RRI Realty Corp. v. Incorporated Village of Southampton

JON O. NEWMAN, Circuit Judge:

This appeal concerns primarily the issue of whether an applicant for a building permit, subsequently ordered to be issued by a state court, had a sufficiently clear entitlement to the permit to constitute a property interest protected by the Due Process Clause. The issue arises on an appeal by the Village of Southampton, New York, and various Village officials, from a judgment of the District Court for the Eastern District of New York (Charles P. Sifton, Judge), after a jury trial, awarding RRI Realty Corp. (“RRI”) $2.7 million in damages and attorney’s fees pursuant to 42 U.S.C. §§ 1983, 1988 (1982). RRI claimed that the Village officials, acting in their official capacity, had wrongfully denied RRI’s application for a building permit, thereby depriving RRI of its property without due process of law. RRI cross-appeals to challenge the pretrial ruling of the District Court denying RRI’s motion to amend its complaint to assert a claim for punitive damages against the Village officials in their individual capacities.

We conclude that the record was insufficient to support a finding of such a clear entitlement to the permit as to establish a property interest protected by the Fourteenth Amendment. Accordingly, we reverse the judgment of the District Court, dismiss the cross-appeal, and remand with *913directions to enter judgment for the defendants.

Background

In 1979, RRI purchased a 63-room mansion and surrounding oceanfront property in the Village of Southampton. After planning extensive renovations for the mansion, RRI held discussions with the Village Building Inspector, Eugene Romano, regarding procedures for acquiring the requisite building permit. Although the plans were somewhat inchoate, it was clear that several features of the proposed design exceeded height restrictions in the local zoning code. Romano issued a limited building permit to RRI, covering only minor structural renovations; he advised RRI not to apply for successive building permits as plans changed but to make one omnibus building permit application when its plans became final. RRI also applied for, and received, a height variance from the Zoning Board of Appeals (“ZBA”) in anticipation of future construction.

Construction began in early 1981. By the spring of 1983, renovation had proceeded far enough to permit RRI to complete the final design plans for the residence. Under local law, RRI had to submit these plans to the Village’s Architectural Review Board (“ARB”) for approval before the Building Inspector could issue a permit. See Southampton, N.Y., Code § 116.32 (1984) (hereinafter “Code”). The ARB approved RRI’s final overall design in May 1983. The Building Inspector then instructed RRI to submit an application to his office for a comprehensive building permit. Romano also told RRI to apply to the ZBA for another variance — this one covering the portion of the proposed structure that would exceed the height limitations of the previous variance.

With RRI’s application pending before the ZBA, RRI and the Building Inspector devised a plan to divide the building permit application into three stages. Stage one represented the structural work covered by the initial building permit already issued by Romano. Stage two — the permit for which is the subject of this litigation — represented the balance of the construction that was in conformity with the zoning law and the initial variance. Stage three included that part of the structure for which a new height variance was required.

RRI submitted an application to the Building Inspector for a stage-two building permit in February 1984 along with final plans, which covered the entire project but were marked to indicate the three stages of construction. In early April, RRI, apparently at the Building Inspector’s request, submitted a new set of plans that did not include any stage-three alterations. These altered plans showed a house missing most of its roof, parts of one side, and an entire new wing. On April 11, the Building Inspector referred these revised plans and the permit application to the ARB for its final consideration. Apparently, under the Code, the ARB had to approve these more detailed designs even though it had approved plans for the overall project in 1983.

In early May 1984, the Building Inspector notified RRI, as he had throughout the spring, that a permit was about to be issued. However, no permit was forthcoming. The ARB decided to take no action on the building permit application. No one informed RRI of this decision. At about this time, the RRI project became a target of community rumor and a controversial matter in Village politics. Prominent Southampton residents attacked the project for attracting undesirable elements and promoting improper behavior. Reacting to this pressure, the Acting Mayor, a member of the Village Board of Trustees, ordered the Building Inspector to issue a stop-work order on May 17 because RRI lacked a building permit for all of the post-stage-one construction. The ZBA also denied RRI’s application for its stage-three variance.

