PFZ Properties, Inc. v. Rodriguez

• Decision Date: 16 November 1990
• Docket Number: No. 90-1723,90-1723
• Citation: 928 F.2d 28
• Parties: PFZ PROPERTIES, INC., Plaintiff, Appellant, v. Rene Alberto RODRIGUEZ, etc., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 28

928 F.2d 28

PFZ PROPERTIES, INC., Plaintiff, Appellant, v. Rene Alberto RODRIGUEZ, etc., et al., Defendants, Appellees.

No. 90-1723.

United States Court of Appeals, First Circuit.

Heard Nov. 16, 1990.

Decided March 18, 1991.

On Petition for Rehearing April 23, 1991.

Thomas Richichi with whom Kathryn E. Szmuszkovicz, Deborah K. Gunn, Beveridge & Diamond, P.C., Washington, D.C., and Jose Luis Novas-Dueno, Hato Rey, P.R., were on brief, for plaintiff, appellant.

Vannessa Ramirez, Asst. Sol. Gen., Dept. of Justice, with whom Jorge E. Perez Diaz, Sol. Gen., was on brief, for defendants, appellees.

Before CAMPBELL and CYR, Circuit Judges, and FUSTE, ^* District Judge.

LEVIN H. CAMPBELL, Circuit Judge.

This case arose out of a dispute over the development of a residential and tourist project in an area known as Vacia Talega in Loiza, Puerto Rico. Plaintiff-appellant PFZ Properties ("PFZ") filed a complaint under 42 U.S.C. Sec. 1983, alleging that defendants Rene Alberto Rodriguez, Salvador Arana, and the Regulations and Permits Authority of the Commonwealth of Puerto Rico ("ARPE") had violated its constitutional rights to procedural and substantive due process and equal protection guaranteed by the Fourteenth Amendment to the United States Constitution. The district court dismissed the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim. 739 F.Supp. 67 (D.Puerto Rico 1990). PFZ filed a timely appeal. Because we agree with the district court that PFZ's complaint does not state a valid claim under Sec. 1983, we affirm the dismissal.

I.

As this appeal follows the dismissal of the complaint under Rule 12(b)(6), we accept the factual averments of the complaint as true, and construe these facts in the light most favorable to the plaintiff's case. ¹ Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

PFZ owns 1,358.65 cuerdas of land in Loiza, Puerto Rico in an area known as Vacia Talega and Pinones. In May, 1976, the Planning Board of Puerto Rico adopted a resolution approving a Preliminary Development Plan submitted by PFZ for portions of this parcel. According to the approved Plan, development was to proceed in two phases, the first section to include constructing 2,000 hotel rooms and 2,000 residential units on 106 cuerdas, the second to include 6,600 hotel rooms and 6,135 residential units on 266.41 cuerdas. From the beginning, matters did not go smoothly for PFZ. On June 14, 1976, the residents of Barrio Torrecilla Baja, Loiza, Puerto Rico, filed a petition in the Superior Court of Puerto Rico requesting reconsideration of the Planning Board's resolution approving the Preliminary Development Plan and alleging that the Board had failed to consider adequately the development's impact on the environment and the residents of the area. The Superior Court affirmed the Board's resolution in September, 1977, and the Supreme Court of Puerto Rico denied review in January, 1978.

On August 19, 1977, the Planning Board extended the time during which PFZ was required to submit preliminary plans to ARPE for the development of Block 1 of the first section until one year after the Superior Court's decision became final, assuming that decision were in PFZ's favor. On August 24, 1978, PFZ submitted preliminary plans for the development of the entire first section to ARPE. In February, 1981, nearly three years later, the plans were approved by ARPE. By this time, the project had been scaled down somewhat--the first section was to include approximately 500 hotel rooms, 1,952 residential apartment units, and 1,104 condo-hotel apartment units on 79.93 cuerdas.

On February 22, 1982, PFZ submitted construction drawings for site improvements for the subdivision works of Block 1 of the first section and preliminary project plans for the structures to be constructed on Block 2 of the first section. On March 24, ARPE returned the preliminary project plans to PFZ, stating that submission of the plans was premature and that, according to the 1981 ARPE Resolution, construction drawings for site improvements must be processed first. ARPE also explained that it had sent the site improvement drawings for Block 1 to its regional office in Carolina, Puerto Rico. There was apparently no communication between PFZ and ARPE for four years. PFZ inquired by letter about the status of the plans in January, 1986; however, ARPE did not answer the letter.

