Norton v. Corrales, Village Of

PUBLISH
UNITED STATES COURT OF APPEALS
Filed 12/23/96
TENTH CIRCUIT
RICHARD E. NORTON, CAROLYN A. NORTON, )
NORCO, INC., )
)
Plaintiffs-Appellants, )
)
v. ) No. 96-2017
)
CORRALES, VILLAGE OF, a New Mexico Municipal)
corporation; CORRALES VILLAGE COUNSEL; )
CORRALES PLANNING AND ZONING COM- )
MISSION; TINA DOMINGUEZ, officially as )
Corrales Village Clerk; PHIL RIOS, Village Admin- )
istrator; ROBERT BORMAN, Commissioner; )
GARY KANIN, Mayor, Village of Corrales; )
CHRISTINA ALLEN, Councilor; STEVE BRAND, )
Councilor, LAWRENCE VIGIL, Councilor; ROBERT )
HASSLACHER, Councilor; FRED HASHIMOTO, )
Councilor; FRANK GONZALES, Commissioner; )
JOHN CALLAN, Commissioner; GILBERT LOPEZ, )
Commissioner; ROBERTA KING, each in their )
official capacities for the Village of Corrales and )
individually, )
)
Defendants-Appellees. )
Appeal from the United States District Court
for the District of New Mexico
(D.C. No. CIV 94-1447)
Richard E. Norton, Pro Se.
James A. Cleland, Durango, Colorado, for Plaintiffs-Appellants Carolyn A. Norton and
Norco, Inc.
Paul R. Ritzma, Legal Bureau/RMD, State of New Mexico, Santa Fe, New Mexico, and
David Mathews, of Mathews and Davis, Rio Rancho, New Mexico, for Defendants-
Appellees.
Before BRORBY, RONEY* and LOGAN, Circuit Judges.
LOGAN, Circuit Judge.
Plaintiffs Richard E. Norton, Carolyn A. Norton, and Norco, Inc., landowners and
developers, brought this action against defendants Village of Corrales, Corrales Planning
and Zoning Commission, and various officials, alleging civil rights, antitrust and state law
violations in connection with plaintiffs’ attempts to gain approval to develop subdivisions
within the Village. The district court dismissed with prejudice all of plaintiffs’ federal
law claims under Fed. R. Civ. P. 12(b)(6), and declined to exercise supplemental jurisdic-
tion over plaintiffs’ request for a declaratory judgment on the validity of Village ordi-
nances. Although plaintiffs state the issues differently,1 the essence of the appeal is
*
The Honorable Paul H. Roney, Senior Circuit Judge, United States Court of
Appeals for the Eleventh Circuit, sitting by designation.
1
Plaintiffs assert the district court (1) abused its discretion in dismissing with
prejudice plaintiffs’ claims pursuant to Rule 12(b)(6); and further erred in (2) finding
facts other than those set forth in the pleadings; (3) considering the affirmative defense of
(continued...)
2
whether plaintiffs have asserted a viable claim of denial of procedural or substantive due
process or equal protection rights.2
I
Plaintiff Richard E. Norton has worked as a developer in the Corrales area for the
past twenty years. He and his wife, plaintiff Carolyn A. Norton, formed the plaintiff
corporation, Norco, Inc., to engage in the business of land development. The complaint
alleged that in the spring of 1992, shortly after some new Village anti-development
officials were elected and/or appointed, plaintiffs encountered difficulties in gaining
approval for subdivision applications filed with the Planning and Zoning Commission
(the Zoning Commission).3
Plaintiffs’ thirty-five-page complaint alleges civil rights violations by defendants
based upon the Village’s refusal to issue Richard Norton a registration permit to do
business in the Village, refusals to accept plats signed by him, and delays in approving
land development plats of property owned by plaintiffs. The complaint also alleges that
defendants were biased and prejudiced against plaintiffs because they personally disliked
1
(...continued)
qualified immunity; and (4) refusing to address the validity of the Village ordinances and
defendants’ knowledge of their validity.
