Fed. Dist. Court in NY Dismisses Takings and Due Process Claims Following Town’s Rescission of Negative Declaration

Plaintiffs Leonard and Habiague applied to have their property located on East Mountain in the Town of Union Vale designated an open development area, which would allow the property to be subdivided into private lots serviced by private roads. The first section of the project, “East Mountain,” was approved in 1987, and the Board made a determination under the New York State Environmental Quality Review Act (“SEQRA”) that the Project would result in no significant adverse impacts on the environment (the “Negative Declaration”). Plaintiffs then applied for a subdivision of the next section of the Project, known as “East Mountain North.” The Board rejected Plaintiffs’ application for East Mountain North and the Plaintiffs sued the Board in New York State Supreme Court, Dutchess County. The court denied Defendants’ motion to dismiss Plaintiffs’ second amended complaint; found that the Board’s 2012 resolution rescinding the Negative Declaration was invalid; and determined that the Board’s rejection of Plaintiffs’ application for preliminary plat approval was arbitrary and capricious. Thereafter, the Board called a public hearing in which the members of the Board adopted a resolution to rescind the Negative Declaration.

The Board appealed and moved to reargue the portion of its motion that sought dismissal of Plaintiffs’ due process claims. The court granted the Board’s motion to reargue and thereafter granted the Board’s motion to dismiss Plaintiffs’ due process claims. Following the Board’s rescission of the Negative Declaration, Plaintiffs instituted a second action in state court on or about August 9, 2013 (“Leonard II”). Defendants removed the action from New York State Supreme Court, Dutchess County, to federal court, which declined to exercise supplemental jurisdiction over Plaintiffs’ Article 78 and state law claims and remanded the claims to state court. Defendants then filed a motion to dismiss Plaintiffs’ Second Amended Complaint.

As an initial matter, the court addressed whether the Plaintiffs’ claims were ripe. The court found that a negative declaration constituted a “final decision”, and that Defendant’s removal of the takings claim to federal court satisfied the requirement that Plaintiffs exhaust their state court remedies. Having determined the claims were ripe, the court next addressed whether Plaintiffs asserted viable procedural or substantive due process claims under 42 U.S.C. § 1983. Constitutionally protected property interest in land use regulation arises only if there is an entitlement to the relief sought by the property owner. Here, because the Board’s authority to rescind the Negative Declaration was not “narrowly circumscribed” and afforded the Board discretion to review both “new information” and “changes in circumstances related to the project that were not previously considered” and may have a “significant adverse environmental impact,” the court found that Plaintiffs did not have a cognizable property interest in the Negative Declaration. Accordingly, Plaintiffs’ due process claim failed and Defendants’ motion to dismiss was granted.

Leonard v Planning Board of Union Vale, 2016 WL 67791 (SDNY 1/4/2016)