Fed. Hill Capital, LLC v. City of Providence

Citation227 A.3d 980
Decision Date27 May 2020
Docket NumberPC 16-808,No. 2018-114-Appeal.,2018-114-Appeal.
Parties FEDERAL HILL CAPITAL, LLC et al. v. CITY OF PROVIDENCE, BY AND THROUGH its Treasurer, James LOMBARDI, et al.
CourtUnited States State Supreme Court of Rhode Island

Jeffrey L. Levy, Esq., Charles D. Blackman, Esq., for Plaintiffs.

Megan Maciasz DiSanto, Esq., Lisa Dinerman, Esq., for Defendants.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

Justice Flaherty, for the Court.

Does an amendment to a zoning ordinance which restricts the number of college students who may live together in single-family homes in certain residential areas in Providence violate the constitutional rights of owners of property or of college students who rent those properties? The plaintiffs, Federal Hill Capital, LLC, a real estate investment company, and four individuals who were college students and housemates leasing Federal Hill Capital's property located on Oakdale Street in the Elmhurst neighborhood at the time this lawsuit was brought, ask this Court to answer that question in the affirmative.1 However, because we are convinced that the challenged amendment to the City of Providence's zoning ordinance does not violate the plaintiffs' right to equal protection or due process under the Rhode Island Constitution, we affirm the judgment of the Superior Court.

IFacts and Travel

In July 2015, the Providence City Council Committee on Ordinances held a public hearing to consider an amendment to the City's zoning ordinance that would regulate residences which house students. A plethora of correspondence was submitted to the City Council for its consideration on the issue. That correspondence reflected that community members were upset with the impact that student housing has had on their neighborhoods. For example, one Mt. Pleasant/Elmhurst community member wrote:

"Our neighborhood has always been a place that inspires people to put down roots and make a permanent commitment to Providence. We fear this may no longer be true. Noise, crowding, public drunkenness, traffic around the clock, parking problems, an increase in crime, threatened real estate values, absentee ownership, a transient population, lack of safety for the students themselves due to ill-maintained and out-of-code properties and unsupervised living conditions: these are all fast becoming the norm."

Another described what he termed "the recent and terrifying development of student-oriented landlords buying the single-family houses in parts of the neighborhood populated primarily by families." He explained:

"Obviously, the family-owned and occupied house is, and has always been, the heart of Elmhurst. * * * However, it has become common that when a house comes up for sale, or even before, it is snatched up by a landlord seeking to convert it into a student house, sometimes housing up to five or more students, often with a lawn turned into a parking lot."

And yet another explained that "the climate [of the neighborhood] has now changed once the owners convert one family homes to multiple dwellings." He explained that a home near his own home was "previously a one family home that has been converted to house multiple students" and that "[t]o accommodate the resident cars, a second driveway was installed" and "[t]here are regularly 8-10 cars parked at this location." That same community member also explained that, unfortunately: "On Sunday mornings I have had to pick up trash and red plastic cups in front of my house. I have had to wash urine off my driveway wall."

Approximately eight weeks after the public hearing at which these and other concerns were aired, the City enacted Ordinance No. 455, the amendment at issue in this case (Amendment).2

That Amendment impacts the R-1A and R-1 zoning districts, districts that, as represented by counsel for the City of Providence, make up less than three square miles of the City, and that are "intended for neighborhoods of lower density residential development" and "for detached single-family dwellings of low density residential developments[,]" respectively. City of Providence Zoning Ordinance §§ 4-400(A), 4-400(B) (Dec. 24, 2014). The Amendment itself states: "In the R-1A and R-1 districts, a single-family dwelling, that is non-owner occupied, shall not be occupied by more than three college students." Id. at § 12-1202(L)(5). The Amendment defines a college student as an "individual enrolled as an undergraduate or graduate student at any university or college educational institution who commutes to a campus." Id. at § 2-201.

Some five months later, in February 2016, Federal Hill Capital, LLC, the owner of a single-family home at 15 Oakdale Street in the Elmhurst neighborhood, an R-1 district, and the four plaintiff-college students who were then renting the property3 (collectively Federal Hill Capital), filed a declaratory judgment action against the City in the Superior Court seeking to invalidate the Amendment, asserting that the City had violated the Due Process and Equal Protection Clauses of the Rhode Island Constitution.