2
Plaintiffs have not addressed the district court’s dismissal of their asserted
violations of federal antitrust law on appeal. Hence, we consider that they have not
appealed that aspect of the district court’s judgment.
3
The Village of Corrales Council delegated its authority to enact and enforce
subdivision controls to the Zoning Commission, with appeals to the Village Council.
3
plaintiff Richard Norton and plaintiffs’ business of providing low to moderate income
housing in a community.
From the complaint and defendants’ answer it is clear plaintiffs’ suit is grounded
upon claims that (1) the Village has no right to require Richard Norton to obtain a
business registration permit--and if it does, no right to require him to provide a physical
address;4 (2) the Village has no right to delay and deny approval of plaintiffs’ plats, in
part because of a thirty-five-day approval rule set out in N.M. Stat. Ann. § 3-20-7E;5 and
(3) plaintiffs have a federal constitutional right to have their development plans evaluated
by unbiased Village officials.
Standing in plaintiffs’ way on the first two of these claims are Village ordinances
246 (requiring registration of persons proposing to engage in business within the Village),
Appellants’ App. 69, and 8-2-9(E) (requiring final plats to be approved or disapproved
4
The complaint asserts Richard Norton’s application for “a registration” was
repeatedly refused because he “had no physical place of business within the Village, even
though such a requirement is found nowhere in any local or state ordinances or statutes.”
Appellants’ App. 48.
5
The statute provides in part:
The planning authority of a municipality shall approve or disapprove
a plat within thirty-five days of the day of final submission of the plat. If
the planning authority does not act within thirty-five days, the plat is
deemed approved and upon demand the planning authority shall issue a
certificate approving the plat.
N.M. Stat. Ann. § 3-20-7E.
4
within thirty-five days “of the day that the provisions hereof have been complied with by
the developer”).
Plaintiffs assert that the ordinances are void for failure to comply with the publica-
tion requirement imposed by a New Mexico statute. See N.M. Stat. Ann. § 3-17-3.
Defendants deny that they were not properly published, but also assert the publication
requirement can be met by posting within the Village when there is no newspaper
maintaining an office in the municipality. See id. § 3-1-2J. The district court did not
resolve this issue. Plaintiffs assert the district court erred in refusing to consider the
validity of the ordinances, because holding the ordinances invalid under state law would
make applicable the state statute that plaintiffs rely on to establish their property right to
plat approval. This court has stated that when an attack on the validity of a city ordinance
“is limited to the claim that the ordinance violates state law[] Federal courts do not review
such a claim under the jurisdiction conferred by 28 U.S.C. § 1331 [federal question] and
the result of error in the administration of state law, though injury may result, is not a
matter of federal judicial cognizance under the due process clause of the fourteenth
amendment.” International Harvester Co. v. City of Kansas City, 308 F.2d 35, 38 (10th
Cir. 1962), cert. denied, 371 U.S. 948 (1963). This is the only case our search found
discussing whether a court, exercising federal question jurisdiction, will review the
validity under state law of an act passed by a legislature. Although Harvester remains the
5
law of this circuit, the result would be the same whether or not the challenged ordinances
were validly adopted.
II
We first consider plaintiffs’ due process claims on the assumption the Village
ordinances were validly enacted under state law. The entire wording of Village ordinance
246, requiring registration of persons proposing to do business with the Village, is
nowhere set out in the record. But there is no federal constitutional impediment to
requiring such a registration. See Western and Southern Life Ins. Co. v. State Bd. of
Equalization, 451 U.S. 648 (1981) (right to conduct business may be conditioned by
state). At oral argument defendants asserted that the reason for requiring a physical
address as part of the registration requirement was to insure Richard Norton had an in-
state address at which he could be served with legal process. This reason is sufficiently
rational to justify the requirement; and it is clear from the pleadings that Norton was
repeatedly informed that his failure to provide a physical address was the reason for the
denial. Appellants’ App. 48. Even if the physical address requirement was not expressly
stated in the ordinance, this unwritten addition violates no constitutional right. Further,
there was no reason to hold a hearing when Norton refused or was unable to comply; it
does not appear plaintiffs requested a waiver of the requirement, they only challenged the
requirement’s validity.
