Heritage Farms, Inc. v. Solebury Tp.

• Decision Date: 10 February 1982
• Docket Number: No. 81-1234,81-1234
• Citation: 671 F.2d 743
• Parties: HERITAGE FARMS, INC., Heritage Farm Partnership, Concept Plus, Inc., and Michael G. Lamelza, Appellants, v. SOLEBURY TOWNSHIP, Solebury Township Board of Supervisors, J. Walter Livezey, Jr., Frank J. Soriero, Jr., Patricia D. Knight, Individually and in Their Respective Official Capacities as Members of the Solebury Township Board of Supervisors, Carl L. Lindsay, Jr., Individually and In His Official Capacity as Solicitor of Solebury Township, and William E. Moon, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 743

671 F.2d 743

HERITAGE FARMS, INC., Heritage Farm Partnership, Concept Plus, Inc., and Michael G. Lamelza, Appellants, v. SOLEBURY TOWNSHIP, Solebury Township Board of Supervisors J. Walter Livezey, Jr., Frank J. Soriero, Jr., Patricia D Knight, Individually and in Their Respective Official Capacities as Members of the Solebury Township Board of Supervisors, Carl L. Lindsay, Jr., Individually and In His Official Capacity as Solicitor of Solebury Township, and William E. Moon, Appellees.

No. 81-1234.

United States Court of Appeals Third Circuit.

Argued Nov. 19, 1981.

Decided Feb. 10, 1982.

Steven L. Friedman (argued), Louis B. Kupperman, Thomas J. Elliott, Philadelphia, Pa., for appellants.

Franklin Poul (argued), Brian P. Flaherty, Stephen B. Harris, Edward J. Marcantonio, Philadelphia, Pa., for appellees.

Before GIBBONS and HIGGINBOTHAM, Circuit Judges, and MEANOR, District Judge. ^*

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

I.

In this case, we are asked to examine the doctrine of abstention in a rather novel factual setting. For the reasons set forth below, we hold that the district court's decision to abstain was error and therefore the judgment of the district court must be reversed.

The appellants, plaintiffs below, are in the business of purchasing land and developing it into residential housing units in Solebury Township, Bucks County, Pennsylvania. The defendants include Solebury Township, its Board of Supervisors, past and present members of the Board, and the Township Solicitor. The plaintiffs brought suit on June 23, 1980 seeking declaratory and injunctive relief as well as damages for alleged violations of their constitutional rights under the Civil Rights Act of 1871, 42 U.S.C. § 1983 (1976). ¹ Because a dismissal (without retention of jurisdiction) on abstention grounds is in the nature of a dismissal under Fed.R.Civ.P. 12(b)(6), Insurance Federation of Pennsylvania, Inc. v. Supreme Court of Pennsylvania, 669 F.2d 112 at 113 (3d Cir. 1982), for purposes of this appeal we must accept as true the allegations contained in the plaintiffs' complaint.

The complaint alleges that the various defendants conspired to use their offices to cripple and destroy the plaintiffs' business. Their course of conduct, spanning almost three years, was aimed at preventing the plaintiffs from carrying out plans for various residential developments. The attack was waged on various fronts. The defendants unlawfully denied the necessary governmental approval for certain development projects. Building permits were denied despite the knowledge that the denial of the permits was unlawful under Township ordinances. Escrow monies were not released for work completed. Certificates of occupancy were refused for completed and approved developments. The complaint alleges with great specificity a number of "illegal, aribtrary, unreasonable, confiscatory, (and) discriminatory" acts on the part of the defendants "to frustrate, hinder, obstruct, delay and prevent development of plaintiffs' properties solely for the purpose of inflicting economic harm upon plaintiffs under the color of law." Plaintiffs' Complaint, P 38, 39(i). Individual defendants articulated a personal dislike for plaintiff Lamelza and stated their intent to "bankrupt" him and "put him out of business." In addition, defendant Boas attempted to block one of plaintiffs' commercial ventures in order to prevent competition with his own nearby retail store. As both a member of the Board of Supervisors and Police Commissioner, Boas ordered illegal, repetitive and harassing inspections of the plaintiffs' projects. Various defendants intentionally made false statements to financial institutions in an attempt to persuade them not to finance plaintiffs' projects. In addition to running the plaintiffs' credit rating, defendants mounted an adverse publicity campaign against plaintiffs using false and defamatory statements to curtail the plaintiffs' ability to sell their homes. As a result of the defendants' efforts, the plaintiffs suffered severe financial losses as projects were delayed and aborted. In addition, the plaintiffs have suffered injury to their reputation in the business and financial worlds, as well as in the eyes of the community as a whole.

