Hyde Park Co v. Santa Fe City Council, Nos. 99-2079

Decision Date29 September 2000
Docket Number99-2084,Nos. 99-2079
Citation226 F.3d 1207
Parties(10th Cir. 2000) HYDE PARK COMPANY, a New Mexico limited liability company, Plaintiff-Appellant, v. SANTA FE CITY COUNCIL; PESO CHAVEZ, Councilor; MOLLY WHITTED, Councilor; AMY MANNING, Councilor; FRANK MONTANO, Councilor; LARRY DELGADO, Councilor; PATTI BUSHEE, Councilor; CHRIS MOORE, Councilor, ART SANCHEZ, Councilor; DEBBIE JARAMILLO, Mayor, Defendants-Appellees, and GREATER CALLECITA NEIGHBORHOOD ASSOCIATION; WILLIAM A. DARKEY; RICHARD FOLKS, Defendants-Intervenors-Appellees. HYDE PARK COMPANY, a New Mexico limited liability company, Plaintiff-Appellant, v. FRANK MONTANO, Councilor; LARRY DELGADO, Councilor; FREDERICK M. ROWE; PATTI BUSHEE, Councilor; GREATER CALLECITA NEIGHBORHOOD ASSOCIATION; RICHARD FOLKS, Defendants-Appellees
CourtU.S. Court of Appeals — Tenth Circuit

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO (D.C. No s. CIV-98-1011-JP/LCS & CIV-98-821-JP/LCS)

Jerry A. Walz (Karl H. Sommer of Sommer, Fox, Udall, Othmer, Hardwick &amp Wise, P.A., and Marianna G. Geer of Felker, Ish, Ritchie & Geer, P.A., Santa Fe, New Mexico, on the brief), Albuquerque, New Mexico, for Plaintiff-Appellant.

Nancy R. Long of Herrera, Long & Pound, P.A., and Frederick M. Rowe, Santa Fe, New Mexico, for Defendants-Appellees & Defendants-Intervenors-Appellees.

Before BALDOCK, McKAY, and ALARCON,* Circuit Judges.

BALDOCK, Circuit Judge.

The narrow issue we must decide in this case is whether Plaintiff Hyde Park Company was entitled as a matter of federal constitutional law to approval of a proposed subdivision plat for land within the City of Santa Fe, New Mexico, where Hyde Park's proposed plat to Defendant Santa Fe City Council met all enumerated requirements for plat approval.

I.

Plaintiff Hyde Park Company owns certain real property within the City of Santa Fe. In September 1994, Hyde Park applied to the City for approval of a proposed residential subdivision plat. When, over two years later and after much wrangling, the City Council voted 5-2 to reverse the City Planning Commission's decision to approve Hyde Park's proposed plat, Hyde Park filed suit in New Mexico state court against the City Council and its members. Hyde Park Co. v . Santa Fe City Council, No. 98-CV-1011 (D.N.M., removed Aug. 21, 1998). Shortly thereafter, Hyde Park also filed suit against the Greater Callecita Neighborhood Association and certain individuals opposed to the application. Hyde Park Co. v. Greater Callecita Neighborhood Ass'n, 98-CV-821 (D.N.M., removed July 8, 1998). In addition to numerous state law claims, the suits alleged that Defendants had conspired to deprive and did deprive Hyde Park of property without due process of law in violation of 42 U.S.C. § 1983. Defendants subsequently removed both suits to federal court. See 28 U.S.C. § 1441.

Upon Defendants' respective motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the district court held that Hyde Park had no protectible property interest in its unapproved plat application. Accordingly, Hyde Park's claims that Defendants deprived it of procedural and substantive due process by rejecting its proposed plat necessarily failed. The district court dismissed Hyde Park's federal claims and remanded its state law claims to state court. See 28 U.S.C. § 1367(c)(3). Hyde Park appeals. We exercise jurisdiction under 28 U.S.C. § 1291. We review the district court's orders of dismissal de novo, accepting the complaints' well-pleaded factual allegations as true. Morse v. Regents of Univ. of Colorado, 154 F.3d 1124, 1126 (10th Cir. 1998). Applying this standard, we affirm.1

II.

The Fourteenth Amendment proscribes a state from, among other things, depriving a party of "property without due process of law." U.S. Const. amend. XIV, § 1. Procedural due process ensures the state will not deprive a party of property without engaging fair procedures to reach a decision, while substantive due process ensures the state will not deprive a party of property for an arbitrary reason regardless of the procedures used to reach that decision. See, e.g., Mitchell v. City of Moore, 218 F.3d 1190, 1198 (10th Cir. 2000); Hennigh v. City of Shawnee, 155 F.3d 1249, 1253 (10th Cir. 1998); Archuleta v. Colorado Dep't of Institutions, Div. of Youth Serv., 936 F.2d 483, 490 (10th Cir. 1991). We established nearly twenty-five years ago that to prevail on either a procedural or substantive due process claim, a plaintiff must first establish that a defendant's actions deprived plaintiff of a protectible property interest.2 See Weathers v. West Yuma County Sch. Dist. R-J-1, 530 F.2d 1335, 1340-42 (10th Cir. 1976) (absence of a protectible property interest foreclosed further inquiry into plaintiff's procedural and substantive due process claims) (citing Jeffries v. Turkey Run Consol. Sch. Dist., 492 F.2d 1, 5 (7th Cir. 1974) (Stevens, J.) (absence of a property interest was fatal to plaintiff's procedural and substantive due process claims)).

