Posted by: Patricia Salkin | September 4, 2010

Federal District Court Dismisses Equal Protection Class of One and Retaliation Claims Against Developer and finds Sex Discrimination Claim was Sufficient for Equal Protection Allegation

Real estate developer brought an action alleging a violation of USC §§ 1983, 1985 and 1988 for failing to approve zoning changes.  Defendant’s moved to dismiss for lack of jurisdiction and for failure to state a claim.  The District Court held that 1) Plaintiff’s class of one equal protection claim failed, 2) the action was ripe for review under the futility exception to the final decision requirement, 3) Plaintiff failed to state a First Amendment retaliation claim, 4) Plaintiff failed to state a claim of conspiracy under § 1983, 5) Plaintiff sufficiently stated a claim of sex discrimination which violated the Equal Protection clause, and 6) that Rule 11 sanctions were warranted.

Plainitff sought to develop two commercial properties in the Town of Southampton, a shopping center and a mixed hotel, commercial and assisted project.  Ms. Gottheld, the owner of Catcove Corp. failed to obtain the proper zoning changes for both development projects.  She alleges that the Defendants purposefully frustrated the projects in an effort to force her to sell the project to a politically-connected developer.

Plaintiff challenged Defendant’s application of local zoning laws, but the District Court found that the application of zoning laws is a state action that involves discretionary decision-making. Because the challenge included a form of state action, the District Court held that the class of one claim failed as a matter of law since the Town has broad discretion in adjudicating zoning matters and therefore, the zoning-related claims Plaintiff brought were barred.

Ms. Gottheld’s gender discrimination claim survived based on the evidence provided, but the Court permitted this claim with hesitation because plaintiff pled this claim solely as an alternative. The foundation for Plaintiff’s claims was based on allegations that the Defendants wanted to steal her profits and divert them to politically-connected friends.  The District Court suggests that if the Defendants acted out of a desire to divert profits, it undercuts the suggestion they acted based primarily on Plaintiff’s gender.

Plaintiff’s retaliation claim was based on allegations that Defendant’s retaliated against Plaintiff for exercising her First Amendment right to petition.  More specifically, plaintiff alleged that after she refused to sell the project and instead continued to pursue zoning approvals, the defendants retaliated by stripping Plaintiff’s property of a statutory protection against tax increases and then raised taxes by 400%.  The Court agreed that filing zoning applications is a form of petitioning protected by the First Amendment but Plaintiff failed to plead facts linking the zoning application to tax increases, and therefore, Plaintiff’s retaliation claim was dismissed.

The District Court went on further to hold that the conspiracy claim failed because Plaintiff neglected to plead facts demonstrating the existence of conspiracy to engage in gender discrimination.  Moreover, the conspiracy claim was brought against defendants who, except for the state Department of Environmental Conservation, were all part of the same municipal entity and therefore, the intracorporate conspiracy doctrine barred any conspiracy claim directed solely against the Southampton defendants.

Catcove Corp. v. Heaney, 685 F.Supp.2d 328 (E.D.N.Y. Feb. 11, 2010)

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