Lakeside Community Hospital v. Tahoe Regional Planning Agency

• Decision Date: 12 December 1978
• Docket Number: Civ. No. 78-0098 BRT.
• Citation: 461 F. Supp. 1150
• Parties: LAKESIDE COMMUNITY HOSPITAL, a nonprofit corporation, and Careage Corporation, a Washington Corporation, Plaintiffs, v. TAHOE REGIONAL PLANNING AGENCY, and Joe Bensinger, Jim Henry, Thomas Stewart, Norman Woods, Ken Kjer, Jean Stoess, Thomas Cooke, Ken Woodward, John Meder, Bill Morgan, members of the Governing Board, and Jim Jordan, Executive Director, Defendants.
• Court: U.S. District Court — District of Nevada

461 F. Supp. 1150

LAKESIDE COMMUNITY HOSPITAL, a nonprofit corporation, and Careage Corporation, a Washington Corporation, Plaintiffs, v. TAHOE REGIONAL PLANNING AGENCY, and Joe Bensinger, Jim Henry, Thomas Stewart, Norman Woods, Ken Kjer, Jean Stoess, Thomas Cooke, Ken Woodward, John Meder, Bill Morgan, members of the Governing Board, and Jim Jordan, Executive Director, Defendants.

Civ. No. 78-0098 BRT.

United States District Court, D. Nevada.

December 12, 1978.

COPYRIGHT MATERIAL OMITTED

Lyle & Robb, Robert E. Lyle, Reno, Nev., for plaintiffs.

Owen & Ralston, Gary A. Owen, Zephyr Cove, Nev., for defendants.

ORDER

BRUCE R. THOMPSON, District Judge.

This case raises new questions regarding the role the federal courts are to play in reviewing Tahoe Regional Planning Agency (TRPA) action.¹ The plaintiffs, Lakeside Community Hospital and Careage Corporation, are private parties who wish to construct and operate a thirty-bed hospital at Incline Village, Nevada. They have sought and received approval for the project from the Nevada Comprehensive Health Planning Agency, as well as from the Washoe County Commission, to whom application was made for an administrative permit and for a rezoning of the property from an industrial to a commercial use classification. After conducting two public hearings, the Governing Board of the TRPA failed to approve the project, with the Nevada delegation voting against and the California delegation splitting 2-2 on the motion to approve. A motion to deny the project without prejudice, pending completion by the TRPA of its Non-Attainment Air Quality and General Up-Date Plans, was made and carried a dual majority. Those plans, aimed at meeting federal air quality standards in the Tahoe Basin and revising the existing regional plan, are slated for completion in January, 1979.

The complaint seeks damages from the TRPA, its executive director and the ten members of its Governing Board, as well as a declaration that the Board failed to take "final action" on the plaintiffs' application within 60 days of its submission, rendering the project "deemed approved" under Article VI(k) of the Compact, Cal.Gov't Code §§ 66800 et seq. (West Supp.1978), Nev. Rev.Stat. 277.190 et seq.² Four separate claims for relief are alleged. The first proceeds from the premise that a denial without prejudice constitutes a failure to take "final" action under Article VI(k), and charges the TRPA with exceeding its statutory authority in deeming such action final. The second alleges that the TRPA departed from its Rules of Practice and Procedure by failing to base its denial on substantial evidence that the project would run afoul of existing ordinances and plans, as assertedly is required by sections 7.10 and 8.3 of the agency's Rules.³ The third and fourth claims are constitutional in nature, alleging a denial of due process and equal protection in that several of the Board members entertained an impermissible bias against plaintiffs, and further, that the denial was so lacking in evidentiary support as to render the action arbitrary and capricious. The defendants have filed motions alternatively to dismiss, to abstain, for a more definite statement or to strike.

At the outset it should be emphasized that this Court is duty bound to follow the law as articulated by the Court of Appeals for this Circuit. See, e. g., Jorgenson v. Swope, 114 F.2d 988, 989 (9th Cir. 1940). That a writ of certiorari has issued from the United States Supreme Court to the Court of Appeals does not relieve this Court of that duty. Derby v. Univ. of Wis., 54 F.R.D. 599 (E.D.Wis.1972), aff'd mem., 489 F.2d 757 (7th Cir. 1973); In re Simon Weltman & Co., 2 F.2d 759 (S.D.N.Y.1924) (per Learned Hand, J.). Inasmuch as Jacobson v. TRPA, 566 F.2d 1353 (9th Cir. 1978), cert. granted sub nom., Lake Country Estates, Inc. v. TRPA, 436 U.S. 943, 98 S.Ct. 2843, 56 L.Ed.2d 784 (1978), squarely holds that the TRPA enjoys complete Eleventh Amendment immunity, its motion to dismiss should be granted. The Jacobson decision makes it equally clear that the immunity of the Executive Director and Board members depends on their good faith and whether they were acting in executive or legislative capacities, questions ordinarily deserving of factual development. Since dismissal on the basis of immunity would thus be inappropriate with respect to these defendants at this time, the remaining issues shall be addressed as to them.