On June 1, 1984, RRI commenced an Article 78 proceeding in New York Supreme Court, Suffolk County, against the Building Inspector and the ARB to compel issuance of a stage-two building permit and *914to cancel the stop-work order. The court granted summary judgment for RRI, finding that the ARB had refused to approve the stage-two permit because of its awareness that the stage-three permit would violate the existing zoning regulations and that this was an impermissible consideration for the ARB, whose role is limited by section 116-38 of the Village Code to matters of aesthetic judgment. RRI Realty Corp. v. Romano, No. 84-10639 (N.Y. Sup.Ct. Apr. 3, 1986) (unreported). The state court then found that by the time RRI had commenced the Article 78 proceeding, the ARB was in violation of the Code provision requiring the ARB, if it does not approve a permit application, to hold a public hearing within thirty days of its receipt of the application. Code, supra, § 116.32.E. Since the thirty-day period had expired, RRI was deemed entitled to the stage-two permit as a matter of law. RRI Realty Corp. v. Romano, supra. The court ordered issuance of a permit for what was “concededly legal work.” Id.

RRI received its building permit in August 1986 and commenced this action for damages caused by the delay in the issuance of the stage-two permit and for attorney's fees and costs. The jury found in favor of RRI, awarding it $1.9 million in damages. The judgment also includes .$762,970.36 for attorney’s fees and costs.

Discussion

The gravamen of the complaint is that RRI had a property interest in the stage-two permit, that Village officials arbitrarily and capriciously deprived RRI of its property interest in this permit, and that this violation of substantive due process was an official Village policy for which the municipality is liable for damages under section 1983. See Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); see also City of St. Louis v. Praprotnik, 485 U.S. 112, 108 S.Ct. 915, 99 L.Ed.2d 107 (1988). In the view we take of the case, it becomes necessary to consider only the threshold issue of whether the evidence sufficed to create a jury issue as to whether RRI had a property interest in the stage-two permit.

I. Development of the Legal Standard

Federal courts have followed a somewhat uneven course in explicating the rationale for and the extent to which the substantive component of the Due Process Clause of the Fourteenth Amendment protects landowners in disputes with local agencies empowered to limit the permissible uses of their property. Though appellate courts frequently invoke Justice Marshall's observation that the role of the Supreme Court (and presumably of every other federal court as well) “should not be to sit as a zoning board of appeals,” Village of Belle Terre v. Boraas, 416 U.S. 1, 13, 94 S.Ct. 1536, 1543, 39 L.Ed.2d 797 (1974) (Marshall, J., dissenting), their willingness to entertain a claim that a local land use regulator has acted arbitrarily or capriciously sometimes leads them to require trial courts to make an inquiry similar to the sort of determination that zoning boards of appeal routinely make.1

The initial effort to subject local land use decisions to constitutional scrutiny involved challenges to new zoning restrictions imposed upon property owners. The Supreme Court’s first consideration of such a challenge, though occurring in an era when substantive due process was often a formidable protection against governmental regulation, met with a significant rebuff. *915Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed.2d 303 (1926). The Supreme Court ruled that zoning regulations will survive substantive due process challenge unless they are “clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.” Id. at 395, 47 S.Ct. at 121. With the decline of substantive due process as a protection against economic regulation, zoning regulation continued easily to survive constitutional challenge. See Goldblatt v. Town of Hempstead, 369 U.S. 590, 82 S.Ct. 987, 8 L.Ed.2d 130 (1962). Pertinent to the later development of the case law concerning land use regulation is the fact that in the early zoning cases, there was no dispute as to whether the plaintiff had a property interest within the meaning of the Fourteenth Amendment; his property interest was in the land he owned, land that the local regulating body sought to restrict as to use.

The next phase of land regulation cases involved applications by property owners to obtain a change in existing zoning regulations. Denials of rezoning applications were challenged as a denial of property in violation of the substantive component of the Due Process Clause. Without pausing to focus on whether the property interest at stake was the land owned by the plaintiff or the zone change for which he was applying, courts generally rejected these challenges, applying the deferential standards of Euclid. An early rezoning application case in the District of Columbia Circuit, Leventhal v. District of Columbia, 100 F.2d 94, 95 (D.C.Cir.1938), expressly relied on Euclid, and subsequent rezoning cases in that Circuit simply cited Leventhal for the applicable standard, e.g., Lewis v. District of Columbia, 190 F.2d 25, 27 (D.C.Cir.1951), even in those rare instances where the denial of a rezoning application was held to be arbitrary and capricious, e.g., Skenk v. Zoning Commission, 440 F.2d 295, 297 (D.C.Cir.1971).

