874 F.2d 1070 (5th Cir. 1989), 87-3812, Jackson Court Condominiums, Inc. v. City of New Orleans

Docket Nº:87-3812.
Citation:874 F.2d 1070
Party Name:JACKSON COURT CONDOMINIUMS, INC., Plaintiff-Appellant, v. CITY OF NEW ORLEANS, Defendant-Appellee.
Case Date:June 13, 1989
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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874 F.2d 1070 (5th Cir. 1989)

JACKSON COURT CONDOMINIUMS, INC., Plaintiff-Appellant,

v.

CITY OF NEW ORLEANS, Defendant-Appellee.

No. 87-3812.

United States Court of Appeals, Fifth Circuit

June 13, 1989

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[Copyrighted Material Omitted]

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Warren A. Goldstein, New Orleans, La., for plaintiff-appellant.

Bruce E. Naccari, Okla Jones, II, Eleanor K. Roemer, City Attys., New Orleans, La., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before WILLIAMS and GARWOOD, Circuit Judges, and NOWLIN [*], District Judge.

JERRE S. WILLIAMS, Circuit Judge:

Jackson Court Condominiums, Inc., the former owner of a condominium complex, sued the City of New Orleans after the Council of the City of New Orleans (hereafter "the City Council" or "the Council") passed a moratorium on the establishment of time-share condominiums in residential areas. The Council then refused to grant the company an exemption from the moratorium under a waiver provision. The $3.5 million suit alleges equal protection violations, both substantive and procedural due process violations, various state law claims, and an unconstitutional taking. The district court granted summary judgment for the city, and Jackson Court filed a timely appeal. We find the district court's ruling correct and affirm its judgment.

Factual and Procedural Background

In the early 1980's time-share condominiums were a rapidly growing phenomenon and developers began to build or create them in New Orleans. The City Council of New Orleans became concerned that this phenomenon would have a deleterious effect on the city's historic neighborhoods.

As a result, in December 1980, the City Council passed an ordinance asking the City Planning Commission to make a comprehensive zoning study of time-sharing and transient vacation rentals. At the same time it embarked on a program of creating moratoriums on time-shares, first in the Vieux Carre district, nine months later in the Faubourg Marigny district, and finally on October 22, 1981, it passed Ordinance 8344 M.C.S. which created a city-wide moratorium on time-shares within certain zoning classification areas. 1 This moratorium contained a provision allowing the Council to grant a waiver to a covered party if it could demonstrate that it would experience undue hardship and the time-share would not adversely affect the character of the neighborhood. 2

During this same period, the Council began considering and holding hearings on proposals to create a ban upon time-shares in certain zoning classification areas including family residential districts. But it was not until April 23, 1982, that the final policy of the city creating a permanent ban on time-shares in RM-1 and RM-2 residential

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districts was enacted. While these policy making activities of the city were going on, Jackson Court Condominiums, Inc. on August 15, 1981, purchased a 21-unit apartment building on the edge of the Garden District in an area zoned for RM-2 uses. Jackson Court officials were aware that the city was considering a comprehensive zoning amendment which would ban time-share condominiums in the RM-1 and RM-2 zoning districts. Jackson Court's purchase was made ten days after the Planning Commission's first public hearing.

Jackson Court purchased the apartments with the intent of transforming them into luxury time-share condominiums, and to that end invested $1.2 million in the property. A map which Jackson Court prepared for trial shows 40 properties in the neighborhood of Jackson Court, 29 of which were non-transient residential uses, six of which were community uses, four of which were small-scale commercial and business uses, and one of which was a boarding house.

Jackson Court eventually applied for a waiver from the provisions of the city-wide time-share moratorium, and had a hearing before the City Council on April 15, 1982. The day prior to the hearing, Jackson Court had filed a condominium declaration (which contained provisions permitting time-sharing) with the Conveyance Office of the Parish of Orleans and had registered with the City of New Orleans. The City Council refused Jackson Court's application for a waiver in a 6-1 vote. Councilman Singleton, whose district included Jackson Court, informed Jackson Court at the hearing that he did not think he could vote for the waiver because of neighborhood reaction against the time-share arrangement, and he advised Jackson Court that litigation might be the only alternative. Jackson Court claims that the City Council had a functioning "gentlemen's agreement" regarding zoning matters under which each councilmember agreed to vote as did the councilmember from the affected district. Thus, Jackson Court claims that because the Councilman from its district had already made up his mind, the Council had already made up its collective mind, and Jackson Court could not have received a fair hearing regardless of the merits of its case.

