. 562 (2000) (per
curiam), the Supreme Court stated: “Our cases have recog-
nized successful equal protection claims brought by a ‘class
of one,’ where the plaintiff alleges that she has been inten-
tionally treated differently from others similarly situated and
that there is no rational basis for the difference in treatment.”
Id. at 564 (citing cases). Nevel and Albiero track explicitly the
Supreme Court’s holding and are wholly consistent with its
rationale. Notably, the Supreme Court explicitly declined to
address the “alternative theory of ‘subjective ill will’ ” that
the majority now implies is the correct rule. Id. at 565.
By incorporating the language of Village of Willowbrook, Nevel
and Albiero provide a sound framework that is entirely
faithful to the controlling precedent of the Supreme Court.
Moreover, in Albiero, the court, citing cases older than Hilton,
further acknowledged that our circuit has permitted a cause
of action to stand when the plaintiff alleges that ill will caused
the unequal treatment of individuals who are prima facie
identical. See Albiero, 246 F.3d at 932. This approach, char-
acterized as an alternate theory by the Supreme Court in
Village of Willowbrook, has yet to receive the Supreme Court’s
1
blessing. Indeed, in the final analysis, this latter formulation
1
“These allegations, quite apart from the Village’s subjective
motivation, are sufficient to state a claim for relief under tra-
ditional equal protection analysis. We therefore affirm the judg-
ment of the Court of Appeals, but do not reach the alternative
theory of ‘subjective ill will’ relied on by that court.” Village of
(continued...)
14 No. 03-3662
may be simply a salutary method of establishing proof of
discriminatory intent, an established prerequisite of an
equal protection violation. See McDonald v. Village of
Winnetka, 371 F.3d 992, 1002 n.3 (7th Cir. 2004). Thus, the
suggestion of “tension,” along with the suggestion that
Nevel and Albiero deviate from established national law, is
unnecessary and inaccurate.
In all other respects, I am pleased to join the judgment and
opinion of the court.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
1
(...continued)
Willowbrook v. Olech, 528 U.S. 562, 565 (2000); see Bell v. Duperrault,
367 F.3d 703, 711 (7th Cir. 2004) (Posner, J., concurring) (acknowl-
edging that, given the Supreme Court’s holding in Village of
Willowbrook, insistence on subjective ill will as the free-standing
test “may be fighting a doomed rearguard action”).
USCA-02-C-0072—8-10-04