The Supreme Court defines "property" in the context of the Fourteenth Amendment's Due Process Clause as a "legitimate claim of entitlement" to some benefit. Board of Regents v. Roth, 408 U.S. 564, 577 (1972). An abstract need for, or unilateral expectation of, a benefit does not constitute "property." Id. Due Process is not an end in itself. Rather, the constitutional purpose of Due Process "is to protect a substantive interest to which . . . [a party] has a legitimate claim of entitlement." Olim v. Wakinekona, 461 U.S. 238, 250 (1983). Property interests "are created and their dimensions are defined by existing rules and understandings that stem from an independent source such as state law rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Id. Thus, consistent with Supreme Court precedent, a right to a particular decision reached by applying rules to facts constitutes "property." See Fleury v. Clayton, 847 F.2d 1229, 1231 (7th Cir. 1988) (Easterbrook, J.).

In municipal land use regulation cases such as this, the entitlement analysis presents a question of law and focuses on "whether there is discretion in the defendants to deny a zoning or other application filed by the plaintiffs." Norton v. Village of Corrales, 103 F.3d 928, 931-32 (10th Cir. 1996). "The entitlement analysis centers on the degree of discretion given the decisionmaker and not on the probability of the decision's favorable outcome." Jacobs, Visconsi & Jacobs, Co. v. City of Lawrence, 927 F.2d 1111, 1116 (10th Cir. 1991). To prevail, Hyde Park must therefore demonstrate that a set of conditions exist under state and local law, "the fulfillment of which would give rise to a legitimate expectation" that the City Council would approve Hyde Park's plat. Id. In other words, Hyde Park must show that under the applicable law, the City Council had limited discretion to disapprove the proposed plat. "Otherwise, the city's decisionmaking lacks sufficient substantive limitations to invoke due process guarantees." Id.

III.

A myriad of New Mexico state statutes and Santa Fe city ordinances govern the process by which a plat application is approved or disapproved. Under N.M Stat. Ann. § 3-19-1 (Michie Supp. 1999), a municipality may establish a planning commission and delegate authority to it. The statute provides in relevant part:

A municipality is a planning authority and may, by ordinance:

A. establish a planning commission;

B. delegate to the planning commission;

(1) the power, authority, jurisdiction and duty to enforce and carry out the provisions of law relating to planning, platting and zoning, and

(2) other power, authority, jurisdiction and duty incidental and necessary to carry out the purpose of . . . [Article 19] [and]

C. retain to the governing body as much of this power, authority, jurisdiction and duty as it desires; . . . .

Id. (emphasis added).

Pursuant to § 3-19-1, the Santa Fe City Council enacted Santa Fe, NM, Code § 14-2.1 establishing a Planning Commission. Section 14-2.2 delegates the City Council's authority "for planning within the planning jurisdiction of the city, and for approving subdivision plats within the . . . city . . . to the planning commission, except for those powers retained by the governing body in the Santa Fe City Code." Id. § 14-2.2 (emphasis added). The City Code imposes a two-tiered plat approval process before the Planning Commission, i.e., preliminary plat approval, see id. § 14-82.2, and final plat approval, see id. § 14-82.3.

The City Council's delegation of authority to the Planning Commission, however, is not absolute. The Council retains the power to review the Planning Commission's decisions. Section 14-7.5A provides that within thirty days, the Council may decide to review any final order or determination of the Planning Commission upon proper notice, and "such notice shall be a stay of execution of such final order or determination." Id. § 14-7.5A (emphasis added). In reviewing such final order or determination, "the governing body may reverse or affirm, wholly or partly, or may modify the order, requirements, decision or determination as ought to be made and to that end shall have in addition to all other municipal authority, that authority of the planning commission." Id. § 14-7.5B (emphasis added). Thus, given the City Council's right of review, ultimate planning decisions within the City of Santa Fe clearly rest with the City Council. See Mitchell v. Hedden, 610 P.2d 752, 753 (N.M. 1980) ("The Planning Commission is a creature of the City Council and has no authority independent of the City Council.").

For purposes of our review, we accept as true Hyde Park's allegation that "[e]very city department having the duty to review the final submission for compliance with the subdivision regulations and other regulations of the City of Santa Fe has indicated that the final...

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