Sfw Arecibo, Ltd. v. Rodriguez

• Decision Date: 14 July 2005
• Docket Number: No. 04-2587.,04-2587.
• Citation: 415 F.3d 135
• Parties: SFW ARECIBO, LTD. and FW Associates, Ltd., Plaintiffs, Appellants, v. Angel D. RODRÍGUEZ; Wanda Capó; Wanda Marrero; Frederick Muhlach, in his personal and official capacity as a member of the Planning Board of Puerto Rico; Fernando Félix, in his personal and official capacity as a member of the Planning Board of Puerto Rico; and Nelson Vélez, in his personal and official capacity as a member of the Planning Board of Puerto Rico, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

415 F.3d 135

SFW ARECIBO, LTD. and FW Associates, Ltd., Plaintiffs, Appellants, v. Angel D. RODRÍGUEZ; Wanda Capó; Wanda Marrero; Frederick Muhlach, in his personal and official capacity as a member of the Planning Board of Puerto Rico; Fernando Félix, in his personal and official capacity as a member of the Planning Board of Puerto Rico; and Nelson Vélez, in his personal and official capacity as a member of the Planning Board of Puerto Rico, Defendants, Appellees.

No. 04-2587.

United States Court of Appeals, First Circuit.

Heard May 3, 2005.

Decided July 14, 2005.

COPYRIGHT MATERIAL OMITTED

Rubén T. Nigaglioni, with whom Nigaglioni & Ferraiuoli Law Offices, PSC was on brief, for appellants.

Irene S. Soroeta-Kodesh, Assistant Solicitor General, with whom Salvador J. Antonetti Stutts, Solicitor General, and Mariana D. Negrón Vargas, Deputy Solicitor General, were on brief, for appellees.

Before BOUDIN, Chief Judge, LYNCH and LIPEZ, Circuit Judges.

LIPEZ, Circuit Judge.

This appeal arose from a dispute over a land use permit for the development of a shopping center in Arecibo, Puerto Rico. Two real estate developers sued members of the Puerto Rico Planning Board in the United States District Court for the District of Puerto Rico pursuant to 42 U.S.C. § 1983, alleging that the Planning Board, which reviews proposed development projects throughout the Commonwealth, violated various provisions of the United State Constitution when it erroneously determined that the developers' land use permit had expired without the commencement of "actual and effective construction."¹ The district court dismissed the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim. The developers filed a timely appeal. Seeing "nothing in the present case to distinguish it sufficiently from the usual land developer's claim under state law to warrant recognition of a federal constitutional question," Creative Env'ts, Inc. v. Estabrook, 680 F.2d 822, 833 (1st Cir.1982), we affirm.

I.

The appellants, real estate developers SFW Arecibo Ltd. Partnership and FW Associates Ltd. Partnership ("Developers"), are constructing a shopping center in Arecibo, Puerto Rico. The Planning Board approved a preliminary development plan for the project on August 26, 1996, and issued a land use permit that required the Developers to begin actual and effective construction by December 16, 1998. Once the permit was issued, the Developers had to apply to the Puerto Rico Permits and Regulations Administration ("ARPE") for specific construction permits.

On November 16, 1998, the Developers requested that the Planning Board extend the deadline by which actual and effective construction had to begin. The request was denied on December 9, 1998. Nevertheless, the Developers obtained the relevant permits from the ARPE and began to excavate and lay foundations before the December 16, 1998 deadline for commencement of actual and effective construction. The ARPE agreed that the Developers had met the deadline and continued to issue permits for the project.

On January 27, 2003, the Developers requested that the Planning Board clarify whether the original land use permit would allow for the building of a Home Depot store in the shopping center. The Planning Board denied the request for clarification on February 21, 2003, explaining that the land use permit had expired on December 16, 1998 because the Developers had not commenced actual and effective construction by that deadline. The Planning Board also informed the ARPE that the underlying land use permit had expired, and thus that it could no longer issue construction permits for the Developers' project.

On July 3, 2003, the Developers appealed to the Puerto Rico Court of Appeals for administrative review of the Planning Board's decision. The Puerto Rico appellate court sided with the Developers, ruling on August 25, 2004 that the Planning Board's decision was erroneous and that the Board's actions violated the Developers' ownership rights as set forth in the Puerto Rico Constitution. FW Assocs. v. Junta De Planificación, No. KLRA-03-00476, 2004 WL 2480859 (P.R. Ct.App. Aug. 25, 2004). The Puerto Rico appellate court's decision is currently pending before the Puerto Rico Supreme Court.

