Acierno v. New Castle Co.

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
11-10-1994
Acierno v. New Castle Co.
Precedential or Non-Precedential:
Docket 94-7134
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 94-7134
___________
FRANK E. ACIERNO,
Appellee
v.
NEW CASTLE COUNTY,
Appellant
___________
Appeal from the United States District Court
for the District of Delaware
(D.C. Civil Action No. 93-cv-00579)
___________
Argued: June 24, 1994
PRESENT: BECKER and HUTCHINSON, Circuit Judges,
and PADOVA, District Judge*
(Filed November 10, 1994)
____________
Collins J. Seitz, Jr., Esquire (Argued)
N. Richard Powers, Esquire
Connolly, Bove, Lodge & Hutz
1220 Market Building
P.O. Box 2207
Wilmington, DE 19899
Attorneys for Appellant
_______________
* Hon. John R. Padova, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.
Thomas S. Neuberger, Esquire (Argued)
Thomas S. Neuberger, P.A.
Suite 702
200 West Ninth Street
Ninth Street Plaza
Wilmington, DE 19801-1646
and
John J. Yannacone, Esquire (Argued)
Yannacone, Fay, Baldo & Daly
Suite 107
200 East State Street
Media, PA 19063
Attorneys for Appellee
____________
OPINION OF THE COURT
____________
HUTCHINSON, Circuit Judge.
This appeal presents yet another dispute between real
estate developer Frank Acierno ("Acierno") and New Castle County,
Delaware ("the County") over Acierno's commercial development
plans for land in the County. The underlying action is Acierno's
request for declaratory and injunctive relief and compensatory
and punitive damages for the County's alleged violations of the
Constitution and laws of the United States and 42 U.S.C.A. § 1983(West 1994).1 Presently before us is the County's appeal from an
1
. 42 U.S.C.A. § 1983 provides, in relevant part:
Every person who, under color of [law],
subjects, or causes to be subjected, any
. . . person . . . to the deprivation of any
rights, privileges, or immunities secured by
the Constitution and laws, shall be liable to
the party injured . . . .
order entered by the United States District Court for the
District of Delaware granting Acierno's motion for a mandatory
preliminary injunction directing the County to issue Acierno a
building permit for development of a shopping mall. The
preliminary injunction also enjoins and restrains the County from
interfering with Acierno's right to develop the parcel in
question as a shopping mall.
In issuing its preliminary injunction, the district
court held that Acierno established a substantial likelihood that
the County's actions interfered with Acierno's Fourteenth
Amendment property interests and his liberty interest to conduct
his business as a real estate developer. The district court also
concluded that Acierno would suffer irreparable harm unless the
County was compelled to issue the building permit and halt its
interference with Acierno's development. Finally, the court
concluded that neither potential hardship to the County nor the
public interest outweighed the benefits of issuing the
preliminary injunction.
On appeal, the County argues Acierno failed to show he
will be irreparably harmed unless a preliminary injunction issues
against the County. We agree. A primary purpose of a
preliminary injunction is maintenance of the status quo until a
decision on the merits of a case is rendered. A mandatory
preliminary injunction compelling issuance of a building permit
fundamentally alters the status quo. There is no evidence in
this record to show that a delay in issuance of the building
permit until this case can be decided on its merits would cause
irreparable harm to Acierno. We will therefore reverse the
district court's order entering this mandatory preliminary
injunction against the County.2
I. Factual & Procedural History
A. General Factual Background
In 1971 Acierno was a long term lessor of a large part
of some forty acres of land situated in New Castle County,
Delaware near the intersection of Interstate Highway 95 and State
Route 273. This forty acre parcel was zoned M-1, Manufacturing,
and the County's zoning ordinance then in effect permitted
commercial development in an M-1 manufacturing zone.3 Acierno
also owned an adjacent smaller parcel of land zoned C-2,
Commercial, a portion of which is directly adjacent to Route 273.
These two parcels comprise the property ("the Property").
In 1971, County planning law required developers to
file an "exploratory sketch plan" before the County would finally
approve a subdivision plan. On May 11, 1971, Acierno filed an
"exploratory sketch plan" with the County Department of Planning
2
. On appeal, the County also challenges the district court's
conclusions that Acierno demonstrated a likelihood of success on
his procedural and substantive due process claims. We do not
decide these issues because of our conclusion that Acierno failed
to show irreparable harm.
3
. Zoning theory once took a hierarchial view of use zones. In
the hierarchy, a manufacturing use usually ranked below a
commercial use. The theory thus resulted in mixed uses within a
single use zone. It has been generally displaced because such
mixed uses have come into disfavor among planners and many of the
communities they serve.