ARPE invited PFZ to attend a meeting in September, 1986 to give a presentation on the project to various agencies of the Commonwealth. During that meeting, the project was discussed, but neither the validity of the 1976 and 1981 Resolutions nor the sufficiency or timeliness of the filings was questioned.

In November, 1987, the PFZ engineers resubmitted the preliminary project plans to ARPE. The next month, Jack Katz, a PFZ officer, attended a meeting with Mr. Amadeo Francis, Special Advisor to the Governor, to discuss the project. On December 28, 1987, PFZ filed its original complaint in the United States District Court for the District of Puerto Rico, alleging that ARPE's continued refusal to process the drawings and issue the permits constituted a violation of PFZ's right to due process and amounted to a taking without just compensation under the United States Constitution. ² Defendants filed an answer to the complaint and a motion to dismiss.

On August 2, 1988, ARPE informed PFZ by letter that the 1976 Planning Board Resolution and the 1981 ARPE Resolution were no longer in effect. PFZ requested reconsideration of the decision. ARPE denied the request. PFZ also petitioned for review of ARPE's decision in Superior Court. This petition, along with its petition for certiorari to the Supreme Court of Puerto Rico, were denied. PFZ filed its Amended Complaint in federal district court on October 11, 1988, alleging that ARPE's failure and continued refusal to process the construction drawings have deprived PFZ of its rights to procedural and substantive due process under the Fourteenth Amendment to the United States Constitution. PFZ also alleged that the treatment afforded its project differed substantially from the treatment of others similarly situated, thereby violating PFZ's right to equal protection under the Fourteenth Amendment.

The district court held that the post-deprivation process afforded to PFZ under Puerto Rico law was constitutionally adequate. It also held that, given the absence of any allegations of racial animus, political discrimination, or fundamental procedural irregularity, PFZ had failed to state a claim for violation of its rights to due process or equal protection under the Fourteenth Amendment. The district court therefore dismissed the complaint.

II.

A. Procedural Due Process

In order to establish a procedural due process claim under Sec. 1983, PFZ must allege first that it has a property interest as defined by state law and, second, that the defendants, acting under color of state law, deprived it of that property interest without constitutionally adequate process. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 428, 102 S.Ct. 1148, 1153, 71 L.Ed.2d 265 (1982). With respect to the first requirement, PFZ argues that, once the Planning Board gave its approval of PFZ's project in 1976 and once ARPE adopted a resolution approving the project in February, 1981, PFZ had acquired a legitimate claim of entitlement to approval of the construction drawings and to issuance of a building permit. Although we think it far from clear that PFZ's expectation of receiving a construction permit from ARPE constituted a property interest under Puerto Rico law, we may assume, arguendo, that the facts alleged in the complaint are sufficient to establish such an interest.

Assuming that PFZ had a property interest in obtaining the construction permit, it was deprived of that interest when ARPE refused to process the construction drawings. This deprivation was "under color of state law" for the purposes of Sec. 1983. We turn, therefore, to the adequacy of the process afforded PFZ. Under Puerto Rico law, PFZ was entitled to request reconsideration of the decision by ARPE and, if reconsideration was denied, to file a petition for review of ARPE's action in the Superior Court of Puerto Rico. ³ PFZ now argues that this post-deprivation remedy was inadequate--that PFZ was entitled to an administrative hearing before the denial by ARPE. We disagree.

PFZ does not contend that the project approval procedures established by Puerto Rico law and by ARPE's custom and practice violate the Due Process Clause of the federal Constitution. Rather, it alleges that ARPE illegally departed from Puerto Rico's prescribed procedures by failing to process the construction drawings. When a deprivation of property results from conduct of state officials violative of state law, the Supreme Court has held that failure to provide pre-deprivation process does not violate the Due Process Clause. See Parratt v. Taylor, 451 U.S. 527, 543, 101 S.Ct. 1908, 1916, 68 L.Ed.2d 420 (1980). Indeed, it makes little sense to argue that ARPE had to afford the plaintiff a hearing before it illegally departed from its own procedures by refusing to process the construction drawings. The state is not required to anticipate such violations of its own constitutionally adequate procedures. To hold otherwise would convert every departure from established administrative procedures into a violation of the Fourteenth Amendment, cognizable under Sec. 1983. See Creative Environments v. Estabrook, 680 F.2d 822, 832 n. 9 (stating that "where a state has provided reasonable remedies to rectify a legal error by a local administrative body ... due process has been provided"), cert. denied, 459 U.S. 989, 103 S.Ct. 345, 74 L.Ed.2d 385 (1982).

As, therefore, a pre-deprivation hearing was not required to meet the demands of the Due Process Clause, the only question is whether the...