CITY OF CUYAHOGA FALLS v.  
BUCKEYE COMMUNITY HOPE FOUNDATION:

WHAT DOES IT MEAN? 

By 
Kenneth B. Bley* 
 
 INTRODUCTION

In 1995, Buckeye Community Hope Foundation purchased land in the City of Cuyahoga Falls, Ohio, in order to build low income housing.1  The land was properly zoned for multi-family housing; the only thing necessary before a building permit was issued was the approval of a site plan.  Accordingly, in January, 1996, the Foundation submitted an application for a site plan review.  In February, 1996, the City’s Planning Commission unanimously recommended that the City Council approve the site plan. 

In March and April, 1996, the City Council held meetings at which, as might be expected, opponents, including the Mayor, spoke out against the project.  Nevertheless, on April 1, 1996, the City Council approved the site plan by means of an ordinance. 

The City’s charter allowed for the possibility of a referendum on any action taken by the City Council by ordinance if a petition signed by ten percent of the electors was submitted to the City within 30 days of the passage of the ordinance.  Such a petition was filed and, on May 1, 1996, found to comply with the required procedural steps. 

The Foundation filed an action in state court to enjoin the referendum under Ohio law the same day.  The Foundation’s motion for a preliminary injunction was heard on May 15th and denied on May 31st.  Nevertheless, on June 20, 1996, the Foundation requested the issuance of a building permit.  The City Engineer asked the City Law Director whether it should be issued in light of the pending referendum.  The City Law Director replied that it should not be because, under the City’s charter, the effectiveness of the ordinance approving the site plan was suspended until after the referendum had been held.  The City Engineer therefore refused to issue the building permit.

On July 5, 1996, the Foundation sued the City and several individual defendants in federal court alleging violations of the Fair Housing Act2 and the Due Process and the Equal Protection Clauses of the Fourteenth Amendment under 42 U.S.C. § 1983 seeking injunctive relief and damages.

The referendum was held in November, 1996, and the City Council’s action approving the site plan was overturned.  However, because of a stipulation between the parties, the result of the referendum was never certified.

In December, 1997, the Ohio Court of Appeals affirmed the trial court’s denial of the preliminary injunction.  In May, 1998, the Ohio Supreme Court affirmed the action of the Court of Appeals on the ground that, although the approval of the site plan was an administrative procedure, the City’s charter allowed the use of the referendum.  Buckeye Community Hope Foundation v. City of Cuyahoga Falls, 81 Ohio St.3d 559, 692 N.E.2d 997 (1998).  The Ohio Supreme Court then granted the Foundation’s motion for reconsideration and, in July, 1998, reversed itself and held that the Ohio Constitution allowed the use of a referendum only for legislative actions.  Buckeye Community Hope Foundation v. City of Cuyahoga Falls, 82 Ohio St.3d 539, 697 N.E.2d 181 (1998).  As a result, the Foundation finally received its building permit thereby converting its federal action into one solely for damages.

In November, 1999, the District Court granted the City’s motion for summary judgment and dismissed the complaint.  The Court of Appeals, finding that enough evidence had been presented on both the equal protection and substantive due process claims to warrant trial, reversed.  The United States Supreme Court granted the City’s petition for certiorari and, on March 25, 2003, reversed. 

THE EQUAL PROTECTION CLAIM

The Action Taken By The Court Of Appeals

The Court of Appeals, citing Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252 (1977), noted that “Proof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause.”  (263 F.3d at 634.)  The Court of Appeals also noted that the submission of an otherwise proper governmental action to a referendum, motivated by racial bias, is violative of the Equal Protection Clause, citing Hunter v. Erickson, 393 U.S. 385 (1969), and City of Cleburne v. Cleburne Living Center, 473 U.S. 432 (1985).  (263 F.3d at 635.)

The Court of Appeals then applied the multi-factored test set forth in Arlington Heights to determine whether official action was motivated by discriminatory intent.  (263 F.3d at 635.)  It found that one of the tests – a history of discriminatory actions – was inapplicable but that the other three all argued in favor of discriminatory intent: a disproportionate impact on African-Americans; a departure from the normal procedural sequence because a referendum had never been held before on a site plan approval for an apartment building; and statements by opponents, including the Mayor, which could be interpreted as racial bias against Blacks.  (263 F.3d at 635-637.)

As a result, the Court of Appeals determined that the Foundation had produced sufficient evidence to raise a genuine issue of material fact which meant that the District Court had erred in granting summary judgment to the City.  (263 F.3d at 639.) 
 