The Council had previously exempted four time-share projects from the provisions of Ordinance No. 8293 M.C.S., the earlier Faubourg Marigny moratorium. Those exemptions were granted between September 3, 1981 and December 10, 1981. While Jackson Court was the only time-share project to come before the Council and not get a waiver, it was also the only project which applied for a waiver under the later city-wide moratorium.

One week after Jackson Court's application for a waiver was rejected, Ordinance No. 8585 M.C.S. modified the comprehensive zoning ordinance to include a permanent ban on time-shares in RM-1 and RM-2 residential districts.

After the waiver denial Jackson Court used the apartment complex as a set of luxury apartments rather than as a time-share complex. Eventually, Jackson Court lost ownership of its property at a foreclosure sale instituted by a mortgage creditor.

Jackson Court first filed suit in state court, requesting injunctive relief and claiming that Ordinance 8344, the city-wide moratorium of October 1981, was in violation of Louisiana state law, local procedural law, and the city charter. Jackson Court further claimed that its due process and equal protection rights had been violated. The relief was denied. On appeal the Circuit Court of Appeals of the State of Louisiana found the issue moot as Jackson Court had ceased to be owner of the property in question. The Supreme Court of Louisiana denied certiorari.

Jackson Court then brought a 42 U.S.C. Sec. 1983 suit in federal court. Initially New Orleans was given summary judgment on the basis of res judicata. This decision was reversed and remanded on appeal. Jackson Court Condominiums, Inc. v. City of New Orleans, 793 F.2d 1288 (5th Cir.1986) (unpublished). On remand, the district court again granted summary judgment for the City of New Orleans, finding

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that it had no jurisdiction over the case under 42 U.S.C. Sec. 1983 because Jackson Court did not state any valid claims of deprivation of constitutionally secured rights. Jackson Court Condominiums, Inc. v. City of New Orleans, 665 F.Supp. 1235 (E.D.La.1987). This decision is the subject of the appeal.

Five issues are raised: 1) Did the City of New Orleans deny Jackson Court procedural due process when passing the moratorium on time-shares or when rejecting its application for a waiver? 2) Was Jackson Court denied substantive due process in either of these actions? 3) Did these actions violate Jackson Court's right to equal protection? 4) Did Ordinance 8344, the moratorium, or 8585, creating a permanent ban, effect an unconstitutional taking of property? 5) Was Jackson Court unfairly denied a jury trial? Because we affirm the district court's summary judgment ruling on the four constitutional claims, we find the district court was correct in finding no jurisdiction and hence dismissing the case, along with some pendant state claims which we do not consider here. The jury trial issue therefore is moot. We examine the other four issues in order.

I. Procedural Due Process

  1. The Moratorium

    Jackson Court claims that it had a property right in its time-share project and that this property right was violated without procedural due process when the City Council passed the city-wide moratorium.

    This Court has held that

    If the action of the City Council is viewed as administrative/adjudicative, procedural due process rights may attach. These procedural rights follow only if the landowner establishes a property right created by state or local law. The amount of process due depends on the balancing of interests as enunciated in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).

    County Line Joint Venture v. Grand Prairie, Texas, 839 F.2d 1142, 1144 (5th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 223, 102 L.Ed.2d 214 (1988). Jackson Court argues that it had a property right which was protected by procedural due process rights. The trial court, however, granted summary judgment against Jackson Court's procedural due process claims on three grounds: 1) The passage of the moratorium was a legislative act, not an administrative act, and hence no procedural due process rights attached. 2) Jackson Court had no constitutionally protected property interest. 3) If any procedural due process was required, the post-deprivation hearing fulfilled the requirements. We need not and do not address each of these findings; the first is sufficient to affirm the district court's holding.

    The dispositive inquiry here is whether the moratorium was a legislative or administrative action. If it was administrative, Jackson Court might have been owed some level of procedural due process. However, it is well established law that once an action is characterized as legislative, procedural due process requirements do not apply. Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 445, 36 S.Ct. 141...

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