The New Mexico Court of Appeals affirmed a jury award of $8.3 million in damages for a city’s violation of a developer’s procedural due process rights. The court ruled the developer established it had a constitutionally protected property interest in its property’s existing zoning, which the city council violated by not meeting the criteria applicable to a downzoning.
The decision is the latest chapter in a 13-year saga involving a prior decision by the court of appeals, later reversed by the New Mexico Supreme Court . Albuquerque Commons (ACP) leased a 28-acre parcel of land, formerly the site of a Catholic high school, in the city’s Uptown Sector. The land was zoned SU-3, for high-intensity mixed uses, under the city’s 1981 sector plan. ACP later sold the leasehold interest to another developer. A 1994 plan for developing the site was withdrawn because of public opposition. Later that year, the city began a comprehensive review of the 1981 sector plan. Before it was finished, the developers submitted a revised plan. The city speeded up consideration of the sector plan revisions and adopted a new sector plan in 1995.
ACP sought review of the 1995 plan, claiming violation of its due process rights and an unconstitutional taking. A jury issued a verdict in favor of ACP on both claims. The court of appeals reversed. The Supreme Court reversed the court of appeals’ ruling, holding the 1995 sector plan constituted a downzoning of ACP’s property, carried out without reference to the criteria justifying a downzoning, which would have triggered a quasi-judicial process. The court remanded the case to the court of appeals to determine, inter alia, whether ACP had a constitutionally protected interest that would satisfy the threshold requirements of a claim under 42 U.S.C. § 1983.
Establishing whether a party has a constitutionally protected property right involves an initial determination whether there is a state-created substantive property right and whether that right triggers federal due-process protection, the court observed. While a landowner has no vested right in any particular zoning classification, under existing state-court precedent and the city’s applicable zoning regulation, before initiating a downzoning, the city had to demonstrate that the original zoning was mistaken, changed conditions in the neighborhood required a rezoning, or (under the city regulations) a different use category would be more advantageous to the community. Thus, ACP had a right to the benefit of the 1981 sector plan unless the city could demonstrate one of the criteria necessary to support a downzoning.
The court then turned to the question whether ACP had a legitimate claim of entitlement to a federally protected property interest. When considering land-use regulations, the entitlement analysis turns on the decision maker’s degree of discretion. That required determining whether applicable law limited the city’s discretion to change the sector plan. The criteria for justifying zoning map amendments are substantive and direct limitations on the city’s discretion, the court said. By its own rules, the city cannot amend the zone map without demonstrating in some way at least one of those criteria. The language of the regulations and the state supreme court ruling was sufficiently mandatory to support a claim of entitlement to the existing zoning under the circumstances presented in this case, the court concluded.
The court rejected the city’s contention that ACP received all the process it was due. It acknowledged that failing to hold a quasi-judicial hearing on a zoning change was not in itself a deprivation of due process. However, the opportunity to be heard in a meaningful manner at a meaningful time is a fundamental requirement of due process, it said.
In its review of the downzoning issue, the supreme court said the city made no effort to provide ACP an impartial tribunal by limiting ex parte contacts with members of the city council. In this case, there was ex parte contact between a council member and an individual who encouraged her not to propose amendments that would have allowed ACP to proceed with its project, the court noted. That contact had a direct negative effect on ACP’s protected property rights. An impartial tribunal would have had much value as an additional safeguard of those rights. Because the city failed to provide ACP with an impartial tribunal, it violated the developer’s right to procedural due process, the court concluded.
Albuquerque Commons Partnership v. City Council of Albuquerque, 2006-NMCA-143, 140 N.M. 751, 149 P. 3d 67 (10/30/2008 )
The opinion can be accessed here.
The amicus brief of the American Planning Association can be accessed here.
Special thanks to James Lawlor, Esq. of the Land Use Legal Report for providing this abstract. For information about this monthly Report, please email James Lawlor at firstname.lastname@example.org .