All parties agree that the complaint states on its face a claim under § 1983, and that the district court had jurisdiction over the case. Nevertheless, the defendants asked the district court to abstain and dismiss the complaint. The district court granted the motion, relying upon the doctrines articulated in Railroad Comm'n of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941) and Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). The plaintiffs appealed. We must consider whether it was error for the district court to have abstained where there does not exist an unsettled question of state law and where important state policies are not threatened by a decision by a federal court.

II.

Abstention is a judicially created doctrine under which a federal court will decline to exercise its jurisdiction so that a state court or state agency will have the opportunity to decide the matters at issue. The doctrine was born out of a concern for the maintenance of our federal system; seeking to avoid unnecessary conflicts between the federal judiciary and state government. See Railroad Comm'n of Texas v. Pullman Co., 312 U.S. 496, 500-501, 61 S.Ct. 643, 645, 85 L.Ed. 971 (1941). However, the Supreme Court has recognized that abstention is an "extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the state court would clearly serve an important countervailing interest." County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-89, 79 S.Ct. 1060, 1062-63, 3 L.Ed.2d 1163 (1959). Consistent with its perception of abstention as the exception rather than the rule, the Supreme Court has recognized only three situations in which abstention is appropriate. See Colorado River Water Conservation District v. United States, 424 U.S. 800, 814, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976).

One of the three basic types of abstention has its roots in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). The Younger doctrine requires a district court to abstain where, absent bad faith, harassment, or a patently invalid state statute, the moving party is attempting to enjoin pending state criminal proceedings. 401 U.S. at 54, 91 S.Ct. at 755. Younger abstention has also been held to be appropriate in certain narrow quasi-criminal or non-criminal settings. See Huffman v. Pursue, 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975) (nuisance); Juidice v. Vail, 430 U.S. 327, 97 S.Ct. 1211, 51 L.Ed.2d 376 (1977) (civil contempt); Trainor v. Hernandez, 431 U.S. 434, 97 S.Ct. 1911, 52 L.Ed.2d 486 (1977) (state attempt to recover fraudulently obtained welfare benefits); Moore v. Sims, 442 U.S. 415, 99 S.Ct. 2371, 60 L.Ed.2d 994 (1979) (state seeking custody of children).

The second type of abstention, Pullman abstention, may be invoked where there is an unsettled question of state law, the resolution of which would affect the decision of a federal constitutional issue, either by obviating the need to decide it or by changing the light in which it must be viewed. See Railroad Comm'n of Texas v. Pullman Co., 312 U.S. 496, 501, 61 S.Ct. 643, 645, 85 L.Ed. 971 (1941).

The final category-Burford abstention-derives its name from Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). Burford abstention is appropriate where a difficult question of state law is presented which involves important state policies or administrative concerns. 319 U.S. at 332-34, 63 S.Ct. at 1106-07. In this situation, a federal court may abstain to avoid disrupting the efforts of a state "to establish a coherent policy with respect to a matter of substantial public concern." Colorado River Water Conservation District v. United States, 424 U.S. 800, 814, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976).

III.

The district court did not rely upon Younger abstention, and it clearly has no applicablity to this case. The plaintiffs are not attempting to enjoin a pending state proceeding, either criminal or quasi-criminal, nor is there a pending state proceeding involving the precise claims or issues before us in this case. ²

A.

The district court did, however, find Pullman abstention applicable to the present case, explaining: "this dispute can be disposed of by a state court applying state law, thus avoiding a determination by this court of federal constitutional issues." Heritage Farms, Inc. v. Solebury Township, 507 F.Supp. 33, 35 (E.D.Pa.1980). Although the district court's observation tracked part of the Pullman test, the mere presence of a "potentially dispositive question of state law," 507 F.Supp. at 35, has never been a sufficient basis in itself for declining federal jurisdiction under Pullman. The doctrine requires that the question of state law be unsettled. See, e.g., Reetz v. Bozanich, 397 U.S. 82, 86, 90 S.Ct. 788, 790, 25 L.Ed.2d 68 (1970); Hill v. City of El Paso, 437 F.2d 352, 356 (5th Cir. 1971).

Neither the district court nor the defendants have pointed to the unsettled question or questions of state law presented by this case. As far as we can discern, there are none. Of course, state law will be involved in this suit, but Pullman abstention is certainly not designed to prevent a federal court from applying state law altogether. As one commentator observed: "Federal and state courts are equally capable of applying settled state law to a difficult set of facts." Note, Land Use Regulation, the Federal Courts and the Abstention Doctrine,...