("the Planning Department") proposing development of an enclosed
shopping mall on the Property. On October 8, 1971, in accordance
with County regulations, Acierno submitted a more detailed
"preliminary-tentative building plan." It described the enclosed
mall as located entirely on the larger, forty acre portion of the
Property zoned M-1. On October 22, 1971, the Planning Department
disapproved Acierno's preliminary-tentative plan.4
On November 16, 1971, the New Castle County Council
("County Council") adopted an amendment to section 23-34 of the
County Zoning Code prohibiting the commercial uses previously
allowed in an M-1 Manufacturing zone. Before this amendment was
adopted, Acierno requested the County's Planning Board ("Planning
Board")5 to hold an expedited special meeting to reconsider
Acierno's preliminary-tentative plan. At this meeting on
November 8, 1971, the Planning Board reversed the Planning
Department and approved Acierno's preliminary-tentative plan.
On January 24, 1972, Acierno filed a final plan
("Plan") for his shopping center with the Planning Department
but, on February 24, 1972, the Planning Department voted to
4
. The Planning Department found that the proposed plan was
inconsistent with the County's comprehensive plan, would create
adverse traffic congestion and had an unsuitable internal design.
5
. Under Delaware law pertaining specifically to New Castle
County, the Planning Department initially reviews subdivision
proposals. Del. Code Ann. tit. 9, § 1345 (1989). A developer
has a right of appeal from an adverse decision of the Planning
Department to the Planning Board. New Castle County Subdivision
Regulations § 8.31; see Acierno v. Folsom, 337 A.2d 309, 311
(1975). The Planning Board consists of seven members appointed
by the County Executive with the advice and consent of the
County's attorney. Del. Code Ann. tit. 9, § 1342 (1989).
reject the final plan (1) because it conflicted with the general
comprehensive development plan adopted for the County, (2)
because the shape of the tract in issue made it unsuitable for
the construction of a shopping center and (3) because of the
impact of the increased traffic the proposed shopping center
would bring. Acierno appealed but this time, on April 26, 1972,
the Planning Board affirmed the Planning Department's rejection.
See Acierno v. Folsom, 313 A.2d 904, 905 (Del. Ch. 1973), aff'd
311 A.2d 512 (Del. 1973).
A series of administrative and judicial appeals
followed and, during a further hearing before the Planning Board,
Board members voted as follows:
(1) 6 to 0 in favor of Acierno on the
incompatibility of the Plan with the County's
comprehensive development plan;
(2) 4 to 2 in favor of Acierno on the issue
of unsuitable internal design of the project;
and
(3) 3 to 3 to sustain Planning's rejection of
Acierno's Plan because that the proposed
development would have an adverse effect on
vehicular traffic in the area.
Id. at 905-06. A member of the Planning Board who was absent
from this hearing later advised the Chairman of the Planning
Board that he would have voted to overrule the Planning
Department on all three resolutions if he had been present. See
id. at 906. County Council nevertheless affirmed the Planning
Board's decision on January 9, 1973. Id.On March 14, 1975, however, the Delaware Supreme Court
ordered County Council to approve and file Acierno's Plan. See
Acierno v. Folsom, 337 A.2d 309, 317 (Del. 1975) (reversing
unreported Delaware Court of Chancery order granting summary
judgment to County). The supreme court first held that "an
approval of the Planning Board was binding upon the Planning
Department . . . and that . . . the County Council was obliged,
as a ministerial function, to register its approval . . . ." Id.
at 313. It also concluded that the Chairman of the Planning
Board acted unlawfully in failing to recuse himself during the
vote because of his apparent bias and prejudice towards Acierno
and accordingly refused to count the Chairman's vote. Id. at
316. This changed the vote on the effect of increased traffic,
the only issue which had gone against Acierno, to 3-2 in his
favor. Id. at 317. The state's highest court therefore held
that a majority of the Planning Board members properly voting had
approved Acierno's proposed development and County Council was
bound by this decision. Id. In compliance, County Council
approved Acierno's Plan on October 28, 1975.
Almost twelve years later, in September of 1987,
Acierno submitted a revised subdivision plan ("Revised Plan") to
the Planning Department.6 In it he proposed to: (1) subdivide
the Property into three parcels; (2) change building locations
and sizes to accommodate the present market; and (3) correct
drafting errors along some boundary courses.
6
. In the early 1980's, Acierno purchased the forty acre parcel,
which he had previously leased.