The Action Taken By The Supreme Court

The Supreme Court restated its holding in Arlington Heights that proof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause.  (123 S.Ct. at 1394.)  However, because the Foundation was claiming injury only from the referendum process – the delay it had suffered in obtaining its building permit – rather than from the result of the referendum itself – which never went into effect – Hunter v. Erickson, Arlington Heights and City of Cleburne were “inapposite.”  (Id.)

The Court pointed out that the City charter’s referendum process was facially neutral and that the action by the City in placing the referendum on the ballot “cannot be said to have given effect to voters’ allegedly discriminatory motives for supporting the petition.”  (Id.)  The Court also held that “the City Engineer, in refusing to issue the building permits while the referendum was still pending, performed a nondiscretionary, ministerial act.”  (Id.)  In particular, the Foundation presented no evidence to show that either of the actions – placing the referendum on the ballot or refusing to issue the permit prior to the referendum – was motivated by racial animus.  (Id.) 

The Supreme Court took the Court of Appeals to task for relying on statements by private citizens and the Mayor as sufficient to demonstrate discriminatory intent.  (Id.)  The Court pointed out that the actions of the citizens in the course of the petition drive were not those of the state and therefore could not serve as state action under the Equal Protection Clause and could not be attributed to the City.  (123 S.Ct. at 1394-1395.)

The actions taken by City officials – allegedly prompting voters to file the petition and speaking against the site plan approval – did not constitute the required state action because there was no evidence that any City official exercised any power over the voters’ decision to file the petition “much less the kind of ‘coercive power’ either ‘overt or covert’ that would render the voters’ actions and statements, for all intents and purposes, state action.”  (123 S.Ct. at 1395.) 

The Court therefore held that the City’s actions had not violated the Foundation’s right to equal protection.  (123 S.Ct. at 1396.)

THE SUBSTANTIVE DUE PROCESS CLAIM

The Action Taken By The Court Of Appeals

The Fourteenth Amendment protects against the deprivation of property without due process of law.  Thus, in order to state a claim for violation of the Substantive Due Process Clause, a plaintiff must first establish the existence of a property right.  The Court of Appeals found such a property right to exist in the site plan approved by the City Council.  (263 F.3d at 641-642.) 

The Court of Appeals, quoting from City of Eastlake v. Forest City Enterprises, Inc., 426 U.S. 668, 676 (1976), pointed out that, if the result of a referendum is arbitrary and capricious, the fact that action is the direct result of the voters’ wishes will not save it.  (263 F.3d at 643.)  It then looked to see “if the defendants’ actions were arbitrary and capricious.”  (Id.)  It concluded that the City’s actions were because

“when a city denies a landowner the benefit of a general zoning scheme, despite its belief and/or knowledge that the landowner’s property is entirely consistent with that scheme, it runs afoul of the Fourteenth Amendment’s guarantee of due process.”  263 F.3d at 644.

Thus, by allowing the referendum process to go forward, after the approval of the site plan, demonstrated that the project “was entirely consistent with the zoning code,” the City violated the Foundation’s right to substantive due process.  (Id.)

The Action Taken By The Supreme Court 

The Supreme Court did not determine whether the Court of Appeals had been correct in finding that the Foundation had a protected property right.

“We need not decide whether respondents possessed a property interest in the building permits, because the City engineer’s refusal to issue the permits while the petition was pending in no sense constituted egregious or arbitrary government conduct.  See County of Sacramento v. Lewis, 523 U.S. 833, 846, 118 S.Ct. 1708, 140 L.Ed.2d 1043 (1998) (noting that in our evaluations of ‘abusive executive action,’ we have held that ‘only the most egregious official conduct can be said to be “arbitrary in the constitutional sense”’).”  123 S.Ct. at 1396.

The Court was careful to emphasize that it was the process which made the referendum possible and not the outcome of the referendum which was in issue.  (Id.)  It therefore focused on the actions taken by the City officials in refusing to issue the building permit while the referendum was pending.  (Id.) 

The Court found that the City Engineer’s refusal to issue the building permit based on advice given to him by the City Law Director (which was, in turn, based on the wording of the City charter) was “eminently rational.”  (Id.) 