In January 2017, the City filed a motion for summary judgment. In response, Federal Hill Capital objected and filed a cross-motion for summary judgment. A justice of the Superior Court heard argument on the cross-motions and, in time, issued a comprehensive twenty-page written decision rejecting Federal Hill Capital's motion for summary judgment and granting the motion of the City of Providence. In that decision, the hearing justice determined that the appropriate level of review to adjudicate the Amendment's constitutionality was rational basis review, the least searching of all constitutional standards. Employing that standard, the hearing justice, after first remarking that the Amendment to some extent seemed "nonsensical," in the end determined that the effectiveness of the legislation was "at least debatable" and that she must therefore find it to be constitutional. Judgment entered in favor of the City, and Federal Hill Capital filed a timely appeal.

Before this Court, Federal Hill Capital asserts that the justice of the Superior Court erred in failing to apply a heightened level of review when she evaluated the constitutionality of the Amendment. Federal Hill Capital also argues that, even if the Amendment's constitutionality is properly scrutinized using rational basis review, the Amendment nonetheless fails to meet constitutional muster because it is not rationally related to a legitimate government interest.

IIDiscussion

The backdrop of this case presents us with a direct conflict between legitimate and competing interests. Longtime residents deserve quiet and peaceful neighborhoods in which to live and raise their families. On the other hand, investors are entitled to see a reasonable return on their capital and believe that, when they improve a home to make it lease-ready, they should not be punished for doing so. And, students often pursue the opportunity to further their education while residing with friends in an off-campus environment.

Recognizing these competing interests, we now delve into the issue of whether the Amendment before us violates the Equal Protection and Due Process Clauses of our state's constitution.4 In so doing, we must first emphasize that in this state—indeed, in this country—it is the legislatures, not the courts, that make the law. When a party challenges the constitutionality of a statute, the burden is on him or her to demonstrate that the enactment is unconstitutional beyond a reasonable doubt. Gem Plumbing & Heating Co., Inc. v. Rossi , 867 A.2d 796, 808 (R.I. 2005) ; cf. State v. Capone , 115 R.I. 426, 432, 347 A.2d 615, 619 (1975) ("Statutes enacted by the General Assembly are presumed to be constitutional in form and in application[.]"); State v. Lerner , 112 R.I. 62, 88, 308 A.2d 324, 340 (1973) ("[I]t is well settled that state legislatures are presumed to have acted within their constitutional powers[.]").

With these precepts in mind, and with the recognition that we review a grant of summary judgment de novo , we proceed to our legal analysis. See Narragansett Indian Tribe v. State , 110 A.3d 1160, 1162 (R.I. 2015).

ALevel of Constitutional Review

Our first task is to determine the appropriate level of scrutiny the Court should employ as we pass on the constitutionality of the challenged Amendment. See In re Advisory from the Governor , 633 A.2d 664, 669 (R.I. 1993).5 "[W]here neither a suspect class nor a fundamental right is implicated, * * * the legislation properly is analyzed under a minimal-scrutiny test." Riley v. Rhode Island Department of Environmental Management , 941 A.2d 198, 206 (R.I. 2008). Under that test, commonly known as rational basis review, when evaluating the action against the equal protection guarantee of our constitution, "this Court will review the statute to [e]nsure that ‘a rational relationship exists between the provisions of the statute [or ordinance] and a legitimate state interest.’ " Id. (quoting Cherenzia v. Lynch , 847 A.2d 818, 825 (R.I. 2004) (brackets omitted)). Similarly, in evaluating the legislative action under substantive due process, the "plaintiff must show * * * ‘that the government's action was clearly arbitrary and unreasonable[.] " Cherenzia , 847 A.2d at 826 (quoting Brunelle v. Town of South Kingstown , 700 A.2d 1075, 1084 (R.I. 1997) ). Needless to say, if a rational nexus exists between the statute and a legitimate state interest, the law is not arbitrary. Therefore, if the legislative action satisfies the Equal Protection Clause under an appropriate application of rational basis review, it will also satisfy substantive due process. See In re Advisory from the Governor , 633 A.2d at 672 ("Our holding in the first part of this opinion under our equal-protection analysis applies equally to the Governor's due-process claim."); see also Minnesota v. Clover Leaf Creamery Company , 449 U.S. 456, 470 n.12, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981) ("From...

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