In a memorandum dated January 26, 1988, Charles D.
McCombs II of the Planning Department directed Acierno's
engineers to "[p]rovide a note referencing previous court action
that permitted commercial development in the M-1 zoning
district[]" on the Revised Plan. Appendix ("App.") at 335. They
did so and on February 25, 1988, County Planning Director Wayne
Grafton ("Grafton") approved the Revised Plan for recording
purposes. On May 15, 1988, Grafton approved development of a
"Hampton Inn" on the portion of the Property zoned M-1.
In November of 1988, Acierno submitted a revised
subdivision plan amending the Revised Plan ("Revised Plan II").
Revised Plan II stated its purpose was to "'revise buildings &
parking for buildings 1, 2 & 3' and to 'correct drafting errors
along some boundary courses.'" App. at 336. Otherwise, it was
consistent with Revised Plan I. On March 7, 1989, Grafton
approved Revised Plan II.7
7
. On April 4, 1989, following Grafton's approval of Revised
Plan II, the Department of Public Works notified Acierno's
engineers that it had approved facility support plans for a
McDonald's which Acierno planned to locate on the part of the
Property zoned for commercial use. On April 20, 1989, the
Delaware Department of Transportation ("DELDOT") approved a
permit for a commercial entrance to the Property at Route 273
presumably in connection with the plans for the McDonald's.
B. The County's Conduct Leading to the Present Action
On April 18, 1991, County Attorney Michael Mitchell
("Mitchell") sent a memorandum to David J. Biloon ("Biloon"),
Chief, Development and Licensing Division, Department of Public
Works, New Castle County. Mitchell's memorandum stated that he
had reviewed the Delaware Chancery and Supreme Court opinions in
the initial litigation in the mid-1970's over development of the
Property, as well as a copy of the original Plan, the Revised
Plan, and Revised Plan II. Attorney Mitchell's memorandum
concluded that most of the Property was not zoned for retail use,
stating:
"[N]o building permit should be issued for
any construction on this site until extensive
review and consultation between the Division
of Development and Licensing, Department of
Planning and Department of Law is initiated
and concluded concerning any proposed use.
Given the types of tenants that he has
approached; i.e., the movie theater chain, it
is clear that Mr. Acierno intends to initiate
a use of the property that is not in
conformity with the New Castle Zoning Code.
In order to implement this directive, a
general hold should be placed on any building
permits that could be issued for this site.
If that cannot be accomplished, all plan
examiners and other officials involved in the
building permit process should be advised of
this situation and ordered to report any
application for a building permit directly to
you. If Mr. Acierno applies for a Building
Permit for the 273 Mall, please contact this
Department so that the review discussed above
may be initiated."
Acierno v. New Castle County, No. 93-579-SLR, 1994 U.S. Dist.
LEXIS 1683, at *34-35 (D. Del. Feb. 11, 1994) (emphasis added and
emphasis in original deleted).
On May 3, 1991, Biloon circulated a memo within the
County's Division of Development & Licensing which stated:
"Please inform your respective staffs to keep
an eye out for any activity, i.e., building
permit applications, for . . . the 273 Mall
. . . .
We have been advised by the Law Department
that there is a zoning problem at the 273
Mall site. Basically, the site is zoned M-1
which will not support retail shopping uses.
At this point in time, I will not try to
explain the legal reasons as to why there is
a valid Record Plan or why the Record Plan
cannot be rescinded by the County; but, never
the less [sic], we have been instructed by
the Law Department to withhold building
permits for any activity. . . ."
Id. at *35-36 (emphasis deleted).
On July 9, 1991, Mitchell sent a memorandum to Bryan C.
Shuler, Director of Planning. In it, Mitchell recounted the
history of the legal dispute over development of the Property and
stated that Acierno's record plans should not be accorded "'any
effect inasmuch as they purport to permit that which is not
permitted by the Zoning Code.'" Id. at *45. Mitchell's
conclusion that Acierno's recorded plans had no effect was based
on his reading of section 23-6(a) of the New Castle County Code.8
8
. Section 23-6(a) and (c) provides:
(a) No proposed ordinance to amend the
zoning map shall be acted upon by county
Applying section 23-6(a) and (c) to Acierno's case, Mitchell's
memorandum went on to state:
"Since this property would have been accorded
the three-year stability protection regarding
a proposed rezoning for the site, it also
received the protection accorded by Section
23-6(c) of the Code . . . .