The analytical framework applicable to constitutional challenges to land regulation was affected by the Supreme Court’s 1972 decisions in Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), and Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). Though concerned with an interest in employment, rather than land, and the protection of procedural, rather than substantive, due process,2 both decisions were potentially pertinent to land regulation in their announcement that a property interest, within the meaning of the Fourteenth Amendment, includes not only what is owned but also, in some limited circumstances, what is sought. This expanded concept of property, however, requires more than “an abstract need or desire” or “a unilateral expectation” of what is sought. Board of Regents v. Roth, supra, 408 U.S. at 577, 92 S.Ct. at 2709. Instead, there must be “a legitimate claim of entitlement.” Id; see Perry v. Sindermann, supra, 408 U.S. at 601, 92 S.Ct. at 2699.

After 1972, some courts considering constitutional challenges to land regulation, began their inquiry by citing Roth and asking whether the plaintiff had a “clear entitlement” to the approval he was seeking from the land use regulating body. See Creative Environments, Inc. v. Estabrook, 680 F.2d 822, 831 (1st Cir.) (request for approval of subdivision plan; property interest assumed), cert. denied, 459 U.S. 989, 103 S.Ct. 345, 74 L.Ed.2d 385 (1982); United Land Corporation of America v. Clarke, 613 F.2d 497, 501 (4th Cir.1980) (request for approval of soil erosion permit; no protect-able interest “in the permit” because of discretionary authority in administrator). This same approach is reflected in Scott v. Greenville County, 716 F.2d 1409 (4th Cir.*9161983), one of the few decisions rejecting dismissal on summary judgment of a claim that a denial of approval for land use was arbitrary and capricious and hence a denial of substantive due process. In a thoughtful opinion by Chief Judge Winter, the Court inquired whether an applicant for a building permit had a “ ‘protective property interest in the permit’ sufficient to trigger federal due process guarantees.” Id. at 1418 (citing United Land Corporation of America v. Clarke, supra, 613 F.2d at 501). Chief Judge Winter concluded that the applicant had a clear entitlement to the permit under state law. In Scott, the applicant was not the owner of the property, although his option to purchase it would seem to have given him an interest that itself could have been considered “property” under the Due Process Clause. Chief Judge Winter characterized the interest in the applied for permit as a “ ‘species of property,’ ” id. at 1421 (quoting Logan v. Zimmerman Brush Co., 455 U.S. 422, 429, 102 S.Ct. 1148, 1154, 71 L.Ed.2d 265 (1982)), though he noted that it is not in the same category as property that is protected by the Fourteenth Amendment’s incorporation of the “takings” clause of the Fifth Amendment, id. & n. 20.

Many post-1972 land regulation decisions, however, have not pursued the Roth analysis in land regulation cases. Instead of inquiring as to the plaintiff’s degree of entitlement to what he sought, these decisions have implicitly assumed that the pertinent property interest is the property the plaintiff owns and simply examined whether the action of local regulators in denying an application for the proposed use of the land was arbitrary and capricious. This has occurred both in decisions rejecting substantive due process challenges, e.g., Burrell v. City of Kankakee, 815 F.2d 1127 (7th Cir.1987) (rezoning application); Pace Resources, Inc. v. Shrewsbury Township, 808 F.2d 1023, 1034-37 (3d Cir.) (development plan), cert. denied, 482 U.S. 906, 107 S.Ct. 2482, 96 L.Ed.2d 375 (1987); Chiplin Enterprises, Inc. v. City of Lebanon, 712 F.2d 1524 (1st Cir.1983) (building permit); Scudder v. Town of Greendale, 704 F.2d 999 (7th Cir.1983) (building permit); South Gwinnett Venture v. Pruitt, 491 F.2d 5 (5th Cir.) (in banc) (rezoning application), cert. denied, 419 U.S. 837, 95 S.Ct. 66, 42 L.Ed.2d 64 (1974), and in the few decisions upholding such claims, at least against a motion for summary judgment, e.g., Bello v. Walker, 840 F.2d 1124 (3d Cir.) (building permit), cert. denied, — U.S. -, 109 S.Ct. 134, 102 L.Ed.2d 107 (1988), or for dismissal for failure to state a claim, e.g., Altaire Builders, Inc. v. Village of Horseheads, 551 F.Supp. 1066 (W.D.N.Y.1982) (planned unit development application).3