The Foundation had argued that “the City’s submission of an administrative land-use determination to the Charter’s referendum procedures constituted per se arbitrary conduct.”  (Id.)3  However, the Court rejected the Foundation’s argument because

“The people retain the power to govern through referendum    ‘“with respect to any matter, legislative or administrative, within the realm of local affairs.”’ [City of Eastlake v. Forest City Enterprises, Inc., 426 U.S. 688 (1976)], at 674, n.9, 96 S.Ct. 2358.”  (Id.) 

Finally, in a concurring opinion, Justice Scalia, joined in by Justice Thomas, stated that the Substantive Due Process Clause protects only “fundamental liberty interests” which did not include “freedom from delay in receiving a building permit.”  (123 S.Ct. at 1397.)  Moreover, Justices Scalia and Thomas felt that the Equal Protection Clause, and not the general Substantive Due Process Clause, governed.  (Id.) 

In short, the Court was unanimous in deciding that the City’s actions had not violated the Foundation’s right to substantive due process.

WHAT DOES IT ALL MEAN?

The Court’s decision in Cuyahoga Falls adds nothing new when it comes to the question of when the Equal Protection Clause will be violated by giving effect to the direct vote of the electorate through the referendum process in the land use context because the Court was careful to emphasize that it was looking only to determine whether the process leading up to the referendum – and not the results of the referendum itself – demonstrated the requisite discriminatory intent or purpose.

The Court’s treatment of the subjection of an administrative action to the referendum process is more questionable.  Normally, process is dealt with under the procedural portion of the Due Process Clause, which requires a meaningful opportunity to be heard before someone is deprived of property.  See, e.g., Mathews v. Eldridge, 424 U.S. 319, 333 (1976).  Once a property right has been created – and, as noted above, the Court of Appeals found that the approval of the site plan by the City Council created that property right – the electorate should not have the right to deprive a landowner of that property right.  This is demonstrated by Club Misty, Inc. v. Laski, 208 F.3d 615 (7th Cir.), cert denied, 531 U.S. 1011 (2000), where the Court of Appeals found a property right because Illinois law provided that, once a liquor license had been granted, it could be revoked only for cause unless a determination was made that the licensee was unqualified or the premises unsuitable.  Illinois law also allowed a referendum on whether a liquor license at a specific address could be revoked.  (208 F.3d at 617.)  The plaintiff in Club Misty filed suit in federal court after its liquor license had been revoked through the referendum process, claiming that the revocation violated its right to procedural due process.  (208 F.3d at 616.)  The Court of Appeals, relying on an earlier case which had held that “an election is not an adjudicative procedure that comports with due process” (208 F.3d at 620), concluded that the District Court had erred in dismissing the lawsuit because “[a]n individual’s life, liberty, and property are not held or enjoyed at the sufferance or the electorate.”  (208 F.3d at 621.) 

Club Misty was cited in footnote 78 on page 42 of the Foundation’s respondent’s brief to the Court and responded to by the City in its reply brief on page 19; it was not mentioned by the Court in its opinion.

In support of its position that the use of the referendum process could not be a per se substantive due process violation, the Court cited to footnote 9 in City of Eastlake, supra, 426 U.S. at 672:

“The power of initiative or referendum may be reserved or conferred ‘with respect to any matter, legislative or administrative, within the realm of local affairs ….’  5 E. McQuillan, Municipal Corporations § 16.54, p. 208 (3d ed. 1969).”

The quote from McQuillan was dicta to the extent that it referred to administrative actions because the rezoning in Eastlake was legislative.  (426 U.S. at 671.)

If Club Misty’s holding that the right to procedural due process is violated when a deprivation of property, which can only be done through an administrative procedure, is put into the hands of the electorate through a referendum – what Judge Posner described as “not too much delegation, but delegation to the wrong body’  (208 F.3d at 622, quoting from an earlier case) – then subjecting a landowner to the referendum process after an administrative procedure appears to be arbitrary and capricious.  If the referendum goes against the landowner, then he or she will have been deprived of property without procedural due process.  If the landowner prevails, then he or she will have undergone uncertainty, delay and the costs associated with both delay and fighting to win the referendum.  If the only constitutionally valid outcome of a referendum is a win for the landowner, how can it be fair to force him or her to have to face it?