Not content to limit their claims to the courts of Puerto Rico, the Developers also filed a § 1983 action against members of the Planning Board in federal district court on September 5, 2003. In their federal complaint, the Developers alleged that the Planning Board's erroneous revocation of the land use permit violated their rights under the Takings, Due Process, and Equal Protection Clauses of the federal Constitution.² The Planning Board responded by filing a motion to dismiss the complaint for failure to state a claim. See Fed.R.Civ.P. 12(b)(6).

The Developers failed to reply to the 12(b)(6) motion within the time allotted. Several days after the deadline had passed, the Developers requested an extension of time to file their opposition. On January 12, 2004, the district court denied the request for an extension and deemed the motion to dismiss unopposed. The district court subsequently issued an opinion and order dismissing the case pursuant to Rule 12(b)(6). The court's ruling rested solely on our precedent in PFZ Properties, Inc. v. Rodriguez, 928 F.2d 28 (1st Cir. 1991), because that case, in the court's view, "resolved a controversy nearly identical to the one present in the instant case." SFW Arecibo, Ltd. v. Rodriguez, No. 03-1970 (D.P.R. Sept. 22, 2004).

II.

We review a district court's grant of a motion to dismiss de novo. Greene v. Rhode Island, 398 F.3d 45, 48 (1st Cir. 2005).³ In so doing, we accept as true the well-pleaded factual allegations of the complaint, drawing all reasonable inferences in the non-movants' favor. Id.

A. Takings Claim

The Developers assert that the Planning Board's erroneous determination that their permit expired without the commencement of actual and effective construction amounted to a taking of private property without just compensation, thereby violating the Fifth and Fourteenth Amendments to the United States Constitution. This claim is premature. It is well-settled that "if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation." Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 195, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). Adequate procedures for seeking just compensation are available under Puerto Rico law. See Deniz v. Mun. of Guaynabo, 285 F.3d 142, 146-47 (1st Cir.2002) (concluding that Puerto Rico case law recognizes an inverse condemnation remedy by which property owners can seek just compensation). Because the Developers have not sought just compensation through those state law procedures, their complaint does not state a valid federal takings claim. See id. at 149 ("A plaintiff's failure to exhaust the inverse condemnation remedy renders premature a section 1983 damages action predicated upon an alleged takings violation.").

B. Procedural Due Process Claim

To establish a procedural due process claim under § 1983, a plaintiff "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." PFZ Prop., 928 F.2d at 30. Here, the Developers assert that the Planning Board violated their procedural due process rights when it determined that the land use permit had expired and revoked it without notice or a hearing. That assertion is misguided. If the Developers have a property interest in the land use permit (we assume arguendo that they do), the post-deprivation process available to them under Puerto Rico law is a constitutionally adequate protection for that interest.

The Developers do not challenge the adequacy of the permitting procedures established by Puerto Rico law. Instead, they allege that the Planning Board illegally revoked their land use permit without jurisdiction to do so. We rejected an analogous due process claim in PFZ Properties, explaining that in this context, our focus is on the availability of post-deprivation, rather than pre-deprivation, process:

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 Equal Protection Clause.... 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 § 1983.... [T]he only question is whether the post-deprivation process available to [the plaintiff] is adequate.

Id. at 31 (internal citations omitted). We went on to hold that "the combination of administrative and judicial remedies provided by Puerto Rico law is sufficient to meet the requirements of due process." Id.

The post-deprivation process that we found adequate in PFZ Properties included the right to petition the administrative agency for reconsideration and to seek judicial review in the courts of Puerto Rico. Id. The same procedures for review were available in this case. The Developers petitioned the Planning Board to reconsider its ruling. It then sought judicial review before the Puerto Rico Court of Appeals, which ruled in its favor. That ruling is now pending before the Puerto Rico Supreme Court. A holding that the Developers had a federal procedural due process claim on these facts would contravene our case law. See id. at 31; see also Nestor Colon Medina & Sucesores, Inc. v. Custodio, 964 F.2d 32, 40 (1st Cir.1992).

The Developers nevertheless attempt...