Fifth Circuit Court of Appeals Rejects Due Process, Equal Protection and Takings Claims Arising from Denial of a Development Plan to Build a Car Wash

This post was authored by Matthew Loeser, Esq.
In 2012, Da Vinci contracted with Daniel Griffith to purchase a lot. The purchase was conditioned upon approval by the City of a development plan to build a car wash. Pursuant to the planned development zoning, a car wash was a permitted use on the Lot. In February 2013, the City conducted a review and found that the proposed development plan for a car wash was unlikely to have a negative effect on the location and was consistent with the surrounding uses. One month later, Da Vinci and the purchaser submitted a formal development plan application for the lot. A city staff report found that the plan complied with the minimum commercial design standards and would have no impact on traffic; however, there was significant opposition to the development plan from real estate developer Jim Poynter and two former city officials. Ultimately, the planning and zoning commission recommended against approving the development plan because it did not mitigate compatibility problems and it did not enhance the neighborhood. The council voted to deny the development plan application, and Da Vinci filed suit against the City and several other parties in state court. The district court judge granted the City’s motion.
As to the substantive due process claim, the court found Appellants failed to cite any explicit language in the ordinances requiring the city council to grant a development plan application when all guidelines were met. Since there was no “explicitly mandatory language” in the ordinances requiring city officials to approve a development plan, even where a plan met all required guidelines, the city council had discretion to grant or deny the benefit. Accordingly, Appellants did not have a protected property right in the approval of its development plan.
Appellants next contended that their development plan application was treated differently than the application of Cooper Carwash. The district court found that Cooper Carwash was not similarly situated, and, even if it was, the City had a rational basis for the differential treatment. Here, the record indicated that the city council member, who made the motion to deny the application, stated several reasons for denying the development plan, including that the proposed development did not enhance the neighborhood or address the concerns of the neighbors. As Appellants failed to show that the City lacked a rational basis for its decision to deny the development plan, the court held that the district court’s grant of summary judgment was appropriate.
Finally, the court found that athough the value of Da Vinci’s property was undoubtedly reduced by the denial of its development plan application, the zoning and allowable uses of the property never changed. As the zoning of the lot in question had not changed, the court declined to find any reasonably held investment-backed expectations were affected by the City enforcing restrictions in place when such investments were made. Furthermore, Da Vinci could not show the character of the government action was severe enough to justify a compensable taking under Texas law.
Da Vinci Investment, LP v City of Arlington, 2018 WL 4090599 (5th Cir CA 8/27/2018)