The court’s failure to recognize the procedural unfairness of allowing a referendum to overturn an administrative approval may have arisen from the fact that no issue of procedural due process was ever presented to, or considered by, any of the three federal courts which looked at the Foundation’s claims.  The lower courts looked only at substantive due process claims; the Court of Appeals noted that the District Court had dismissed the Foundation’s substantive due process claim (263 F.3d at 633) and the Court of Appeals’ discussion is headed “Substantive Due Process.”  (263 F.3d at 641.)  The only reference to a procedural due process claim is found in a footnote in the Court of Appeals’ opinion, where it was rejected:

“Plaintiffs in their brief also assert a procedural due process claim based on defendants ‘subjecting them to … an extra layer of administrative process – – a procedure without clear, rational rules to which they could look for guidance in planning to develop their property.’  See Plaintiffs’ Br. at 50.  This is actually a substantive due process claim, since the claim essentially amounts to an attack on the rationality of the referendum procedure itself.  Therefore, this claim merges with the substantive due process arguments discussed above.”  263 F.3d at 644 n.6.

The Foundation tried to argue a procedural due process claim at oral argument before the Supreme Court (see transcript of oral argument at 56, 2003 WL 221858) but this approach was rejected by one of the Justices who stated:

“You never mentioned procedural due process in your brief.  The first mention I heard of it is in your argument here, where you say it doesn’t matter whether it’s substantive or procedural.  Your brief went entirely to substantive due process.”  Transcript of oral argument at 59-60.

It is unfortunate that the procedural due process issue was never brought to any court’s attention.  Had it been raised before the lower courts and had it been made one of the questions presented for the Supreme Court’s review, the outcome might have been very different.

The Court’s reference to County of Sacramento v. Lewis is also interesting.  Lewis involved a situation where a sheriff’s deputy had responded to a call to break up a fight.  (523 U.S. at 836.)  While he was at the fight scene, the deputy saw two young men on a motorcycle approaching at a high speed.  (Id.)  Even though neither had had anything to do with the fight, the deputy yelled at them to pull over.  (Id.)  Instead of doing so, they sped off; the deputy jumped in his cruiser and chased after them.  (523 U.S. at 837.)  The chase ended when the rider, Philip Lewis, fell off the motorcycle and was run over by the deputy’s car; Lewis died at the scene.  (Id.)  Lewis’s parents sued, claiming that the deputy’s actions had violated their son’s right to substantive due process.  (Id.)

The Court held that the correct standard to be used to determine if there had been a violation of the right to substantive due process because of an injury resulting from a high speed automobile chase was to see if the action complained of would shock the judicial conscience.4  (523 U.S. at 836.)  Thus, the reference to County of Sacramento in Cuyahoga Falls stands for the proposition that, even in the land use context, a violation of substantive due process cannot occur unless the action taken by the government shocks the judicial conscience. 

The Third Circuit came to the same conclusion in a case which was decided just before the Court’s decision in Cuyahoga Falls.  In United Artists Theatre Circuit v. Township of Warrington, 316 F.3d 392 (3d Cir.), reh’g and reh’g en banc denied, 324 F.3d 133 (3d Cir. 2003), the Court of Appeals, citing County of Sacramento, also adopted the shock-the-conscience test in the land use context. 

The Sixth Circuit, also citing County of Sacramento, has taken the same position.

“[T]he ‘arbitrary and capricious’ standards set forth in Pearson [v. City of Grand Blanc, 961 F.3d 1211 (6th Cir. 1992)] is simply another formulation of, but is no less stringent than, the more traditional ‘shocks the conscience’ standard.”  Bowers v. City of Flint, 325 F.3d 758, 763 (6th Cir. 2003).5

The use of the shock-the-conscience test in the land use context is a radical departure from the test used first stated in Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 395 (1926):

“[B]efore the ordinance [rezoning the plaintiff’s land] can be declared unconstitutional, [it must be shown] that such provisions are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.”

It was this test which the Court used in Nectow v. City of Cambridge, 277 U.S. 183, 188 (1928), when it set aside a rezoning which put the land in question into a residential district, thereby depriving it of all practical use because the adjoining land was being used for industrial purposes.

CONCLUSION

Justice Marshall, in his oft quoted dissent in Village of Belle Terre v. Boraas, 416 U.S. 1, 13 (1974), stated: “Our role is not and should not be to sit as a zoning board of appeals.”  That view, implemented in any number of ways, has become a mantra for the federal judiciary.  Cuyahoga Falls is the latest – and probably not the last – federal case to deconstitutionalize the land use process.  As currently interpreted, the Due Process Clause may effectively be read to state:

“Nor shall any state deprive any person of life, liberty, or property, other than the right to develop land, without due process of law.”

Indeed, a lawyer who has the temerity to assert that actions taken by local government in the land use approval process constitute a violation of substantive due process may find himself or herself facing a request for sanctions under Rule 11.