Since the early 1980s, Soundview Associates has been working to turn a 191-acre parcel bordering the Long Island Sound in the Town of Riverhead, NY, into a residential and commercial development with a golf course. The project received a 1982 special permit to construct a 300-unit condominium complex, including a tavern, restaurant, retails store and health spa, conditioned on Soundview executing certain covenants and agreements to retain open space and forgo additional development around the golf course. Soundview executed a scenic easement over the golf course, and submitted in 1983 a site plan which included a health club facility in an area outside the golf course portion. At the time of the 1982 special permit, the provisions of the Town Code concerning special permits provided that such permits were to last in perpetuity, unless specifically limited by Town resolution. Soundview’s 1982 permit did not specify a period for construction or completion, or a date by which certain use requirements needed to be done by.
By 2002, Soundview had agreed to reduce the permitted number of condominium units to 270, and had constructed or conveyed the rights to construct most of the condominium units, though the parties disagreed on how many had been constructed by that time—the Town argued that 250 of the 270 permitted units had been constructed, and that an additional 6 had been approved; Soundview alleged only 216 units had been constructed. Also by that time, Soundview had divided the golf course out into a separate parcel, and had signed an option agreement for $10 million with Rugby Recreational Group LLC, which had been leasing space there since 1996.
In 2002, Soundview applied to the Town for a special permit to construct 48 condominium units and a spa complex on the separate golf course parcel. The Town Board denied the special permit application, finding that the site was not suitable for such development because of the covenants and restrictions entered into by Soundview, and because the 1982 approvals did not include permission to construct a health spa. Soundview brought an Article 78 proceeding challenging this denial. The state Supreme Court dismissed the proceeding in April 2005. Soundview appealed the decision in 2006.
Meanwhile, in June 2005, Wulfurst Farms LLC (a sister company to Rugby Recreational Group) purchased a 40-acre parcel adjoining the Soundview golf course and applied to the Town to modify the parcels’ boundary lines to add 10 acres to the golf course, subdivide the remaining 30 acres for a 30-lot subdivision development, and construct a new multi-million dollar clubhouse on the golf course, which would be called Baiting Hollow Club.
When the Town learned that Wulfurst intended to pursue both the 2002 proposal for the health spa and residential development as well as the 2005 proposal for the Baiting Hollow Club, the Town informed Wulfurst that the projects would need to be considered under one application and environmental review, given that they were related and would have cumulative impacts. At that time, Rugby and Wulfurst claimed they were told that their 2005 application, amended to include the health spa and residential development from 2002, would be processed by the town if they made the Article 78 appeal of the 2002 denial “go away.” They claimed the Town pressured them into abandoning the 2002 spa application before they would be permitted to pursue the 2005 application. In 2007, the appeal was withdrawn and the 2005 application was approved. Soundview sold the golf course parcel to Wulfurst, and the Baiting Hollow Club was constructed there.
Soundview then filed this complaint in 2009, alleging that its First Amendment rights to petition the government for redress of its grievances were violated when the Town “effectively extort[ed]” it into abandoning its Article 78 appeal in order to get its other project reviewed. Soundview also claimed procedural and substantive due process violations; these claims were dismissed by the District Court because there was not federally protected property interest at issue and because, even if there had been a protected interest, the Town had legitimate interests that rationally could have been furthered by denying the 2002 application. The Town moved for summary judgment under Federal Rule 56, seeking to dismiss the First Amendment claim for lack of proof and on qualified immunity grounds.
To sustain a First Amendment right to petition claim, the Court noted that Soundview needed to prove (1) that it had an interest protected by the First Amendment, (2) that the Town’s actions were motivated by or substantially caused by Soundview’s attempts to exercise its protected right, and (3) the Town’s actions effectively chilled Soundview’s exercise of its First Amendment rights.
On the question of whether Soundview had an interest protected by the First Amendment, Soundview argued it had a constitutional right to avail itself of the state court system by appealing the dismissal of its Article 78 action. However, the Town contended that the Article 78 appeal lacked a “reasonable basis” and thus it should not be protected by the First Amendment. Because the discretion to approve or deny the application was vested in the Town, and because there was no proof of arbitrary or capricious action, the Court held that Soundview’s Article 78 appeal was, in fact, baseless, and that no rational jury could have concluded that the Town had abused its discretion. Thus, the Court concluded that Soundview did not have a protected First Amendment right to maintain the appeal, and summary judgment should be awarded to the Town on the first prong of the analysis.
Even if that hadn’t been the case, the Court went on to say that the second and third prongs of the test also failed, since Soundview had not adequately shown the Town was motivated by Soundview’s attempts to exercise its right to petition, or that the Town’s actions had effectively chilled Soundview’s attempts to exercise a protected right. The Court held that there was simply not sufficient evidence to convince a rational jury that the Town’s motivation in refusing to process the 2005 application was a desire to infringe on Soundview’s rights, or that any suggestions made by Town officials that Soundview abandon the appeal were motivated by a desire to try to deprive Soundview of those rights. Further, the Court held that the type of harm suffered by Soundview was not the type of harm protected by this type of First Amendment claim.
For all of these reasons, the Court awarded summary judgment to the Town, dismissing all of Soundview’s claims.
Soundview Associates v. Town of Riverhead, 2013 WL 5422984 (E.D.N.Y. 9/30/13)