Executive 100, Inc. v. Martin County

JOHNSON, Circuit Judge:

This case arises on appeal from the district court’s order of May 23, 1988 dismissing the plaintiffs’ complaint as premature.

I. FACTS

A. Background

The plaintiffs, Executive 100, Inc. (“Executive”) and Kings Ridge 239, Inc. (“Kings Ridge”) (referred to together as the “plaintiffs”), purchased parcels of land in Martin County Florida. Executive’s parcel is bordered on the south by County Road 714, and on the east by a new segment of Interstate 95 completed in 1987. Kings Ridge’s parcel is between the Florida Turnpike and the new segment of Interstate 95.

The completion of Interstate 95 has added significantly to the development value of both parcels. In order to capitalize on this new value, both plaintiffs filed applications for amendments to the Martin County Comprehensive Land Use Plan to change the zoning of their parcels from agricultural/rural ranchette¹ to industrial. The County Local Planning Agency reviewed the applications and passed them on to the Board of County Commissioners of Martin County (the “Board”), which denied the zoning changes.

The Board, however, did grant an amendment to the Martin County Comprehensive Land Use Plan to change the zoning of two parcels along Interstate 95, owned by interests other than the plaintiffs, to industrial. One parcel was located at the interchange of Interstate 95 and County Road 76, and the other parcel was located at Interstate 95 and County Road 708.

B. Proceedings in the District Court

The plaintiffs filed this suit under 42 U.S.C.A. § 1983, alleging ten counts: five on behalf of Executive, and an identical five on behalf of Kings Ridge.² Counts one and six alleged that the Board, by denying the rezoning requests, deprived the plaintiffs of property without due process of law. Counts two and seven alleged that the Board’s actions violated plaintiffs’ equal protection rights. Counts three and eight alleged that the agricultural/rural ranchette zoning regulation is unreasonable, arbitrary and capricious. Counts four and nine alleged that the prohibition of industrial use was so unrelated to the public welfare that it was a confiscation of property. Counts five and ten alleged that the Board wrongfully interfered with plaintiffs’ prospective economic advantage.

The Board moved to dismiss the complaint on the grounds of legislative immunity and on the grounds that the plaintiffs’ complaint was unripe. The district court found that the complaint failed to allege specific facts sufficient to preclude the application of legislative immunity and dismissed all of the claims against the defendants in their individual capacities. The court also found that the plaintiffs had failed to exhaust state inverse condemnation proceedings that were available under First English Evangelical Lutheran Church v. Los Angeles, 482 U.S. 304, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987), and Joint Ventures, Inc. v. Dept. of Transp., 563 So.2d 622, 628 (Fla.1990).³ The court, therefore, dismissed all of the counts as unripe.⁴ In this appeal, we first consider whether the district court erred in holding that the individual defendants were entitled to legislative immunity with respect to all claims in the complaint. We then consider whether the district court erred in finding that the plaintiffs’ complaint was premature.

II. STANDARD OF REVIEW

This Court must review de novo the district court’s order dismissing the complaint. See Luckey v. Harris, 860 F.2d 1012, 1016-17 (11th Cir.1988); Jackam v. Hospital Corp. of Am. Mideast, Ltd., 800 F.2d 1577, 1579 (11th Cir.1986). Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a complaint on the basis of a dis-positive issue of law. Neitzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827, 1832, 104 L.Ed.2d 338 (1989). The motion to dismiss should be denied, however, unless it appears beyond all doubt that the plaintiffs can prove no set of facts that would entitle them to relief. Luckey, 860 F.2d at 1016. The allegations in the plaintiffs’ complaint must be taken as true for purposes of the motion to dismiss. See id.

III. ANALYSIS

A. Legislative Immunity

The plaintiffs argue that the district court erred in dismissing their claims against the Board members in their individual capacities because the plaintiffs claimed prospective injunctive relief as well as monetary damages.⁵ The Board argues that the complaint did not seek injunctive relief against the Board members in their individual capacities. The Board also argues that claims for injunctive relief may be brought against government officials only in their official capacities, and not in their individual capacities, where the relief sought is an order concerning the defendants’ official duties.