The purpose of the three-year 'moratorium'
provision is to provide stability to the
process. In this case, Section 23-6(c)
permits a lot owner three (3) years to
establish a use that but for a recent Zoning
amendment would have been permitted in that
district if the particular parcel was
(..continued)
council within three (3) years after the
latest of any of the following actions:
* * *
(3) Prior approval under the
subdivision regulations of a preliminary
plan involving any parcel of land, or
portion thereof, whose zoning
classification would be changed by the
proposed amendment; provided, that the
applicant and owner of such parcel may
withdraw such plan and the provisions of
this paragraph shall then cease to be
applicable to such parcel or parcels.
In no event shall the period permitted
under this paragraph exceed three (3)
years from the earlier approval under
the subdivision regulations of a
preliminary plan involving such parcel,
or portion thereof.
(c) No amendment to the zoning code
regulations shall be applicable to any parcel
or parcels of land protected by subparagraphs
. . . (3) . . . of subsection (a) of this
section during the period of such protection
. . . .
New Castle County, Del., Code § 23-6(a),(c) (1992); see Acierno,
1994 U.S. Dist. LEXIS 1683, at *46.
protected by Paragraph (1), (3) or (4) of
Section 23-6(a). The protection is afforded
only for the three-year period and the
property owner must establish the non-
conforming use during that time. If the use
is not established, the Code affords no
further protection to that particular parcel.
Thereafter, the property owner must comply
with the revised provisions of the Zoning
Code.
Nor does the recordation of a plan create any
rights, vested or otherwise. It is the use
that is conferred non-conforming status, not
a plan or a permit of any kind. Therefore,
since Mr. Acierno did not establish a non-
conforming commercial use within the three-
year period provided for in Section 23-6(c),
he is no longer entitled to establish any
commercial use except those very limited
instances where such commercial uses are now
presently permitted in a M-1 district
accessory to the permitted
manufacturing/industrial use."
Id. at *46-48.
Mitchell forwarded a copy of his July 9, 1991
memorandum to Robert O'Brien, Director, Department of Public
Works, so that O'Brien could "'take appropriate action to ensure
that no building permit is issued for any principal commercial
use [on the 273 Property] . . . .'" Id. at *48. Mitchell then
asked O'Brien, "[a]ccordingly, would you please take any steps
necessary to ensure that no permits are issued for this site
until complete review and consultation is accomplished with this
Department and the Department of Planning.'" Id.While Mitchell was writing these memos, Acierno was
negotiating with prospective commercial tenants for space within
his proposed development. Caldor, Inc. ("Caldor") was an
important prospect. In late 1991 Acierno applied for a permit to
build a Caldor store. Biloon, by letter dated December 18, 1991,
told him:
"Please be advised that New Castle County
cannot accept your building permit
application for the proposed Caldor
Department Store at this site. Commercial
ventures of this nature cannot be situated on
lands which contain a manufacturing zoning
classification. Additionally, the existing
Record Plan . . . allows for a 70,000 square
foot building denoted as Building #4. The
proposed structure is 112,000 square feet.
This is also a discrepancy which must be
rectified prior to the issuance of any
permits."
Id. at *48-49.
In February, 1992, the Delaware Department of Natural
Resources and Environmental Control approved Acierno's temporary
erosion and sediment control plan. In May, 1992, Acierno
resubmitted his application for a building permit in connection
with the Property. The accompanying plan provided for a 70,000
square foot building drawn in accord with County standards. On
May 27, 1992, Biloon contacted Mitchell and informed him of
Acierno's latest application: "'We have another application for
the dept. store. This time the building plans agree with the
record plan. What is out next move?'" Id. at *52. Mitchell
responded: "'It is not zoned for a retail department store. He
does not get a permit.'" Id. Biloon subsequently assigned and
then voided a building permit number for the proposed development
project on the Property. By letter dated June 4, 1992, Biloon
advised Acierno: "New Castle County still cannot accept your
building permit application for the proposed 70,000 square foot
Caldor Department Store at [the 273 Property]." Id. at *54-55.
C. Procedural History
On July 1, 1992, Acierno filed a complaint under 42
U.S.C.A. § 1983 against the County and others in the district
court. He alleged the County's decision to deny him a building
permit violated his constitutional rights to due process (both
substantive and procedural) and equal protection.
On December 30, 1992, the district court granted
Acierno's motion for a mandatory preliminary injunction directing
the County to issue him a building permit. See Acierno v.
Mitchell, No. 92-384-SLR, 1992 U.S. Dist. LEXIS 20381, at *52
(D. Del. Dec. 30, 1992) (order granting preliminary injunction).
