United States Court of Appeals
For the First Circuit
No. 04-2587
SFW ARECIBO, LTD. and FW ASSOCIATES, LTD.,
Plaintiffs, Appellants,
v.
ANGEL D. RODRÍGUEZ; WANDA CAPÓ; WANDA MARRERO; FREDERICK MUHLACH,
in his personal and official capacity as a member of the Planning
Board of Puerto Rico; FERNANDO FÉLIX, in his personal and
official capacity as a member of the Planning Board of Puerto
Rico; and NELSON VÉLEZ, in his personal and official capacity as
a member of the Planning Board of Puerto Rico,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Boudin, Chief Judge,
Lynch and Lipez, Circuit Judges.
Rubén T. Nigaglioni, with whom Nigaglioni & Ferraiuoli Law
Offices, PSC was on brief, for appellants.
Irene S. Soroeta-Kodesh, Assistant Solicitor General, with
whom Salvador J. Antonetti Stutts, Solicitor General, and Mariana
D. Negrón Vargas, Deputy Solicitor General, were on brief, for
appellees.
July 14, 2005
LIPEZ, Circuit Judge. This appeal arose from a dispute
over a land use permit for the development of a shopping center in
Arecibo, Puerto Rico. Two real estate developers sued members of
the Puerto Rico Planning Board in the United States District Court
for the District of Puerto Rico pursuant to 42 U.S.C. § 1983,
alleging that the Planning Board, which reviews proposed
development projects throughout the Commonwealth, violated various
provisions of the United State Constitution when it erroneously
determined that the developers' land use permit had expired without
the commencement of "actual and effective construction."1 The
district court dismissed the complaint pursuant to Fed. R. Civ. P.
12(b)(6) for failure to state a claim. The developers filed a
timely appeal. Seeing "nothing in the present case to distinguish
it sufficiently from the usual land developer's claim under state
law to warrant recognition of a federal constitutional question,"
Creative Env'ts, Inc. v. Estabrook, 680 F.2d 822, 833 (1st Cir.
1982), we affirm.
I.
The appellants, real estate developers SFW Arecibo Ltd.
Partnership and FW Associates Ltd. Partnership ("Developers"), are
1
Puerto Rico law defines "actual and effective construction"
-- or, as the parties refer to it, "real and effective
construction" -- as "the commencement of the works of urbanization
and the construction of a permanent structure on the land, that is
to say, any work done beyond the stage of excavation." 23 P.R.
Laws Ann. § 62o.
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constructing a shopping center in Arecibo, Puerto Rico. The
Planning Board approved a preliminary development plan for the
project on August 26, 1996, and issued a land use permit that
required the Developers to begin actual and effective construction
by December 16, 1998. Once the permit was issued, the Developers
had to apply to the Puerto Rico Permits and Regulations
Administration ("ARPE") for specific construction permits.
On November 16, 1998, the Developers requested that the
Planning Board extend the deadline by which actual and effective
construction had to begin. The request was denied on December 9,
1998. Nevertheless, the Developers obtained the relevant permits
from the ARPE and began to excavate and lay foundations before the
December 16, 1998 deadline for commencement of actual and effective
construction. The ARPE agreed that the Developers had met the
deadline and continued to issue permits for the project.
On January 27, 2003, the Developers requested that the
Planning Board clarify whether the original land use permit would
allow for the building of a Home Depot store in the shopping
center. The Planning Board denied the request for clarification on
February 21, 2003, explaining that the land use permit had expired
on December 16, 1998 because the Developers had not commenced
actual and effective construction by that deadline. The Planning
Board also informed the ARPE that the underlying land use permit
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had expired, and thus that it could no longer issue construction
permits for the Developers' project.
On July 3, 2003, the Developers appealed to the Puerto
Rico Court of Appeals for administrative review of the Planning
Board's decision. The Puerto Rico appellate court sided with the
Developers, ruling on August 25, 2004 that the Planning Board's
decision was erroneous and that the Board's actions violated the
Developers' ownership rights as set forth in the Puerto Rico
Constitution. FW Assocs. v. Junta de Planificación, No. KLRA-03-
00476 (P.R. Ct. App. Aug. 25, 2004). The Puerto Rico appellate
court's decision is currently pending before the Puerto Rico
Supreme Court.
Not content to limit their claims to the courts of Puerto
Rico, the Developers also filed a § 1983 action against members of
the Planning Board in federal district court on September 5, 2003.