6
Plaintiffs’ reliance on N. M. Stat. Ann. § 3-20-7E for a due process entitlement to
plat approval would be trumped by Village ordinance § 8-2-9(E). That ordinance, like the
registration ordinance, is not set out in full in the record. But defendants’ answer,
unrebutted by plaintiffs, states that the applicable Village ordinance provides “[t]he
Planning and Zoning Commission shall approve or disapprove Final Plat within 35 days
of the day that the provisions hereof have been complied with by the developer.” Village
of Corrales Ord. § 8-2-9(E), Appellants’ App. 84 (emphasis added). Thus, the Village
ordinance does not automatically confer an entitlement to plat approval if not acted upon
within thirty-five days; it requires more than mere submission of the final plat. Plaintiffs’
complaint indicates that some delays were caused when the Village imposed road
requirements that apparently were in the ordinance. See id. at 66, 99. Because plaintiffs
did not establish their entitlement to plat approval, their due process claims were properly
dismissed on the pleadings.
III
Even if we assume the Village ordinances discussed above were invalid for failure
to comply with state law publication requirements, we still must affirm the district court’s
dismissal of the due process claims.
Plaintiffs do not complain about the registration ordinance because of its effect on
Richard Norton’s ability to offer his services to others, but because they argue defendants
used it as an excuse to delay the approval of plaintiffs’ subdivision applications. From
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plaintiffs’ complaint it is clear they had numerous opportunities to appear before the
Village planning commission and council to present their arguments. They base their due
process claims primarily on the statutory provision that if the planning authority of a
municipality does not act to “approve or disapprove” a plat within thirty-five days of its
submission it “is deemed to be approved and upon demand the planning authority shall
issue a certificate approving the plat.” N.M. Stat. Ann. § 3-20-7E. Defendants allege that
this state statute, in the absence of a valid Village ordinance altering the requirement,
gives rise to a property interest to which substantive due process rights attached. See
Jacobs, Visconsi & Jacobs, Co. v. City of Lawrence, 927 F.2d 1111, 1119 (10th Cir.
1991) (some authority in this circuit holds that “in order to present a claim of denial of
substantive due process, a plaintiff must allege a liberty or property interest to which due
process guarantees can attach”).
There is some confusion in the law as to when a person has a property right in a
context like that before us. See Pearson v. City of Grand Blanc, 961 F.2d 1211 (6th Cir.
1992) (surveying the circuit decisions). We have said in a city zoning case “[a]uthority in
this circuit is unclear on what interest is required to trigger substantive due process
guarantees.” Jacobs, Visconsi & Jacobs, Co., 927 F.2d at 1119. In the entitlement
analysis nearly all courts focus on whether there is discretion in the defendants to deny a
zoning or other application filed by the plaintiffs. “Since the entitlement analysis focuses
on the degree of official discretion and not on the probability of its favorable exercise, the
8
question of whether an applicant has a property interest will normally be a matter of law
for the court.” RRI Realty Corp. v. Incorporated Village of Southhampton, 870 F.2d 911,
918 (2d Cir.), cert. denied, 493 U.S. 893 (1989).
We have found no case law directly addressing whether under current New
Mexico law the zoning authority had discretion to deny a subdivision application that met
regulations. Cf. El Dorado at Santa Fe, Inc. v. Board of County Commissioners of Santa
Fe County, 551 P.2d 1360 (N.M. 1976) (granting mandamus to a subdivider seeking to
force approval of a subdivision map). Nevertheless, the New Mexico statute on which
plaintiffs rely contemplates that the planning commission has authority to deny approval
of a plat. N.M. Stat. Ann. § 3-20-7E (planning authority “shall approve or disapprove a
plat”). Plaintiffs themselves say “it should be remembered that Plaintiffs are not claiming
that Defendants must approve Plaintiffs’ subdivision (except as may be required under the
‘35 day’ rule)”. Appellants’ Reply Brief at 13.
