Jacobs, Visconsi & Jacobs Co. v. LAWRENCE, KAN.

• Decision Date: 06 March 1989
• Docket Number: Civ. A. No. 88-2249-S.
• Citation: 715 F. Supp. 1000
• Parties: JACOBS, VISCONSI & JACOBS CO., Richard A. Armstrong and Betty J. Grisham, Plaintiffs, v. CITY OF LAWRENCE, KANSAS, Robert J. Schumm, Michael Amyx, Dennis D. Constance, Sandra K. Praeger, Thomas M. Rundle, Lawrence-Douglas County Metropolitan Planning Commission, and Does 1 Through 100, Defendants.
• Court: U.S. District Court — District of Kansas

715 F. Supp. 1000

JACOBS, VISCONSI & JACOBS CO., Richard A. Armstrong and Betty J. Grisham, Plaintiffs, v. CITY OF LAWRENCE, KANSAS, Robert J. Schumm, Michael Amyx, Dennis D. Constance, Sandra K. Praeger, Thomas M. Rundle, Lawrence-Douglas County Metropolitan Planning Commission, and Does 1 Through 100, Defendants.

Civ. A. No. 88-2249-S.

United States District Court, D. Kansas.

March 6, 1989.

Neil R. Shortlidge, Freilich, Leitner, Carlisle and Shortlidge, Kansas City, Mo., John A. Emerson, Barber, Emerson, Springer, Zinn and Murray, Lawrence, Kan., for plaintiffs.

Richard F. Babcock/Barbara Baran, Ross & Hardies, Chicago, Ill., Gerald L. Cooley, Allen, Cooley & Allen, Lawrence, Kan., for defendants except Does 1-100.

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on defendants' motion to dismiss each and all counts of plaintiffs' complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. In the alternative, defendants move the court to strike the complaint. Also, defendants move the court to abstain from exercising jurisdiction. Plaintiffs Richard A. Armstrong and Betty J. Grisham are property owners in the City of Lawrence, Kansas. Plaintiff Jacobs, Visconsi & Jacobs Company ("JVJ") holds an option on these properties. This lawsuit arises out of the Lawrence city commission's denial of plaintiffs' rezoning application on April 12, 1988. Plaintiffs sought to have their properties zoned a commercial designation to allow development of a suburban shopping mall.

In considering defendants' motion to dismiss, the court will accept the facts as set out in plaintiffs' extensive complaint. Plaintiffs Armstrong and Grisham are owners of 61.41 acres of real property located in Lawrence, Kansas. The property is located on the southern edge of the city. Plaintiff JVJ is an optionholder on this property. JVJ wished to develop a suburban shopping mall on the property. In 1979, plaintiffs filed an application with the city to rezone the property from RS-1 (residential) and FP (flood plain) districts to C-4 district (general commercial). After review, the city's planning commission recommended the application be denied. Later in 1981, the city commission adopted the planning commission's recommendations and denied this application. In 1986, the portion of the properties zoned FP was rezoned to a district RS-1.

On December 16, 1981, the comprehensive downtown plan was approved by the planning commission. The planning commission purported to make the comprehensive downtown plan an official amendment to Plan '95, the city's comprehensive development plan, on December 15, 1982. The stated policy of the comprehensive downtown plan is to eliminate or substantially reduce competition for downtown business interest. The downtown plan intended to reinforce the policies of Plan '95, which supported the central business district (downtown) as the only retail center in Lawrence.

From October, 1984 through March, 1987, plaintiff JVJ was involved in a joint venture with Town Center Venture Corporation to develop a downtown shopping mall. On April 7, 1987, an advisory election was held by the city in which the voters of Lawrence rejected the downtown mall concept.

On May 19, 1987, the city commission appointed a Downtown Improvement Committee ("DIC") consisting of representatives from different organizations and at-large members. Among the persons appointed by the city commission to serve on the DIC were Commissioner Dennis Constance and two members of the planning commission. The purpose of the DIC was to provide assistance and advice to the city commission on downtown development issues.