The County then filed an interlocutory appeal. On October 4,
1993, this Court vacated the district court's opinion and order,
held the case was not ripe and remanded with instructions to
dismiss Acierno's section 1983 action without prejudice because
Acierno had failed to appeal the County's refusal to issue the
building permit to the New Castle Board of Adjustment (the
"Board"). Acierno v. Mitchell, 6 F.3d 970, 977-78 (3d Cir.
1993).
Acierno then appealed to the Board, which held an
evidentiary hearing on December 2, 1993 and on December 16, 1993
voted to deny Acierno a building permit. The next day,
December 17, 1993, Acierno filed the present suit in district
court, repeating the allegations he made in his prior section
1983 complaint. On the same day, the County filed a state court
action seeking a declaratory judgment that Acierno had no right
to develop the Property for commercial purposes. New Castle
County v. Acierno, No. 13302 (Del. Ch. filed Dec. 17, 1993). The
state action remains pending.
On January 4, 1994, the district court held an
evidentiary hearing on Acierno's motion for a preliminary
injunction and, on February 11, 1994, issued its opinion in
support of the mandatory injunction Acierno requested. On
February 16, 1994, the order granting Acierno's motion for a
mandatory preliminary injunction requiring the County to issue a
building permit and accord Acierno favorable treatment during
inspections of the building process was entered. See Acierno v.
New Castle County, No. 93-579-SLR (D. Del. Feb. 16, 1994) (order
granting preliminary injunction).
On February 17, 1994, the County filed its timely
notice of appeal. It also filed a motion for stay of the
injunction pending the appeal. On March 18, 1994, the district
court denied the motion for a stay. On April 6, 1994, this Court
denied the County's March 23, 1994 motion for a stay pending
appeal.
D. Acierno's Damages
During the Board of Adjustment hearing convened to
determine whether Biloon had correctly denied Acierno a building
permit, a board member asked for specific information about
Acierno's expenses in the planning and development stages of the
subdivision and resubdivision process. Acierno's attorney
refused to permit Acierno to respond, stating that he would
"absolutely not" provide such information and that evidence of
Acierno's expenditures could be found at "page 8, paragraph 19 of
[the district court's December 30, 1992] Opinion."9 App. at 332.
The Board of Adjustment found:
Acierno refused to testify concerning costs,
and the documentary evidence does not prove
that expensive and permanent improvements
were constructed in reliance upon M-1
sections of the subdivision and re-
subdivision plans. No credible evidence was
presented to the Board which proved that
Acierno made a substantial change in position
or incurred substantial obligations in
reliance on the M-1 sections of the
subdivision or re-subdivision approvals. Any
expenses, plans or obligations undertaken by
Acierno were related to the commercially
zoned portion of the plan.
9
. This Paragraph states:
In connection with these Record Plans,
plaintiff submitted surveys, drainage area
plans, site plans, grading and utility plans,
sanitary sewer plans, lines and grades plans,
entrance details, and road plans. All of
these plans were accepted by the various
County and State agencies. Plaintiff
expended thousands of dollars in connection
with this work.
Acierno, 1992 U.S. Dist. LEXIS 20381, at *10-11 (emphasis added).
Id. at 344. The Board also found that "any pre-construction
expenses were attributable to the commercial portion of the site
(for a McDonalds location) which was not the subject of the
building permit, submitted by Acierno." Id. at 17.10
On the issue of Acierno's damages and irreparable harm
stemming from them, the district court made these additional
findings of fact:
* Acierno has permanently lost the
opportunity to lease space to Caldor;
* If Acierno, who is presently negotiating
to lease space on the Property to other
tenants, is unable to obtain building
permits, those prospective tenants with
whom he is negotiating will lease at
other sites; and
* The continued denial of the building
permit will diminish Acierno's ability
to develop the property because of
competitive market demands and land use
limitations.
See Acierno, 1994 U.S. Dist. LEXIS 1683, at *61-62.
10
. The district court did not explain why it refused to defer
to this finding or failed to conclude it was not supported by the
evidence before adopting contrary findings. On appeal, the
County challenges the district court's failure to give preclusive
effect to the factual findings of the Board. The district court
acknowledged that University of Tennessee v. Elliott, 478 U.S.
788, 797-99 (1986), required it to give preclusive effect to the
Board's factual findings but seems to have concluded the quoted
finding left the question of harm open. See Acierno, 1994 U.S.