Local legislators are entitled to legislative immunity in this Circuit. DeSisto College v. Line, 888 F.2d 755, 764-65 (11th Cir.1989). A defendant who enjoys official immunity from suits for damages may, however, be subject to suits for prospective injunctive relief. Pulliam v. Allen, 466 U.S. 522, 541-42, 104 S.Ct. 1970, 1980-81, 80 L.Ed.2d 565 (1984). Nevertheless, in the present case, none of the plaintiffs’ counts ask for an injunction against an individual Board member.⁶ Accordingly, the plaintiffs do not ask for injunctive relief against the Board members in their individual capacities. The plaintiffs’ argument, therefore, is baseless.⁷

B. Ripeness of Complaint

A plaintiff seeking to challenge a local government’s refusal to rezone his property may bring four different causes of action. Eide v. Sarasota County, 908 F.2d 716, at 719-23 (11th Cir.1990). First, a plaintiff may claim that the zoning applied to his land constitutes a taking of his property without just compensation in contravention of the Fifth Amendment. Id. at 721 (labeling this claim a “just compensation claim”).⁸ Second, a plaintiff may claim that the zoning applied to his property goes too far and destroys the value of his property to such an extent that it amounts to a taking by eminent domain without due process of law. Id. at 721 (labeling this claim a “due process takings claim”). Third, a plaintiff may argue that the regulation, either on its face or as applied, is arbitrary and capricious, does not bear a substantial relation to the public health, safety, morals, or general welfare, and therefore is an invalid exercise of the police power. Id. at 721-22 (labeling this claim as an “arbitrary and capricious due process claim”).⁹ Finally, a plaintiff may claim that the zoning denies him equal protection of the laws, either because it treats a suspect class differently from others, because it affects a fundamental right, or because it treats a non-suspect class differently and is not rationally related to a legitimate government purpose. Id. at 722 (labeling this an “equal protection” claim).¹⁰

1. Counts One and Six of Complaint

The Board asserts that the plaintiffs’ claims are not ripe because the plaintiffs have not proposed alternative zoning so as to reach a final determination of the nature and extent of development that the Board will permit on the plaintiffs’ land. In MacDonald, Sommer & Frates v. County of Yolo, 477 U.S. 340, 106 S.Ct. 2561, 91 L.Ed.2d 285 (1986), the Supreme Court stated that “[o]ur cases uniformly reflect an insistence on knowing the nature and extent of permitted development before adjudicating the constitutionality of the regulations that purport to limit it.” Id. at 349, 106 S.Ct. at 2567. In MacDonald, the Court refused to hear the plaintiff’s just compensation claim after its first development plan was rebuffed because the state courts had “le[ft] open the possibility that some development [would] be permitted, and ... le[ft] [the Court] in doubt regarding the antecedent question whether appellant’s property ha[d] been taken.” Id. at 352-53, 106 S.Ct. at 2567-68. Accordingly, the Court held that the plaintiff’s just compensation claim would not be ripe until the plaintiff reapplied for a permit to pursue a less ambitious development plan. Id. at 352-53 n. 9, 106 S.Ct. at 2568 n. 9.

Counts one and six of the plaintiffs’ complaint alleged that the Board deprived the plaintiffs of property without due process of law. These claims are due process takings claims.¹¹ In order for these claims to be ripe for adjudication, the plaintiffs must obtain a final decision regarding the application of the zoning ordinances to their property, including denial of variance applications.¹² Eide, at 721, 720; MacDonald, 477 U.S. at 352-53, 106 S.Ct. at 2567-68. In the present case, the plaintiffs do not allege that they have sought variances or pursued alternative, less ambitious development plans. Accordingly, the plaintiffs’ due process takings claims (counts one and six) are not ripe and should be dismissed.

2. Counts Two and Seven of Complaint

Counts two and seven of plaintiffs’ complaint allege that the Board’s actions violated plaintiffs’ equal protection rights. These claims, which are based on allegations that the Board’s action had no rational basis, are not barred by MacDonald’s reapplication requirement. See Eide, at 724 n. 12. In order to establish the ripeness of their equal protection claims, the plaintiffs must show only that the Board has made a final decision denying commercial zoning. Eide, at 724 n. 12, 725 n. 16.