If defendants had the discretion to deny plaintiffs’ subdivision applications during
the thirty-five-day period, plaintiffs’ position is not enhanced by defendants’ failure to act
within that time. Considering a nearly identical situation the Second Circuit stated the
following:
RRI’s argument that the ARB forfeited its discretion by not acting on
the application within the statutory thirty-day period, and thus was required
to approve the permit, is also unavailing. It may be that on the thirty-first
day, RRI was entitled to the permit, as a matter of state law, as the state
court held. But RRI’s claim to the permit, as a matter of constitutional law,
cannot be fragmented into two claims, one subject to the ARB’s discretion
9
within thirty days and one subject to a mandatory duty to issue after thirty
days. For purposes of a property interest under the Due Process Clause, the
claim to the permit is indivisible. The ARB’s discretion to deny the permit
during the thirty-day interval deprived RRI of a property interest in the
permit, regardless of how unlawful under state law the ultimate denial may
have been.
RRI Realty Corp., 870 F.2d at 919; see also Carr v. Town of Bridgewater, 616 A.2d 257,
262 (Conn. 1992) (“zoning authority’s discretion must be measured at the time the
application is filed”).
Even if we concede a property interest, “[a]bsent invidious discrimination, the
presence of a suspect class, or infringement of a fundamental interest, courts have limited
their review of quasi-legislative or quasi-judicial zoning decisions in the face of a
substantive due process challenge to determining whether the decision was arbitrary and
capricious,” Jacobs, Visconsi & Jacobs, Co., 927 F.2d at 1119 (quotations omitted). We
believe that “arbitrary and capricious” in this context does not mean simply erroneous.
“Actions that violate state law are properly challenged in state courts. . . . [t]he legality of
a zoning decision under applicable state law is not determinative of whether the decision
violated federal substantive law.” Sylvia Development Corp. v. Calvert County, 48 F.3d
810, 829 (4th Cir. 1995).
In more recent decisions, the Supreme Court has narrowed the scope of
substantive due process protection in the zoning context so that such a claim
can survive only if the alleged purpose behind the state action has no
conceivable rational relationship to the exercise of the state’s traditional
police power through zoning. In short, the doctrine of substantive due
process is a constitutionally imposed limitation, which is intended only to
10
prevent government from abusing [its] power, or employing it as an instru-
ment of oppression.
Id. at 827-28 (citations and quotations omitted); see also Corn v. City of Lauderdale
Lakes, 997 F.2d 1369, 1374 (11th Cir. 1993) (“First, it must be determined whether there
has been a deprivation of a federal constitutionally protected interest, and secondly,
whether the deprivation, if any, is the result of an abuse of governmental power sufficient
to raise an ordinary tort to the stature of a constitutional violation.”), cert. denied, 114
S. Ct. 1400 (1994).
Applying these criteria we hold that plaintiffs have not stated a claim for violation
of substantive due process rights. Defendants in the instant case alleged that they had a
reasonable basis for delaying further subdivision applications and approval of pending
plats based on plaintiffs’ failure to procure a business registration and on the fact that
plaintiff corporation Norco was not in “good standing” with the State Corporation
Commission. Appellants’ App. 88-89. These articulated reasons for not accepting some
of plaintiffs’ plats and plat applications had a rational relationship to a legitimate state
interest. Complying with the business registration ordinance would ensure that plaintiff
Richard Norton had an in-state address at which he could be served with process. The
Village also has an interest in ensuring that corporate developers are in good standing so
that title transfers will be properly made. The fact the registration ordinance may have
been invalid for failure to comply with a state law publication requirement does not make
these reasons less rational.
