Zia Shadows, L.L.C. v. City of Las Cruces

• Decision Date: 22 July 2016
• Docket Number: No. 15-2009,15-2009
• Citation: 829 F.3d 1232
• Parties: Zia Shadows, L.L.C., a New Mexico limited liability company; Alex Garth; William Garth, Plaintiffs-Appellants, v. City of Las Cruces, a Municipal Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

829 F.3d 1232

Zia Shadows, L.L.C., a New Mexico limited liability company; Alex Garth; William Garth, Plaintiffs-Appellants

v.City of Las Cruces, a Municipal Corporation, Defendant-Appellee.

No. 15-2009

United States Court of Appeals, Tenth Circuit.

Filed July 22, 2016

Cindy Rhodes Victor, Kus Ryan & Associates, PLLC, Auburn Hills, Michigan, for Plaintiffs-Appellants.

David P. Lutz (William L. Lutz with him on the briefs), Martin, Lutz, Roggow & Eubanks, P.C., Las Cruces, New Mexico, for Defendant-Appellee.

Before BRISCOE, McKAY, and McHUGH, Circuit Judges.

McHUGH

, Circuit Judge.

I. INTRODUCTION

This appeal arises from a zoning dispute between Zia Shadows L.L.C. and the City of Las Cruces (the City). Zia Shadows L.L.C. and its principals, Alex and William Garth (collectively, Zia Shadows), filed suit in federal district court, alleging the City's delays in approval of a zoning request—and the conditions ultimately attached to the approval—violated Zia Shadows' rights to due process and equal protection. Zia Shadows also alleged the City's actions were taken in retaliation for Zia Shadows' public criticisms of the City. The district court granted summary judgment to the City on Zia Shadows' due-process and equal-protection claims, and a jury found in favor of the City on Zia Shadows' First Amendment retaliation claim.

Zia Shadows now argues the district court erred in granting summary judgment, the district court abused its discretion both in its instruction of the jury and its refusal to strike a juror, and the jury's verdict is against the clear weight of the evidence. We affirm the district court's judgment, concluding Zia Shadows failed to establish the requisite elements of its due-process and equal-protection claims and has not demonstrated reversible error in either the proceedings or verdict at trial.

II. BACKGROUND

Zia Shadows operated a mobile-home park in Las Cruces, New Mexico, under a special-use permit from the City. In late 2000, a dispute over water-rights fees arose between Zia Shadows and the City, and Alex Garth protested these fees and lodged written and oral complaints with the City Council. In December 2002, the City informed Zia Shadows that, under a new zoning code adopted in 2001, Zia Shadows was required to enter into an approved compliance plan with the City before it could replace or add new mobile homes in the park. In March 2003, Zia Shadows submitted a proposed compliance plan, seeking to convert its park to a Planned Unit Development (PUD), which would excuse Zia Shadows from compliance with certain land-use requirements.

The City's Planning and Zoning Commission recommended approval of Zia Shadows' PUD application, but the City Council questioned whether Zia Shadows provided a public benefit to offset the zoning variances it sought, as required by the PUD ordinances. The City expressed some willingness to approve the project if Zia Shadows helped to pay the cost of widening the adjacent public roadway, or if Zia Shadows could demonstrate it was providing affordable housing as defined by the U.S. Department of Housing and Urban Development. In August 2003, Zia Shadows agreed to table its PUD application and to work with City staff to meet the City's requirements.

In November 2004, Zia Shadows filed for bankruptcy to avoid foreclosure on its property. Although Zia Shadows subsequently agreed to provide a public benefit by paying for a portion of the road-widening project, the City expressed concern that Zia Shadows would be unable to satisfy its obligations due to its bankruptcy. Approval of Zia Shadows' PUD application was therefore delayed until it could obtain a bond to cover its obligations. The City ultimately approved the PUD application in June 2006, subject to final plat approval and an agreement on the public-roadway improvements. But Zia Shadows' lender foreclosed on the property, and the property was sold in September 2006.

Zia Shadows filed suit against the City in New Mexico state court, seeking relief under 42 U.S.C. § 1983

for violation of its due-process, equal-protection, and First Amendment rights. The City timely removed the action to federal court. The City then sought summary judgment on all of Zia Shadows' claims. The district court granted summary judgment on Zia Shadows' due-process and equal-protection claims, but concluded that material factual disputes rendered summary judgment on Zia Shadows' First Amendment retaliation claim inappropriate. The parties tried that claim before a jury, which returned a verdict in favor of the City. Zia Shadows then filed a motion for a new trial; the district court denied the motion. Zia Shadows now appeals.

