City of Eastlake v. Forest City Enterprises, Inc

• Decision Date: 21 June 1976
• Docket Number: No. 74-1563,74-1563
• Citation: 426 U.S. 668,49 L.Ed.2d 132,96 S.Ct. 2358
• Parties: CITY OF EASTLAKE et al., Petitioners, v. FOREST CITY ENTERPRISES, INC
• Court: U.S. Supreme Court

426 U.S. 668

96 S.Ct. 2358

49 L.Ed.2d 132

CITY OF EASTLAKE et al., Petitioners,

v FOREST CITY ENTERPRISES, INC.

No. 74-1563.

Argued March 1, 1976.

Decided June 21, 1976.

Syllabus

The Ohio Constitution reserves to the people of each municipality in the State the power of referendum with respect to all questions that the municipality is authorized to control by legislation. Respondent real estate developer applied for a zoning change to permit construction of a high-rise apartment building on land it owned in petitioner Ohio city. While the application was pending, the city charter was amended by popular vote so as to require that any changes in land use agreed to by the City Council be approved by a 55% Vote in a referendum. The City Planning Commission recommended, and the City Council approved, the proposed zoning change, but the Commission rejected respondent's further application for "parking and yard" approval for the proposed apartment building on the ground that the Council's rezoning action had not been submitted to a referendum. Respondent then filed suit in state court, seeking a judgment declaring the city charter amendment invalid as an unconstitutional delegation of legislative power to the people. While the action was pending, the proposed zoning change was defeated in a referendum. The charter amendment was upheld by the trial court and by the Ohio Court of Appeals, but the Ohio Supreme Court reversed, holding that the amendment constituted a delegation of power violative of federal constitutional due process guarantees because the voters were given no standards to guide their decision. Held: The city charter amendment does not violate the due process rights of a landowner who applies for a zoning change. Pp. 672-679.

(a) A referendum, which is a means for direct political participation by the people, allowing them what amounts to a veto power over legislative enactments, cannot be characterized as a delegation of power. In establishing legislative bodies, the people can reserve to themselves power to deal directly with matters that might otherwise be assigned to the legislature, and here the power of referendum was specifically reserved to the people under the Ohio Constitution. Pp. 672-674.

(b) The doctrine that legislative delegation of power to regulatory bodies must be accompanied by discernible standards is inapplicable where, as here, rather than power being delegated, the power exercised is one reserved by the people to themselves. P. 675.

(c) A referendum result that is arbitrary and capricious, bearing no relation to police power, is open to challenge in state court, where the scope of the available state remedy would be determined as a matter of state law and under the Fourteenth Amendment. Pp. 676-677.

(d) As a basic instrument of democratic government, the referendum process does not, in itself, violate the Due Process Clause of the Fourteenth Amendment when applied to a rezoning ordinance. Eubank v. Richmond, 226 U.S. 137, 33 S.Ct. 76, 57 L.Ed. 156; Washington ex rel. Seattle Title Trust Co. v. Roberge, 278 U.S. 116, 49 S.Ct. 50, 73 L.Ed. 210, distinguished. Pp. 677-679.

41 Ohio St.2d 187, 324 N.E.2d 740, reversed and remanded.

J. Melvin Andrews, Eastlake, Ohio, for petitioners.

William D. Ginn, Cleveland, Ohio, for respondent.

Mr. Chief Justice BURGER delivered the opinion of the Court.

The question in this case is whether a city charter provision requiring proposed land use changes to be ratified by 55% Of the votes cast violates the due process rights of a landowner who applies for a zoning change.

The city of Eastlake, Ohio, a suburb of Cleveland, has a comprehensive zoning plan codified in a municipal ordinance. Respondent, a real estate developer, acquired an eight-acre parcel of real estate in Eastlake zoned for "light industrial" uses at the time of purchase.

In May 1971, respondent applied to the City Planning Commission for a zoning change to permit construction of a multi-family, high-rise apartment building. The Planning Commission recommended the proposed change to the City Council, which under Eastlake's procedures could either accept or reject the Planning Commission's recommendation. Meanwhile, by popular vote, the voters of Eastlake amended the city charter to require that any changes in land use agreed to by the Council be approved by a 55% Vote in a referendum.¹ The City Council approved the Planning Commission's recommendation for reclassification of respondent's property to permit the proposed project. Respondent then applied to the Planning Commission for "parking and yard" approval for the proposed building. The Commission rejected the application, on the ground that the City Council's rezoning action had not yet been submitted to the voters for ratification.