11
Plaintiffs assert bias and animosity toward Richard Norton as the real basis for the
denial, but defendants’ stated reasons for denying the registration and subdivision
applications, supported by the uncontested fact that the Zoning Commission allowed
another individual--as a proxy for plaintiffs--to complete the plat approval process on
several subdivisions, are sufficient to support dismissal of the due process claims.
Federal courts should be reluctant to interfere in zoning disputes which are local con-
cerns. See, e.g., Gunkel v. City of Emporia, 835 F.2d 1302, 1304 (10th Cir. 1987)
(federal courts do not sit as [a] “zoning board[] of appeals” to resolve municipal zoning
disputes). When, as here, defendants articulated a rational reason for their decision which
is related to a legitimate government interest, we will not look beyond it for evidence that
the reason was a pretext.
IV
Plaintiffs argue that defendants’ true motivation for rejecting Richard Norton’s
business registration application and refusing to accept subdivision applications or
approve final plats was that certain defendants “did not like” Richard Norton, Appellants’
App. 68, and wanted to put him “out of business” in the Village, id. at 46. We read this
assertion of bias and right to an impartial tribunal as an equal protection claim. Under the
Equal Protection Clause a state may not deny “any person within its jurisdiction the equal
protection of the laws,” U.S. Constitutional Amendment 14; thus it prohibits that the
government from treating similarly situated persons differently. Buckley Constr., Inc. v.
12
Shawnee Civic & Cultural Develop. Auth., 933 F.2d 853, 859 (10th Cir. 1991). Plaintiffs
did not explicitly allege they were treated differently from similarly situated persons or
corporations. In any event, it is clear that they are not claiming unequal treatment on the
basis of race, sex or other classifications which require heightened scrutiny. The question
then becomes whether the Equal Protection Clause protects not only against discrimina-
tion where victims are within an identifiable group, but also where the plaintiff alleges he
is an individual victim of purposeful discrimination.
The individual defendants asserted the defense of qualified immunity; however,
the district court did not recognize an equal protection claim and thus did not address
qualified immunity in this context. “Once a defendant asserts qualified immunity, the
plaintiff bears the burden of proving that the defendants violated a law that was clearly
established.” Lenz v. Dewey, 64 F.3d 547, 550 (10th Cir. 1995). “The plaintiff must
make a particularized showing, demonstrating that the contours of the violated right were
so established that ‘a reasonable official would understand that what he [wa]s doing
violate[d] that right,’” id. (quoting Anderson v. Creighton, 483 U.S. 635, 640 (1987)), “or
that the official did not act in good faith.” Id. (citing Harlow v. Fitzgerald, 457 U.S. 800,
815 (1982)).
In their responsive pleadings plaintiffs did not point to any case law establishing
that defendants’ asserted actions in denying approval of their plats and city registration
violated plaintiffs’ equal protection rights. Rather, plaintiffs cited state cases regarding
13
rights under state law, and asserted the Village ordinances on business regulations and
zoning were not properly published under state law. We have found no authoritative
opinion in this circuit on this issue, although there is one case in another circuit holding
that a plaintiff’s claim that a public official violated the Equal Protection Clause by
refusing to renew a liquor license because of vindictiveness withstood a Rule 12(b)(6)
motion. See Esmail v. Macrane, 53 F.3d 176, 178-80 (7th Cir. 1995). But see Sylvia
Development Corp., 48 F.3d at 819. Under the circumstances we hold that any such
equal protection right is not well enough established to hold the individual defendants to
knowledge of it. Thus the individual defendants enjoy qualified immunity on this claim.
Municipal liability can be based only on policy or custom of the municipality and
not on respondeat superior. Plaintiffs’ complaint failed to sufficiently allege facts that
would support a finding of a Village policy or custom violative of plaintiffs’ due process
or equal protection rights. We therefore affirm dismissal of the Village.
AFFIRMED.
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