Dist. LEXIS 1683, at *9. Its reasons for rejecting the second
finding allocating pre-construction expenses to the McDonalds are
not clear. Under Kollock v. Sussex Count Bd. of Adjustment, 526
A.2d 569 (Del. Super. 1987), a court reviewing the factual
findings of the Board may only ignore such findings upon a
determination that they are not supported by substantial evidence
in the record. Id. at 571.
II. Jurisdiction & Standard of Review
The district court had subject matter jurisdiction over
Acierno's section 1983 claim under 28 U.S.C.A. §§ 1331, 1343(3)
(West 1993). We have appellate jurisdiction over a district
court's interlocutory order granting a preliminary injunction
under 28 U.S.C.A. § 1292(a)(1) (West 1993) providing for appeals
from "[i]nterlocutory orders of the district courts . . .
granting, continuing, modifying, refusing or dissolving
injunctions . . . ." Id.; see also Cohen v. Board of Trustees of
Univ. of Medicine and Dentistry of New Jersey, 867 F.2d 1455,
1464 (3d Cir. 1989) (in banc) (injunctive order immediately
appealable).
We review an order granting a preliminary injunction
for abuse of discretion, see Merchant & Evans, Inc. v. Roosevelt
Bldg. Prods. Co., 963 F.2d 628, 633 (3d Cir. 1992), but we review
the district court's underlying factual determinations under a
clearly erroneous standard and consider the court's
determinations on questions of law de novo. See In re Assets of
Myles Martin, 1 F.3d 1351, 1357 (3d Cir. 1993); John F. Harkins
Co. v. Waldinger Corp., 796 F.2d 657, 658-59 (3d Cir. 1986),
cert. denied, 479 U.S. 1059 (1987).
III. Analysis
On appeal, the County challenges the district court's
conclusion that Acierno demonstrated the threat of immediate
irreparable injury necessary to justify the mandatory preliminary
injunctive relief granted here and also argues that the district
court abused its discretion in crafting the terms of the
injunction and in providing overly broad relief to Acierno.
In order to obtain a preliminary injunction, "'the
moving party must generally show: (1) a reasonable probability
of eventual success in the litigation, and (2) that it will be
irreparably injured pendente lite if relief is not granted to
prevent a change in the status quo.'" Delaware River Port Auth.
v. Transamerican Trailer Transp., Inc., 501 F.2d 917, 919-20 (3d
Cir. 1974) (quoting A.L.K. Corp. v. Columbia Pictures Indus.,
Inc., 440 F.2d 761, 763 (3d Cir. 1971)). Moreover, while the
burden rests upon the moving party to make these two requisite
showings, the district court "should take into account, when they
are relevant, (3) the possibility of harm to other interested
persons from the grant or denial of the injunction, and (4) the
public interest." Id. at 920 (footnote omitted).
In general, to show irreparable harm a plaintiff must
"demonstrate potential harm which cannot be redressed by a legal
or an equitable remedy following a trial." Instant Air Freight
Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 801 (3d Cir. 1989).
Economic loss does not constitute irreparable harm:
[I]t seems clear that the temporary loss of
income, ultimately to be recovered, does not
usually constitute irreparable injury:
"The key word in this consideration
is irreparable. Mere injuries,
however substantial, in terms of
money, time and energy necessarily
expended in the absence of a stay,
are not enough. The possibility
that adequate compensatory or other
corrective relief will be available
at a later date, in the ordinary
course of litigation, weighs
heavily against a claim of
irreparable harm."
Sampson v. Murray, 415 U.S. 61, 90 (1974) (footnotes omitted)
(quoting Virginia Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921,
925 (D.C. Cir. 1958)). Thus, in order to warrant a preliminary
injunction, the injury created by a failure to issue the
requested injunction must "'be of a peculiar nature, so that
compensation in money cannot atone for it . . . .'" A. O. Smith
Corp. v. F.T.C., 530 F.2d 515, 525 (3d Cir. 1976) (quoting Gause
v. Perkins, 3 Jones Eq. 177, 69 Am. Dec. 728 (1857)). The word
irreparable connotes "'that which cannot be repaired, retrieved,
put down again, atoned for. . . .'" Id. (quoting Gause, 3 Jones
Eq. 177, 69 Am. Dec. 728). A party seeking a mandatory
preliminary injunction that will alter the status quo bears a
particularly heavy burden in demonstrating its necessity.
Punnett v. Carter, 621 F.2d 578, 582 (3d Cir. 1980).