Respondent then filed an action in state court, seeking a judgment declaring the charter provision invalid as an unconstitutional delegation of legislative power to the people.² While the case was pending, the City Council's action was submitted to a referendum, but the proposed zoning change was not approved by the requisite 55% Margin. Following the election, the Court of Common Pleas and the Ohio Court of Appeals sustained the charter provision. ³

The Ohio Supreme Court reversed. 41 Ohio St.2d 187, 324 N.E.2d 740 (1975). Concluding that enactment of zoning and rezoning provisions is a legislative function, the court held that a popular referendum requirement, lacking standards to guide the decision of the voters, permitted the police power to be exercised in a standardless, hence arbitrary and capricious manner. Relying on this Court's decisions in Washington ex rel. Seattle Title Trust Co. v. Roberge, 278 U.S. 116, 49 S.Ct. 50, 73 L.Ed. 210 (1928), Thomas Cusack Co. v. Chicago, 242 U.S. 526, 37 S.Ct. 190, 61 L.Ed. 472 (1917), and Eubank v. Richmond, 226 U.S. 137, 33 S.Ct. 76, 57 L.Ed. 156 (1912), but distinguishing James v. Valtierra, 402 U.S. 137, 91 S.Ct. 1331, 28 L.Ed.2d 678 (1971), the court concluded that the referendum provision constituted an unlawful delegation of legislative power.⁴

We reverse.

I

The conclusion that Eastlake's procedure violates federal constitutional guarantees rests upon the proposition that a zoning referendum involves a delegation of legislative power. A referendum cannot, however, be characterized as a delegation of power. Under our constitutional assumptions, all power derives from the people, who can delegate it to representative instruments which they create. See, E. g., The Federalist No. 39 (v. Madison). In establishing legislative bodies, the people can reserve to themselves power to deal directly with matters which might otherwise be assigned to the legislature. Hunter v. Erickson, 393 U.S. 385, 392, 89 S.Ct. 557, 561, 21 L.Ed.2d 616 (1969).⁵

The reservation of such power is the basis for the town meeting, a tradition which continues to this day in some States as both a practical and symbolic part of our democratic processes.⁶ The referendum, similarly, is a means for direct political participation, allowing the people the final decision, amounting to a veto power, over enactments of representative bodies. The practice is designed to "give citizens a voice on questions of public policy." James v. Valtierra, supra, 402 U.S., at 141, 91 S.Ct., at 1333.

In framing a state constitution, the people of Ohio specifically reserved the power of referendum to the people of each municipality within the State.

"The initiative and referendum powers are hereby reserved to the people of each municipality on all questions which such municipalities may now or hereafter be authorized by law to control by legislative action . . . ." Ohio Const., Art. II, § 1f.

To be subject to Ohio's referendum procedure, the question must be one within the scope of legislative power. The Ohio Supreme Court expressly found that the City Council's action in rezoning respondent's eight acres from light industrial to high-density residential use was legislative in nature.⁷ Distinguishing between administrative and legislative acts, the court separated the power to zone or rezone, by passage or amendment of a zoning ordinance, from the power to grant relief from unnecessary hardship.⁸ The former function was found to be legislative in nature.⁹ Accord, Denney v. Duluth, 295 Minn. 22, 28-29, 202 N.W.2d 892, 895-896 (1972); Smith v. Township of Livingston, 106 N.J.Super. 444, 454, 256 A.2d 85, 90 (1969); Wollen v. Borough of Fort Lee, 27 N.J. 408, 422, 142 A.2d 881, 888-889 (1958); Johnston v. City of Claremont, 49 Cal.2d 826, 835-836, 323 P.2d 71, 76-77 (1958); Dwyer v. City Council, 200 Cal. 505, 515, 253 P. 932, 935-936 (1927); Hilltop Realty, Inc. v. City of South Euclid, 110 Ohio App. 535, 164 N.E.2d 180 (1960). Compare Kelley v. John, 162 Neb. 319, 75 N.W.2d 713 (1956), with In re Frank, 183 Neb. 722, 723, 164 N.W.2d 215, 216 (1969).

II

The Ohio Supreme Court further concluded that the amendment to the city charter constituted a "delegation" of power violative of federal constitutional guarantees because the voters were given no standards to guide their decision. Under Eastlake's procedure, the Ohio Supreme Court reasoned, no mechanism existed, nor indeed could exist, to assure that the voters would act rationally in passing upon a proposed zoning change. This meant that "appropriate legislative action (would) be made dependent upon the potentially arbitrary and unreasonable whims of the voting public." 41 Ohio St.2d, at 195, 324 N.E.2d, at 746. The potential for arbitrariness in the process, the court concluded, violated due process.

Courts have frequently held in other contexts that a congressional delegation of power to a regulatory entity must be accompanied by discernible standards, so that the delegatee's action can be measured for its fidelity to the legislative will. See, E. g., Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834 (1944); Amalgamated...