Bello is a clear example of a court focusing exclusively on whether the local land use regulator acted arbitrarily and capriciously without inquiry as to whether the protected property interest is in the land the plaintiff owns and is seeking to use or in the permit he requires for his intended use; the Court extracted from prior cases, including those concerned with denial of equal protection, like Arlington Heights v. Metropolitan Development Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977), a general rule that “the deliberate and arbitrary abuse of government power violates an individual's right to substantive due process.” Bello v. Walker, supra, 840 F.2d at 1129. See Shelton v. City of College Station, 780 F.2d 475, 479 (5th Cir.) (in banc) (declining to determine whether property interest was in the right to seek a zoning variance or in the right to use the plaintiff’s property), cert. denied, 477 U.S. 905, 106 S.Ct. 3276, 91 L.Ed.2d 566 (1986).

*917Cordeco Development Corp. v. Santiago Vasquez, 539 F.2d 256 (1st Cir.), cert. denied, 429 U.S. 978, 97 S.Ct. 488, 50 L.Ed.2d 586 (1976), also made no inquiry as to the nature of the property interest at issue, although the plaintiff there framed his claim as a denial of equal protection, rather than a denial of property without substantive due process, 539 F.2d at 259. Chief Judge Winter’s opinion in Scott v. Greenville County, supra, however, expresses the view that Cordeco “fits more broadly into a line of cases addressing the substantive unfairness of the process by which governmental actors deprive a citizen of a protected interest,” 716 F.2d at 1420 n. 14, because “no recognized class-based or invidious discrimination was involved,” id. at 1420. See Cordeco Development Corp. v. Vasquez, supra, 539 F.2d at 260 n. 5 (separate views of Campbell, J.). Cordeco is one of the rare decisions in which a land regulation claim reached decision by a fact-finder (trial judge with an advisory jury).

In this Circuit, our post-Roth cases considering a landowner’s claim of a due process violation in the denial of an application for regulated use of his land have been significantly influenced by the Roth “entitlement” analysis. In Yale Auto Parts, Inc. v. Johnson, 758 F.2d 54 (2d Cir.1985), the landowner had been denied a permit to use his property for an automobile junkyard business. Expressly invoking Roth, Judge Mansfield focused initially on whether the landowner had “a legitimate claim of entitlement” to the license he sought and formulated the test for this inquiry to be that “absent the alleged denial of due process, there is either a certainty or a very strong likelihood that the application would have been granted.” Id. at 59. Finding that the licensing authorities had discretion in the issuance of the requested permit, the Court affirmed dismissal of the claim for lack of a protected property interest in the permit, even though the Court acknowledged that the allegations of the complaint alleged “egregious misconduct” by the defendants in the denial of the permit, id. at 59.

We have adhered to the property interest analysis of Yale Auto Parts both in finding a claimed interest in a land use application insufficient to constitute Fourteenth Amendment property, Dean Tarry Corp. v. Friedlander, 826 F.2d 210 (2d Cir.1987) (approval sought for municipal development plan), and in finding such an interest sufficient, at least for purposes of surviving summary judgment, Sullivan v. Town of Salem, 805 F.2d 81 (2d Cir.1986) (application for certificates of occupancy). Our latest decision in this area, though citing the entitlement test of Roth and our application of that test in Yale Auto Parts to the permit being sought, appears to have found the requisite property interest to be an aspect of the rights enjoyed by the plaintiff as owner of his property. Brady v. Town of Colchester, 863 F.2d 205 (2d Cir.1988). Brady is an unusual case, however, in that the owner was obliged by the local authorities to seek a permit for commercial use of his property, whereas his position was that his property was already zoned for commercial use, that no permit was required, and that the local decision obliging him to seek a permit was wholly unjustified.

