Esplanade Properties, LLC v. City of Seattle

• Decision Date: 03 October 2002
• Docket Number: No. 01-36112.,01-36112.
• Citation: 307 F.3d 978
• Parties: ESPLANADE PROPERTIES, LLC, a Washington limited liability company, Plaintiff-Appellant, v. CITY OF SEATTLE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 978

307 F.3d 978

ESPLANADE PROPERTIES, LLC, a Washington limited liability company, Plaintiff-Appellant, v. CITY OF SEATTLE, Defendant-Appellee.

No. 01-36112.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 11, 2002.

Filed October 3, 2002.

Larry Smith, Graham & Dunn, Seattle, WA, for the plaintiff-appellant.

Judith Barbour, Office of the City Attorney, Seattle, WA, for the defendant-appellee.

Appeal from the United States District Court for the Western District of Washington; Barbara J. Rothstein, District Judge, Presiding. D.C. No. CV-00-01512-BJR.

Before: B. FLETCHER and GOULD, Circuit Judges, and MURGUIA,¹ District Judge.

BETTY B. FLETCHER, Circuit Judge.

Plaintiff Esplanade Properties, LLC ("Esplanade") challenges the legality of the City of Seattle's ("the City's") denial of its application to develop shoreline property on Elliot Bay in Seattle, Washington. Esplanade contends that the City's action resulted in a complete deprivation of economic use of its property, constituting an inverse condemnation in violation of federal and state constitutional law, and violating both federal and state substantive due process. Specifically, plaintiff appeals three decisions of the district court which, in toto, resulted in the dismissal of its claims against the defendant, to wit, granting summary judgment to the defendant on plaintiff's takings claim, granting summary judgment to the defendant on plaintiff's federal substantive due process claim, and dismissing plaintiff's state substantive due process claim. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.

I. BACKGROUND

In 1992, Esplanade began a long, and ultimately unsuccessful, process of attempting to secure permission to construct single-family residential housing on and over tidelands located below Magnolia bluff, near both a large city park and a large marina. The property is classified as first class tide-land, and is submerged completely for roughly half of the day, during which time it resembles a large sand bar.

Esplanade purchased the property for $40,000 in 1991, and quickly retained a development team to design and secure permits for nine waterfront homes, each to be constructed on platforms supported by pilings. In June of 1992, Esplanade applied for building permits, as well as various use permits, variance permits, and special use permits. None of these applications were ever approved.²

After reviewing Esplanade's permit applications, the City's Department of Construction and Land Use ("DCLU") identified three significant code compliance issues related to the proposed project: (1) the size of the proposed piers and docks, (2) the design of the causeway access to the houses, and (3) lack of parking on dry land. The City notified Esplanade of its concerns in a Correction Notice. Esplanade responded to the City's concerns, and sought three formal code interpretations from the DCLU, each relating to the issues raised by the City. Central to the ongoing dispute, the City was asked, inter alia, to interpret the code with respect to parking.³ According to the City's interpretation, parking built over water in a single-family zone was prohibited, despite the general requirement that single-family homes be constructed with on-site parking. Esplanade appealed this interpretation, which was eventually affirmed by the Washington Court of Appeals on the ground that residential housing was not a water-dependent or water-related use.

At the end of the appeals process, in November of 1997, Esplanade was informed by the City that it had 60 days to submit formal alterations to its proposed plan, in light of the DCLU's code interpretations, without which the application would be cancelled.⁴ Esplanade, instead of altering its parking proposal, simply applied for a variance. Because Esplanade failed to modify its plans with respect to each of the three design concerns raised by the City, on April 13, 1998, the City cancelled Esplanade's application,⁵ and later refused to reconsider its unappealable decision.

On June 5, 2000, Esplanade served a letter on the City threatening to make an inverse condemnation claim as a result of the cancellation of its application. Without a response from the City, Esplanade made good on its threat and filed the current action against the City on August 22, 2000.

In its complaint, Esplanade alleges, (1) "inverse condemnation [] in violation of the federal and state constitutional provisions prohibiting the taking of private property without just compensation," and (2) "violat[ion][of] plaintiff's right to substantive due process, in violation of the state and federal constitutions." Plaintiff seeks "monetary damages" under 42 U.S.C. § 1983 and RCW 64.40.020.