The plaintiffs' first claim to relief plainly seeks a construction of the Compact and thus "arises under" the "laws" of the United States for purposes of invoking federal question jurisdiction under 28 U.S.C. § 1331. League to Save Lake Tahoe v. TRPA, 507 F.2d 517 (9th Cir. 1974), cert. denied 420 U.S. 974, 95 S.Ct. 1398, 43 L.Ed.2d 654 (1975). Federal question jurisdiction cannot be defeated by a plea denying the merits of the claim. The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 33 S.Ct. 410, 57 L.Ed. 716 (1913). Nonetheless, dismissal is appropriate "when the allegations of the complaint clearly demonstrate that plaintiff does not have a claim." Wright & Miller, Federal Practice & Procedure: Civil § 1357 at p. 604 (West 1969).

The plaintiffs' argument, that a denial without prejudice does not amount to "final action," has a certain semantic appeal. However, the reference in Article VI(k) to "final action" must be read in light of the highly technical definition given the term "take action" in Article III(g) of the Compact, requiring a dual majority of each state's delegation for the Governing Board to "act."⁴ As the agency charged with developing and enforcing minimal land use standards applicable throughout the Lake Tahoe Basin, the TRPA possesses wide discretion, in the exercise of which it is entitled to considerable deference by this Court. See People ex rel. Younger v. TRPA, 516 F.2d 215 (9th Cir. 1975), cert. denied 423 U.S. 868, 96 S.Ct. 131, 46 L.Ed.2d 97 (1975). The complaint itself reveals that the TRPA staff was concerned with the impact the plaintiffs' project would have on the air quality in the Basin. To hold that the TRPA lacks the authority, by dual majority vote, to deny an application without prejudice pending completion of a comprehensive air quality plan would seriously impair the flexibility required in the discharge of its responsibilities. Indeed, to the extent Article VI(k) provides that "the agency shall take final action, whether to approve, to require modification or to reject," (emphasis added) such flexibility seems, at least by analogy, to be expressly contemplated by the Compact. Accordingly, plaintiffs' first cause of action shall be dismissed for the reason that it fails to set forth an actionable claim, Fed.R.Civ.P. 12(b)(6).

Plaintiffs' second and fourth causes of action are closely related. Each seeks evidentiary review of the Board's decision and each does so on the basis that, absent evidence improperly admitted and considered, the decision was without adequate evidentiary support. The second claim to relief apparently seeks its jurisdictional predicate in League to Save Lake Tahoe v. TRPA, supra, and League to Save Lake Tahoe v. B.J.K. Corp., 547 F.2d 1072 (9th Cir. 1976). Thus, it is alleged that plaintiffs' project met existing air quality standards and therefore that the cause of action "arises under" sections 7.10 and 8.3 of the agency's Rules of Practice and Procedure, requiring respectively that agency action be based upon "substantial evidence" and be aimed at "implementing and enforcing the Agency's Plans and ordinances." In their fourth cause of action, by contrast, the plaintiffs seek to proceed in Bivens fashion (Bivens v. Six Unknown Named Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971)) directly under the Fourteenth Amendment, see Jacobson v. TRPA, supra. That claim alleges, in apparent contradiction to the second, that the sole basis for the agency's decision was evidence pertaining to the lack of community need for a medical facility, evidence which, as an agency limited to environmental concerns, the TRPA should have shunned.

Traditionally, federal court review of local zoning decisions has been extremely limited. See, e. g., Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926). This has been held true even though the zoning board function at issue involves reclassification of a piece of property under an existing plan rather than the adoption of a comprehensive zoning plan. See South Gwinnett Venture v. Pruitt, 491 F.2d 5, 7 (5th Cir. 1974) (en banc), cert. denied 419 U.S. 837, 95 S.Ct. 66, 42 L.Ed.2d 64 (1974). Only in cases arising in the District of Columbia, where the courts are statutorily vested with the authority to review decisions of the District of Columbia Zoning Board, do the federal courts engage in more rigorous review of the evidentiary findings of local zoning boards. Cf. Hot Shoppes, Inc. v. Clouser, 231 F.Supp. 825 (D.D.C.1964), aff'd mem., 120 U.S.App.D.C. 353, 346 F.2d 834 (1965).

Of course, this case is somewhat unique, involving that "centaur of legislation," (Jacobson v. TRPA, supra, footnote 8) the bi-state compact. The question before this Court, therefore, is the scope of federal court review of the evidentiary rulings and findings of the TRPA. It is by now well-established that cases seeking a construction of the Compact, League to Save Lake Tahoe v. TRPA, supra, and even, in some instances, of an ordinance enacted pursuant to Compact authority, League to Save Lake Tahoe v. B.J.K. Corp., supra, "arise under" federal law and thus present "federal questions." However, the Court in B.J.K. was careful to limit its extension of the jurisdictional principle articulated in League to Save Lake Tahoe v. TRPA:

"Questions arising under the TRPA Land Use Ordinance enacted pursuant to the Compact do not automatically give rise to Section 1331(a) jurisdiction, because the Compact is not an ordinary federal statu

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