In cases involving economic regulation, the courts apply the rational basis test to regulations challenged under the Equal Protection Clause. Williamson v. Lee Optical, 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955); Eide, at 722. Legislation is presumed to be valid and will be sustained if the classification drawn by the statute is rationally related to a legitimate state interest. Cleburne v. Cleburne Living Center, 473 U.S. 432, 440, 105 S.Ct. 3249, 3254, 87 L.Ed.2d 313 (1985). The plaintiffs allege that the defendants treated them differently from other similarly situated landowners along Interstate 95 without any reasonable basis. Accordingly, the plaintiffs state an as applied equal protection claim. These claims (counts two and seven) should continue.

3. Counts Three and Eight of Complaint

Counts three and eight of the plaintiffs’ complaint allege that the Board’s actions were arbitrary and capricious. This Court has stated that the reapplication requirement of MacDonald has no bearing on as applied arbitrary and capricious due process claims. Eide, at 725 n. 16. Accordingly, the plaintiffs’ as applied arbitrary and capricious due process claims (counts three and eight) are not barred by MacDonald.

The test in this Circuit as to whether there has been a violation of due process in the context of section 1983 has two prongs. First, the court must determine whether there has been a deprivation of a constitutionally protected interest. Second, the court must determine whether the deprivation was the result of an abuse of governmental power sufficient to raise an ordinary tort to the stature of a constitutional violation. Greenbriar Ltd. v. City of Alabaster, 881 F.2d 1570, 1577 (11th Cir.1989). A deprivation is of constitutional stature if it is undertaken for improper motive and by means that were pretextual, arbitrary and capricious, and without rational basis. Id. In the zoning context, the issue is whether the Board’s action bore any substantial relation to the public welfare. Id.

On the first prong, the plaintiffs allege that the value of their property has been diminished significantly by the Board’s actions in denying their requests for rezoning. They also allege harm “including the denial to the Plaintiff[s] of the opportunity otherwise available to [them] to sell [their] property for industrial use.” If the plaintiffs prove that this diminution was more than a simple fluctuation in value incident to governmental decisionmaking, which is a noncompensable hazard of ownership, see First Lutheran Church, 482 U.S. at 320, 107 S.Ct. at 2388; Williamson County Regional Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 198-99, 105 S.Ct. 3108, 3122-23, 87 L.Ed.2d 126 (1985) (citing Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414, 43 S.Ct. 158, 67 L.Ed. 322 (1922)), then they will have shown a deprivation of a property right. On the second prong, the plaintiffs allege that the Board’s actions were unrelated to the public welfare because their land is not suitable for its present zoning status. Accordingly, the plaintiffs’ complaint states as applied arbitrary and capricious due process claims. These counts (three and eight) should proceed.

4.Counts Four and Nine of Complaint

Counts four and nine of the plaintiffs’ complaint allege that the Board’s actions amounted to a confiscation of property. A claim that a government regulation effects a taking of property without just compensation is not ripe until the government entity charged with implementing the regulation has made a final decision regarding the application of the regulation to the property at issue. Williamson County, 473 U.S. at 186, 105 S.Ct. at 3116; Eide, at 720. Moreover, if the government has provided an adequate process for the property owner to obtain compensation, and if resort to that process yields just compensation, then the owner has no just compensation claim. Williamson County, 473 U.S. at 194-95, 105 S.Ct. at 3120-21. Reverse condemnation proceedings are one procedure for pursuing just compensation. Id. at 196-97, 105 S.Ct. at 3121-22.

In First Lutheran Church, the Supreme Court held that when a state regulation temporarily deprives a property owner of all use of his property, the state must provide compensation under the just compensation clause. First Lutheran Church, 482 U.S. at 315, 107 S.Ct. at 2386. The Florida courts have recognized that under First Lutheran Church property owners have the right to bring reverse condemnation proceedings seeking compensation for regulatory takings. Joint Ventures, at 622. Accordingly, under Williamson County the plaintiffs’ claims that the government has confiscated property without just compensation (counts four and nine) are not ripe for adjudication because the plaintiffs have not pursued compensation through a reverse condemnation proceeding. Williamson County, 473 U.S. at 195, 105 S.Ct. at 3121 (“a property owner has not suffered a violation of the just compensation clause until the owner has unsuccessfully attempted to obtain just compensation_”); see also Anthony v. Franklin County, 799 F.2d 681, 684 (11th Cir.1986).¹³