On July 13, 1987, JVJ filed another application to rezone the Armstrong and Grisham property from an RS-1 district to a C-4 district to accommodate a suburban shopping mall. This application led to the present litigation. Also, on the same date, another developer, Warmack & Company, filed an application to rezone a 152-acre site located in Douglas County, just south of the City of Lawrence, to develop a shopping mall. Also, at that time, another application was pending before the city to rezone certain land to allow for shopping mall development (the Collister application). On August 8, 1987, the DIC reached a consensus that the three suburban mall rezoning proposals threatened the downtown's role as the city's retail core and that the solution to the problem was to pursue a large-scale retail development downtown.

In the fall of 1987, the planning commission held extensive public hearings on the three suburban mall zoning applications. On December 16, 1987, the planning commission began deliberations on the three suburban mall rezoning applications.

On February 2, 1988, the DIC presented its final report to the city commission. The DIC perceived a suburban shopping center to be a competitive threat to the downtown business interest. On February 9, 1988, the city commission voted four to one to spend $47,450 to hire consultants to help the DIC's project of obtaining downtown development.

At a meeting on February 22, 1988, the planning commission reviewed the findings of fact prepared by the planning staff and voted unanimously to recommend denial of the Collister application. Following this vote, the planning commission began to review findings of fact prepared by the planning staff on the JVJ application. On March 21, 1988, the planning commission voted unanimously to recommend denial of the JVJ application and made its findings of fact. One planning commissioner stated that the threat to the existing downtown retail district was an overriding factor in the recommendation.

Under a cover letter dated April 6, 1988, attorneys for JVJ filed a request for disqualification, suggesting that one or more members of the city commission should disqualify themselves from participating in hearings, deliberations, and the decision of the JVJ rezoning application, for reasons of bias or prejudice. Commissioner Schumm is the proprietor of four businesses located in downtown Lawrence. Commissioner Amyx is the owner of real estate located in downtown Lawrence and is the proprietor of a business, Amyx Barber Shop, located in downtown Lawrence. Also, Commissioner Constance was an active member of the DIC, which pursued the interest of downtown development.

On April 12, 1988, the city commission met and considered the JVJ application. All commissioners indicated that they would not disqualify themselves. The findings of the planning commission, and evidence used by the planning commission in making these findings, were presented to the city commission. The city commission voted unanimously to accept the planning commission's recommendation to deny the rezoning application and adopted the planning commission's findings of fact. This denial of the rezoning application precluded plaintiffs' attempts for commercial development on their land. On May 10, 1988, plaintiffs filed this suit in federal court.

In the present suit, plaintiffs plead a five-count complaint. The first four counts are actions under 42 U.S.C. § 1983, alleging deprivations of constitutional rights. In count I, plaintiffs allege the deprivation of procedural due process. Plaintiffs contend that the city commissioners prejudged the merits of JVJ's rezoning application and because of their prejudice, they were incapable of sitting as impartial decision-makers at the quasi-judicial rezoning hearing. In count II, plaintiffs allege deprivation of equal protection of the laws. Plaintiffs contend that the city had a policy of restricting development to downtown projects to eliminate competition for downtown businesses. Plaintiffs contend this policy discriminated against competitors seeking to locate outside the downtown area. In count III, plaintiffs allege deprivation of substantive due process. Plaintiffs contend that the findings of fact made by the planning commission and adopted by the city commission were not supported by substantial evidence. Therefore, plaintiffs allege the denial of JVJ's rezoning application was arbitrary, capricious and unreasonable. In count IV, plaintiffs allege that defendants' actions amounted to a taking of their property without due process. Finally, the fifth count of plaintiffs' complaint alleges a violation of federal antitrust law. Plaintiffs contend that defendants engaged in a conspiracy to prevent plaintiffs from developing a suburban mall. Plaintiffs allege that defendants took this action to prevent competition with downtown businesses. Defendants move to dismiss each of these counts for various reasons. The court will proceed and deal with each count individually.

The court may not dismiss a cause of action for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the theory of recovery that would entitle him to relief. Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976); Mangels v. Pena, 789 F.2d 836, 837 (10th Cir.1986). "All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true." Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir.1984). The court must view all reasonable inferences in favor of the plaintiff and the pleadings must be liberally construed. Id. The issue in reviewing the sufficiency of a complaint is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

A. Procedural Due Process Claim.

Defendants argue that plaintiffs failed to state a claim for deprivation of procedural due process, because plaintiffs have failed to show the existence of any constitutionally protected property interest. Defendants argue that plaintiffs have no such interest in either the requested commercial zoning...