It is not readily apparent why land regulation cases that involve applications to local regulators have applied the Roth entitlement test to inquire whether an entitlement exists in what has been applied for— whether a zoning variance, a business license, or a building permit — instead of simply recognizing the owner’s indisputable property interest in the land he owns and asking whether local government has exceeded the limits of substantive due process in regulating the plaintiff’s use of his property by denying the application arbitrarily and capriciously.4 As Justice Ste*918vens has observed, “the opportunity to apply for [a zoning amendment] is an aspect of property ownership protected by the Due Process Clause of the Fourteenth Amendment.” City of Eastlake v. Forest City Enterprises, Inc., 426 U.S. 668, 683, 96 S.Ct. 2358, 2366, 49 L.Ed.2d 132 (1976) (Stevens, J., with whom Brennan, J., joins, dissenting). Indeed, the entitlement inquiry will not often aid the analysis in this context. When a local regulator’s discretionary decision to deny an application is not arbitrary or capricious, the plaintiff will usually be deemed not to have a sufficient entitlement to constitute a protected property interest. On occasion, however, as Yale Auto Parts demonstrates, the plaintiff may be deemed not to have a protected property interest in the requested permit, even in a case where the denial of the permit is arbitrary. The fact that the permit could have been denied on non-arbitrary grounds defeats the federal due process claim. Focusing on the authority of the local regulator thereby permits the threshold rejection of some federal due process claims, without awaiting exploration of whether the regulator acted so arbitrarily as to offend substantive due process in the particular case. In any event, Yale Auto Parts and its progeny have committed this Circuit to the “entitlement” inquiry in land use regulation cases.

If federal courts are not to become zoning boards of appeals (and not to substitute for state courts in their state law review of local land-use regulatory decisions), the entitlement test of Yale Auto Parts — “certainty or a very strong likelihood” of issuance — must be applied with considerable rigor. Application of the test must focus primarily on the degree of discretion enjoyed by the issuing authority, not the estimated probability that the authority will act favorably in a particular case. See Walentas v. Lipper, 862 F.2d 414, 419 (2d Cir.1988); RR Village Ass’n, Inc. v. Denver Sewer Corp., 826 F.2d 1197, 1201-02 (2d Cir.1987); Sullivan v. Town of Salem, supra, 805 F.2d at 85. Yale Auto Parts rejected the claim of a property interest in the permit being sought because of the discretion of the local regulating body. Even if in a particular case, objective observers would estimate that the probability of issuance was extremely high, the opportunity of the local agency to deny issuance suffices to defeat the existence of a federally protected property interest. The “strong likelihood” aspect of Yale Auto Parts comes into play only when the discretion of the issuing agency is so narrowly circumscribed that approval of a proper application is virtually assured; an entitlement does not arise simply because it is likely that broad discretion will be favorably exercised. Since the entitlement analysis focuses on the degree of official discretion and not on the probability of its favorable exercise, the question of whether an applicant has a property interest will normally be a matter of law for the court.

II. Application of the Legal Standard

In the instant case, RRI argues that absent the alleged denial of due process, there was a “certainty or a very strong likelihood” that Village officials would have granted RRI’s application. RRI points to the ARB’s approval of RRI’s initial overall design and to the fact that stage-two construction was in full compliance with the zoning law. Moreover, there is correspondence between the Building In*919spector and RRI, as well as discussions between Romano, the Board of Trustees, and the ARB to support RRI’s assertion that approval of the application could be expected. Finally, RRI argues that since the ARB’s time limits within which to act on the application had expired, it forfeited any discretion it may have had and was required to approve the permit.

Our reading of Yale Auto Parts and its progeny leads us to reject RRI’s analysis. Even though there is evidence of officials’ statements that approval of the application was probably forthcoming, the fact remains that the ARB had discretion to deny RRI’s application for a stage-two permit. The Village Code confers wide discretion on the ARB in reviewing the final design plans:

The [ARB] is charged with the duty of exercising sound judgment and of rejecting plans which, in its opinion, are not of harmonious character because of proposed style, materials, mass, line, col- or....

Code, supra, § 116-33.B.

Indeed, there were several reasons for rejecting the application. The Village had virtually never before approved a partial building permit.5 Moreover, it is undisputed that the structure violated the height limit in the zoning variance that had been granted at the outset of construction. It was surely not a certainty nor a clear likelihood that state law would later be construed to require issuance of a permit notwithstanding that zoning noncompliance. In fact, when a further variance was sought to accommodate the height of the structure, it was rejected by the ZBA, and the state court denied relief. RRI Realty Corp. v. Hattrick, 132 A.D.2d 558, 517 N.Y.S.2d 284 (App.Div.2d Dep’t 1987). It is no answer for RRI to argue that a state court found the ARB to have exceeded its jurisdiction and ordered issuance of the stage-two permit. Prior to the Article 78 proceeding, there was no clear likelihood that the state court would deem issuance of a partial permit to be required.