III. ANALYSIS

Zia Shadows asserts four errors in the district court proceedings. First, it contests the summary judgment rulings on its due-process and equal-protection claims. Second, Zia Shadows claims it was prejudiced by a last-minute change to the jury instructions. Third, it requests a new trial because the district court allowed a City employee to sit on the jury. Fourth, Zia Shadows argues the jury's verdict on its retaliation claim was against the clear weight of the evidence.

A. The District Court Did Not Err in Granting Summary Judgment on Zia Shadows' Due-Process and Equal-Protection Claims.

We first consider Zia Shadows' challenges to the district court's summary judgment rulings on Zia Shadows' due-process and equal-protection claims. “We review the grant of summary judgment de novo applying the same standard as the district court embodied in Rule 56(c).” Adler v. Wal – Mart Stores, Inc. , 144 F.3d 664, 670 (10th Cir. 1998)

. “In applying this standard, we view the factual record and draw all reasonable inferences therefrom most favorably to the nonmovant.” Id. Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a)

.

1. Due Process

To prevail on a due-process claim under § 1983

, “a plaintiff must first establish that a defendant's actions deprived plaintiff of a protectable property interest.” Nichols v. Bd. of Cty. Comm'rs , 506 F.3d 962, 969 (10th Cir. 2007). A property interest exists in the constitutional sense where a litigant can demonstrate a “legitimate claim of entitlement” to the claimed benefit. Hyde Park Co. v. Santa Fe City Council , 226 F.3d 1207, 1210 (10th Cir. 2000). In the municipal land-use context—where the asserted property interest is a right to particular action or inaction by city zoning authorities—our analysis of the litigant's entitlement focuses on the level of discretion allowed to the zoning authority under the applicable state and local zoning laws. Id. A legitimate claim of entitlement to a particular land-use decision exists only when that decision is legally mandatory: where the land-use authority's “discretion is limited by the procedures in question,” and those procedures, “if followed, require a particular outcome.” Nichols , 506 F.3d at 970. But “where the governing body retains discretion and the outcome of the proceeding is not determined by the particular procedure at issue, no property interest is implicated.” Id. The litigant asserting a property interest in a particular zoning decision bears the burden to “demonstrate that a set of conditions exist under state and local law” that so limit the land-use authority's discretion as to make the decision legally mandatory. Hyde Park , 226 F.3d at 1210.

In support of its due-process claim, Zia Shadows asserts a protectable property interest in its special-use permit to operate as a mobile-home park and in the approval of its PUD application. Thus, to prevail, Zia Shadows must show that under state or local law, the City was required to leave Zia Shadows' special-use permit intact or to grant its PUD application more promptly and without the conditions to which Zia Shadows objects.

a. Special-Use Permit

As to the special-use permit, Zia Shadows has not even attempted to meet its burden; it merely asserts it had been granted a permit and was in compliance with the permit's conditions. This assertion may well be true, but it misses the crucial point: whether the City had discretion to modify or revoke the permit through subsequent zoning amendments. The district court concluded the City did have such discretion, noting that Zia Shadows had not cited a single authority to the contrary. And Zia Shadows has failed on appeal to direct this court to any authority limiting the City's discretion to revoke or modify a special-use permit. Because Zia Shadows has failed to meet its burden to show a legitimate claim of entitlement to the continued validity of its special-use permit, we agree with the district court that Zia Shadows had no constitutionally protected property interest in that permit.

b. PUD Application

With respect to approval of its PUD application, Zia Shadows relies on the municipal ordinance that requires nonconforming mobile-home parks to seek approval of a zoning compliance plan. This ordinance provides that a PUD “may satisfy the compliance plan requirement” and requires any compliance plan to be “approved, approved with conditions, or denied by the Community Development Department.” Las Cruces, N.M., Code § 38-73(B)(3)(c).¹ Because nothing in this section requires further review by other City departments or the City Council, Zia Shadows contends the Community Development Department's approval alone vested Zia Shadows with a legitimate expectation of—and therefore a legal entitlement to—the approval of its PUD application without further review or conditions. Thus, in Zia Shadows' view, the City Council lacked discretion, or even authority, to delay, deny, or attach additional conditions to the approval of Zia Shadows' PUD application once the Community Development Department had approved it as a compliance plan.

Zia Shadows' argument assumes, however, that section 38-73 marks the beginning and end...