In concluding that Acierno demonstrated irreparable
harm, the district court stated:
It is evident from the record that
plaintiff alleges economic losses in
connection with his claims that defendant
deprived him of his constitutional rights to
due process and equal protection under the
law. Plaintiff claims other harm as well,
however, including damage to his reputation
as a business person and lost capacity to
develop as a result of lost time and tenants
due to the instant controversy, County
limitations on development, and competing
development.
Acierno, 1994 U.S. Dist. LEXIS 1683, at *93-94. The district
court relied heavily on Opticians Association of America v.
Independent Opticians of America, 920 F.2d 187 (3d Cir. 1990), in
support of its conclusion that Acierno would suffer irreparable
harm if he were not immediately granted a building permit,
pointing to our statement that "[g]rounds for finding irreparable
injury include loss of control of reputation, loss of trade, and
loss of good will." Id. at 195 (citing 2 J. McCarthy, Trademarks
and Unfair Competition § 32:44 (2d ed. 1984)). We think our
decision in Opticians Association of America is distinguishable,
however, because the result in that case was heavily influenced
by the special problem of confusion that exist in cases involving
trademark infringement and unfair competition. Acierno's problem
is not analogous.11
The district court's reliance on Fitzgerald v. Mountain
Laurel Racing, Inc., 607 F.2d 589 (3d Cir. 1979), cert. denied,
446 U.S. 956 (1980), is also misplaced. There, we concluded
11
. In Opticians Association of America, this Court reversed an
order denying a motion for a preliminary injunction and instead
instructed the district court to enter an order granting the
preliminary injunction because the court incorrectly applied
trademark law. Opticians Ass'n of America, 920 F.2d at 192.
Relying on McCarthy's treatise, Trademarks and Unfair
Competition, we concluded that the district court had not fully
considered the severe detriment to the association's reputation
because of the likelihood of confusing the association's services
with those of the other group using the association's trademarks.
Id. at 195-96 (citing 2 J. McCarthy, Trademarks and Unfair
Competition § 32:44 (2d ed. 1984)). Thus, we held that
"[p]otential damage to reputation constitutes irreparable injury
for the purpose of granting a preliminary injunction in a
trademark case." Id. at 196 (emphasis added).
there was irreparable injury to the business and reputation of a
licensed harness racing trainer as a result of his eviction from
a racetrack. Id. at 601. The case does not stand for the
proposition that any showing of potential harm to a plaintiff's
reputation is sufficient to warrant a mandatory preliminary
injunction that fundamentally changes the status quo. Cf. Morton
v. Beyer, 822 F.2d 364 (3d Cir. 1987) (reversing order granting
preliminary injunction compelling reinstatement of a corrections
officer with back pay following his suspension by New Jersey
Department of Corrections). In Morton, we decided that showing
some potential harm to reputation is usually insufficient to
support a conclusion that irreparable harm exists. We
distinguished Fitzgerald, stating "the licensee in Fitzgerald was
potentially barred, not merely impaired, from obtaining
employment. No such extreme deprivation is present here." Id.at 372 n.13 (citation omitted).
This record does not show that Acierno's reputation has
been significantly damaged by the County's denial of a building
permit. Acierno's application seeks permission for a use that is
incompatible with the current zoning ordinance. Acierno could
have avoided his problem if he had acted within three years after
his Plan was filed. It is difficult for us to see how the
County's denial of a building permit that Acierno waited almost
twelve years to apply for is the cause of any damage Acierno's
reputation as a real estate developer may suffer. It is also
difficult for us to believe that this particular development is
uniquely important to Acierno in light of the testimony he gave
at his deposition about all the other real estate projects in
which he is interested. See App. at 184-97.
Rather, we think the inquiry into irreparable harm in
Acierno's case must focus on whether money damages can make him
whole if his wish to develop the property as a commercial mall is
wrongfully delayed. Acierno testified on deposition that
"[potential tenants] are lined up at the door to lease space at
the site . . . ." Id. at 559. He acknowledged that no potential
tenant had threatened to locate elsewhere if the district court
denied the preliminary injunction. Id. at 557-58. His testimony
indicates that no other site in the area presently poses any
direct threat to his development:
[O]ther sites in the area, are either not
zoned or if they are they don't have the
traffic capacity to be able to use them for a
store as large [as required by one potential
tenant]. . . . [My site] is probably the
only site . . . that can be developed
nowadays in [the metropolitan] area because
of the traffic problems that exist there.