5. Counts Five and Ten of Complaint

Finally, counts five and ten of the plaintiffs’ complaint allege that the Board wrongfully interfered with their prospective economic advantage. Under Florida law, tortious interference with an advantageous relationship consists of the following elements: (1) the existence of an advantageous business relationship under which the plaintiff has legal rights, (2) an intentional and unjustified interference with that relationship by the defendant, and (3) damage to the plaintiff. Lake Gateway Motor Inns v Matt’s Sunshine Gift Shops, Inc., 361 So.2d 769, 771 (Fla.Dist.Ct.App.1978). Plaintiffs allege that they had “prospective advantageous business relationships with certain potential purchasers.... ” They also allege that the Board “told potential purchasers of the subject property that the subject property could be used, now and in the future only for [residential (Executive) or] agricultural [ (Kings Ridge) ] purposes.” Plaintiffs also allege damage. If the plaintiffs should prove that the Board intentionally and unjustifiably interfered with the plaintiffs’ prospective business relationship, causing the plaintiffs damage, they will prevail on these claims. Accordingly, these claims (counts five and ten) should continue.

IV. CONCLUSION

We AFFIRM the district court’s dismissal of the claims against the Board members in their individual capacities. We also AFFIRM the district court’s dismissal of the plaintiffs’ due process takings claims (counts one and six) and just compensation claims (counts four and nine). We REVERSE the district court’s dismissal of the plaintiffs’ as applied equal protection claims (counts two and seven), as applied arbitrary and capricious due process claims (counts three and eight), and tort claims (counts five and ten).

1 . Rural Ranchette allows development at one house per five acres.

2 . Plaintiffs sued the Board members, in their official and individual capacities, and Martin County. We refer to the defendants collectively as the "Board."

3 . The district court relied on the intermediate appellate court opinion in Joint Ventures. See Joint Ventures, Inc. v. Dept. of Transp., 519 So.2d 1069 (Fla.Dist.Ct.App.1988). The Florida Supreme Court’s opinion, cited above, quashed the intermediate court’s opinion. Joint Ventures, at 629. The Florida Supreme Court recognized, however, that a property owner has the right to bring an inverse condemnation proceeding in response to an alleged regulatory taking. Id., at 622.

4 . The court, in an alternative holding as to counts five and ten, found that if plaintiffs’ interference with prospective economic opportunity claim was based on state law, it failed to allege the necessary element of a contract or business relationship with prospective customers.

5 . The plaintiffs do not challenge the district court’s holding that the Board members are entitled to legislative immunity under Lake Country Estates v. Tahoe Planning Agency, 440 U.S. 391, 404, 99 S.Ct. 1171, 1178-79, 59 L.Ed.2d 401 (1979), and DeSisto College v. Line, 888 F.2d 755, 765 (11th Cir.1989).

6 . Each count asks for an order declaring that prohibiting the plaintiffs from using their land for industrial purposes violates plaintiffs' rights. Each count also asks for an injunction enjoining the "county” from enforcing the County Comprehensive Land Use Plan. Counts one and six ask for compensatory damages against the individual defendants, and counts one, two, five, six, seven, and ten ask for punitive damages against the individual board members.

7 . Accordingly, we do not reach the issue of whether suits against officials for prospective injunctive relief may be brought only against defendants in their official capacities.

8 . The Fifth Amendment provides in part: [PJrivate property [shall not] be taken for public use, without just compensation. U.S. Const.Amend. V.

9 . This Circuit further distinguishes between "facial" arbitrary and capricious due process challenges, see Eide, at 722, and "as applied” arbitrary and capricious due process challenges. Id.

10 . This Circuit distinguishes between equal protection challenges to a statute "on its face,” and challenges to a statute "as applied to the property involved.” Eide, at 722.

11 . Counts one and six appear to state due process takings claims. Counts three and eight allege that the present zoning of the plaintiffs’ parcels is unreasonable, which appear to be as applied arbitrary and capricious substantive due process claims. See Eide, at 721. We separately analyze these "due process” claims.

12 . This Circuit has not resolved the issue of whether a property owner also must pursue state procedures for obtaining just compensation before a due process takings claim is ripe for adjudication. See Eide, at 721.

13 . Plaintiffs claim that Williamson County should not apply to their just compensation claim because they do not have a “viable" inverse condemnation claim. This appears to be nothing more than a concession that their claim of a taking is meritless because the Board has not deprived the plaintiffs of all use of their property. Accordingly, this argument lacks merit.