RRI’s argument that the ARB forfeited its discretion by not acting on the application within the statutory thirty-day period, and thus was required to approve the permit, is also unavailing. It may be that on the thirty-first day, RRI was entitled to the permit, as a matter of state law, as the state court held. But RRI’s claim to the permit, as a matter of constitutional law, cannot be fragmented into two claims, one subject to the ARB’s discretion within thirty days and one subject to a mandatory duty to issue after thirty days. For purposes of a property interest under the Due Process Clause, the claim to the permit is indivisible. The ARB’s discretion to deny the permit during the thirty-day interval deprived RRI of a property interest in the permit, regardless of how unlawful under state law the ultimate denial may have been.

In sum, we conclude, based primarily on an assessment of the powers of the ARB as they pertain to the undisputed facts of this case, that in advance of the state court ruling it could not reasonably be found that RRI had an entitlement to the stage-two permit, sufficient to invoke the protection of the Due Process Clause. As a matter of law, there was no property interest in the permit. Though the issue was submitted to the jury and it found the requisite property interest, its attention had been improperly focused primarily on the probability that the permit would be issued without adequate consideration of the discretion en*920joyed by the issuing authority. The Village had unsuccessfully sought to redirect the jury’s attention in its requested instructions. Our concern, however, is not simply with the jury charge but with the insufficiency of the evidence to take the property interest issue to the jury. In view of our conclusion, we need not consider whether denial of the permit violated substantive due process or whether the denial was the result of a policy that would give rise to municipal liability under section 1983.

The judgment of the District Court is reversed, plaintiffs cross-appeal is dismissed, and the case is remanded with directions to enter judgment for the defendants.

. It has been observed, however, that the degree of scrutiny appropriate for federal courts in deciding whether local decision-making is arbitrary so as to violate the substantive due process component of the Fourteenth Amendment is less rigorous than that applied by state courts in determining whether such decision-making is arbitrary for purposes of violating state zoning law. See Pace Resources, Inc. v. Shrewsbury Township, 808 F.2d 1023, 1034 (3d Cir.), cert. denied, 482 U.S. 906, 107 S.Ct. 2482, 96 L.Ed.2d 375 (1987); Shelton v. City of College Station, 780 F.2d 475, 482-83 (5th Cir.) (in banc), cert. denied, 477 U.S. 905, 106 S.Ct. 3276, 91 L.Ed.2d 566 (1986).

. In addition to claiming denial of procedural due process, the plaintiffs in Roth and Perry both alleged that they had been denied employment for exercise of their First Amendment free speech rights. Neither case, however, involved a claim that a property interest had been denied by action so arbitrary as to violate the substantive component of due process.

. Cf. Barbian v. Panagis, 694 F.2d 476 (7th Cir.1982), which rejected a claim by a property owner that granting an adjacent property owner a variance from noise ordinance violated due process requirements. In Barbian, the property interest of the plaintiff for purposes of the substantive due process inquiry was his ownership interest, see id. at 480-82; for purposes of the procedural due process inquiry, plaintiffs property interest in a noise-free setting was assumed, though acknowledged not to be clear, id. at 488 n. 10.

. The analytical framework for constitutional claims by plaintiffs denied requested uses of their land could be analogized to that applicable to plaintiffs denied licenses required for pursuing a particular occupation. The latter have a liberty interest in earning a livelihood and are *918normally not required to show an entitlement to the license they seek in order to state a claim; their liberty interest is impaired if their license application is arbitrarily denied. See Wilkerson v. Johnson, 699 F.2d 325 (6th Cir.1983). One land use regulation case has explicitly relied on occupational licensing cases at least to supply content to the substantive due process standard, if not to the nature of the interest being protected, see Scott v. Greenville County, supra, 716 F.2d at 1420, though another land use case has explicitly rejected the analogy, see South Gwinnett Venture v. Pruitt, supra, 491 F.2d at 7 n. 1 ("Whatever vitality remains in Hornsby [v. Allen, 326 F.2d 605 (5th Cir.1964) (application for retail liquor store license)] ..., its holding will not be extended to zoning cases.”).

. The chairman of the ARB testified without contradiction that the ARB had never approved "part of a house as distinguished from a whole house.” The Building Inspector acknowledged that in the past he had "possibly” issued a permit for a foundation so that work could proceed in advance of inclement weather, but the evidence is undisputed that no partial permits had been issued for a portion of structures, the remainder of which was not in conformity with code requirements. The stage-one permit for a kitchen, relied on by RRI, is not to the contrary, since that permit did not contemplate that other work would eventually be performed.