Id. at 553. The district court's finding that intervening
commercial development might reduce the feasibility of Acierno's
development is clearly erroneous.12
12
. The only evidence which may indicate otherwise is said to
appear at page 22 of the transcript of Acierno's deposition,
where he testified: "Every major tenant we've talked to
. . . has said that they will go elsewhere . . . if the
[building] permit does not issue." Brief for Appellee at 41. We
assume this reference is accurate, though it is not included in
the appendix, but we believe it is nevertheless insufficient to
demonstrate a right to a mandatory preliminary injunction.
Finally, we consider Acierno's contention that he will
lose a key anchor tenant with whom he is presently negotiating if
he does not get a building permit forthwith. He argues that the
loss of this anchor tenant will have a domino effect on his
ability to attract other tenants. He says that there is no way
to measure his financial loss if the deal falls through because
he is only engaged in negotiations with the proposed anchor
tenant and has reached no final agreement with it on financial
terms. Like Janus gazing forward and backward each New Year,
this argument points in two directions. The negotiating stage
Acierno is now engaged in could be thought of as making any harm
he will suffer if the building permit is delayed too remote and
speculative to justify a mandatory injunction. As we stated in
Continental Group, Inc. v. Amoco Chemicals Corp., 614 F.2d 351(3d Cir. 1980):
[M]ore than a risk of irreparable harm must
be demonstrated. The requisite for
injunctive relief has been characterized as a
"clear showing of immediate irreparable
injury," or a "presently existing actual
threat; [an injunction] may not be used
simply to eliminate a possibility of a remote
future injury . . . ."
Id. at 358 (citations omitted) (quoting Ammond v. McGahn, 532
F.2d 325, 329 (3d Cir. 1976) and Holiday Inns of America, Inc.
v. B & B Corp., 409 F.2d 614, 618 (3d Cir. 1969)); see also
Campbell Soup Co. v. Conagra, Inc., 977 F.2d 86, 91-92 (3d Cir.
1992) (establishing some remote risk of irreparable harm not
enough).
Even if we view Acierno's anchor tenant's problem in
the direction he asks, his problem is not solved on this record's
showing of irreparable harm. An inability to precisely measure
financial harm does not make that harm irreparable or
immeasurable. If Acierno has a right to proceed with commercial
development on the land he has allowed to remain undeveloped more
than twelve years after the Delaware Supreme Court directed the
County to approve and file his Plan, we think any actionable harm
he may suffer, if it is ultimately determined that the County
violated his constitutional rights, can be remedied by an award
of money damages. This record shows no more than a potential for
purely economic injury to Acierno. If Acierno succeeds on the
merits of his claim, we believe that economic loss, if it occurs,
can be measured in monetary terms and satisfied by a damage award
after trial on the merits.13
13
. On remand, however, we think the district court would be
wise to reconsider whether it should abstain from further action
in this case, particularly in connection with the injunctive
relief it is asked to issue, in light of the pending state court
action in which the County seeks a declaratory judgment affirming
the County's refusal to issue a building permit to Acierno. A
party arguing in favor of abstention under the principles of
Younger v. Harris, 401 U.S. 37 (1971), must show:
(1) there are ongoing state proceedings
involving the would-be federal plaintiffs
that are judicial in nature, (2) the state
proceedings implicate important state
interests, and (3) the state proceedings
afford an adequate opportunity to raise the
federal claims . . . .
Marks v. Stinson, 19 F.3d 873, 882 (3d Cir. 1994) (citing
Middlesex County Ethics Comm'n v. Garden State Bar Ass'n, 457
U.S. 423, 432 (1982)). The existence of these facts, however,
does not compel abstention. Id.; see also Gwynedd Properties,
IV. Conclusion
For these reasons, the district court's order granting
Acierno a preliminary injunction compelling the County to issue a
building permit and discontinue any interference with Acierno's
development of the Property will be reversed and the case
remanded for further proceedings consistent with this opinion.
(..continued)
Inc. v. Lower Gwynedd Township, 970 F.2d 1195, 1201 (3d Cir.
1992) ("[W]here federal proceedings parallel but do not interfere
with the state proceedings, the principles of comity underlying
Younger abstention are not implicated."). Indeed,
[a] federal plaintiff may pursue parallel
actions in the state and federal courts so
long as the plaintiff does not seek relief in
the federal court that would interfere with
the state judicial process. Moreover, since
parallel proceedings always involve a
likelihood that a final merits judgment in
one will effectively terminate the other, it
necessarily follows that the mere fact that a
judgment in the federal suit might have
collateral effects in the state proceeding is
not interference for Younger purposes.
Marks, 19 F.3d at 885 (footnote omitted) (citing Gwynedd
Properties, Inc., 970 F.2d at 1200-03).