The district court granted the defendant's motion for partial summary judgment, dismissing Esplanade's federal substantive due process claim based upon our holding in Armendariz v. Penman, 75 F.3d 1311 (9th Cir.1996), that federal substantive due process claims are precluded where the alleged violation is addressed by explicit textual provisions of the Constitution, specifically, the Fifth Amendment's "Takings Clause."

The district court, in its Order, did not resolve Esplanade's state substantive due process claim, but requested further briefing from the parties on the question whether the matter should be certified for review by the Washington Supreme Court.

Having received supplemental briefing from the parties, the district court dismissed Esplanade's state substantive due process claim on the ground that Washington state courts had authoritatively held that the Washington Constitution provides no greater substantive due process protection than that afforded by the United States Constitution.

Subsequently, the district court granted the defendant's motion for summary judgment on Esplanade's remaining claim, to wit, the City's alleged taking of its property without just compensation, in violation of the Fifth Amendment. The court held that because Esplanade failed to establish that the City's action was the "proximate cause" of its alleged damages, and alternatively, because the "background principles" of Washington state law would have precluded the development, under Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), the City was not liable to Esplanade.

Esplanade appealed, challenging each of the district court's three decisions.

II. STANDARD OF REVIEW

We review de novo the district court's grant of summary judgment. Panatronic USA v. AT & T Corp., 287 F.3d 840, 843 (9th Cir.2002).

III. DISCUSSION

We turn first to Esplanade's federal and state substantive due process claims.

A. Federal Substantive Due Process

The Fourteenth Amendment's due process clause provides that no state shall "deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. In Armendariz, 75 F.3d at 1318, we rejected a substantive due process claim brought by plaintiffs (owners of low-income housing in San Bernardino) who alleged, inter alia, that the City violated their rights by conducting police sweeps resulting in numerous closures of property owned by the plaintiffs. We held that "plaintiffs' substantive due process claim fails because it is preempted by other constitutional claims under the rule of Graham v. Connor, 490 U.S. 386, 109 S.Ct. 1865, 104 L.Ed.2d 443 (1989)."⁶ Id. Because the "Takings Clause `provides an explicit textual source of constitutional protection' against `private takings,' the Fifth Amendment (as incorporated by the Fourteenth), `not the more generalized notion of "substantive due process," must be the guide' in reviewing the plaintiffs' claim of a `private taking.'" Armendariz, 75 F.3d at 1324 (quoting Graham, 490 U.S. at 395, 109 S.Ct. 1865).

Esplanade's contention that Armendariz is no longer controlling after the Supreme Court's decision in Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998), is unpersuasive. In that case, a majority of the Court held that the Coal Industry Retiree Health and Benefit Act ("Coal Act"), 26 U.S.C. §§ 9701-9722 (1994 ed. and Supp. II), which established a mechanism for providing health benefits to coal industry retirees and their dependents, was unconstitutional. The plaintiff asserted that the Coal Act violated its substantive due process rights and constituted a taking of property in violation of the Fifth Amendment. Eastern Enters., 524 U.S. at 517, 118 S.Ct. 2131. Justice O'Connor, writing for four Justices, held that the Coal Act violated the Takings Clause, but explicitly declined to address "Eastern's due process claim." Id. at 538, 118 S.Ct. 2131. Justice Kennedy, concurring in the judgment, found that the statute should be invalidated based solely upon "essential due process principles, without regard to the Takings Clause of the Fifth Amendment." Id. at 539, 118 S.Ct. 2131. The remaining Justices found that neither the Takings Clause nor substantive due process was violated by the Coal Act, and none of those Justices analyzed the question under both the Takings Clause and the Fourteenth Amendment.

Eastern Enterprises did nothing to overturn the relevant holding in Armendariz. First, of the five Justices constituting the majority, only Justice Kennedy, in concurrence, addressed the due process claim, and he addressed it to the exclusion of the takings claim. The four Justices in dissent decided that the plaintiff had neither a takings claim nor a substantive due process claim. For that reason alone there exists no conflict between the reasoning of the Court in Eastern Enterprises and our holding in Armendariz. Second, it is beyond cavil that, in our cases decided subsequent to Eastern Enterprises, Armendariz is treated as controlling precedent. See, e.g., Weinberg v. Whatcom County, 241 F.3d 746, 749 n. 1 (9th Cir.2001) (dismissing substantive due...