In their federal complaint, the Developers alleged that the
Planning Board's erroneous revocation of the land use permit
violated their rights under the Takings, Due Process, and Equal
Protection Clauses of the federal Constitution.2 The Planning
2
The Fifth Amendment Takings Clause provides that "private
property [shall not] be taken for public use, without just
compensation." U.S. Const. amend. V. This clause applies to the
states under the Fourteenth Amendment. See Pascoag Reservoir &
Dam, LLC v. Rhode Island, 337 F.3d 87, 92 n.4 (1st Cir. 2003),
cert. denied, 540 U.S. 1090 (2003). The Fourteenth Amendment Due
Process and Equal Protection Clauses provide that "[no] State
[shall] deprive any person of life, liberty, or property, without
due process of law; nor deny to any person within its jurisdiction
-4-
Board responded by filing a motion to dismiss the complaint for
failure to state a claim. See Fed. R. Civ. P. 12(b)(6).
The Developers failed to reply to the 12(b)(6) motion
within the time allotted. Several days after the deadline had
passed, the Developers requested an extension of time to file their
opposition. On January 12, 2004, the district court denied the
request for an extension and deemed the motion to dismiss
unopposed. The district court subsequently issued an opinion and
order dismissing the case pursuant to Rule 12(b)(6). The court's
ruling rested solely on our precedent in PFZ Properties, Inc. v.
Rodriguez, 928 F.2d 28 (1st Cir. 1991), because that case, in the
court's view, "resolved a controversy nearly identical to the one
present in the instant case." SFW Arecibo, Ltd. v. Rodriguez, No.
03-1970 (D.P.R. Sept. 22, 2004).
II.
We review a district court's grant of a motion to dismiss
de novo. Greene v. Rhode Island, 398 F.3d 45, 48 (1st Cir. 2005).3
the equal protection of the laws." U.S. Const. amend. XIV, §1.
3
Emphasizing that the Developers failed to oppose the motion
to dismiss in the district court, the appellees assert that the
Developers have waived their substantive claims on appeal. The
Developers respond that the district court granted the motion to
dismiss based substantially on arguments not raised in the motion
itself, and therefore that they could not have been expected to
raise the claims in the district court that they advance on appeal.
While it is true that the Developers could have raised these claims
in a post-judgment motion, we will not treat their failure to do so
as a waiver in this case. See United States v. LaGuardia, 902 F.2d
1010, 1013 (1st Cir. 1990) (explaining that an appellate court may
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In so doing, we accept as true the well-pleaded factual allegations
of the complaint, drawing all reasonable inferences in the non-
movants' favor. Id.
A. Takings Claim
The Developers assert that the Planning Board's erroneous
determination that their permit expired without the commencement of
actual and effective construction amounted to a taking of private
property without just compensation, thereby violating the Fifth and
Fourteenth Amendments to the United States Constitution. This
claim is premature. It is well-settled that "if a State provides
an adequate procedure for seeking just compensation, the property
owner cannot claim a violation of the Just Compensation Clause
until it has used the procedure and been denied just compensation."
Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank of Johnson
City, 473 U.S. 172, 195 (1985). Adequate procedures for seeking
just compensation are available under Puerto Rico law. See Deniz
v. Mun. of Guaynabo, 285 F.3d 142, 146-47 (1st Cir. 2002)
(concluding that Puerto Rico case law recognizes an inverse
condemnation remedy by which property owners can seek just
compensation). Because the Developers have not sought just
compensation through those state law procedures, their complaint
does not state a valid federal takings claim. See id. at 149 ("A
relax the raise-or-waive rule under certain circumstances).
Instead, we will follow the lead of the district court and address
the Developers' claims on their merits.
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plaintiff's failure to exhaust the inverse condemnation remedy
renders premature a section 1983 damages action predicated upon an
alleged takings violation.").
B. Procedural Due Process Claim
To establish a procedural due process claim under § 1983,
a plaintiff "must allege first that it has a property interest as
defined by state law and, second, that the defendants, acting under
color of state law, deprived it of that property interest without
constitutionally adequate process." PFZ Prop., 928 F.2d at 30.
Here, the Developers assert that the Planning Board violated their
procedural due process rights when it determined that the land use
permit had expired and revoked it without notice or a hearing.
That assertion is misguided. If the Developers have a
property interest in the land use permit (we assume arguendo that
they do), the post-deprivation process available to them under
Puerto Rico law is a constitutionally adequate protection for that
interest.
The Developers do not challenge the adequacy of the
permitting procedures established by Puerto Rico law. Instead,
they allege that the Planning Board illegally revoked their land
use permit without jurisdiction to do so. We rejected an analogous
due process claim in PFZ Properties, explaining that in this
context, our focus is on the availability of post-deprivation,
rather than pre-deprivation, process:
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When a deprivation of property results from conduct of
state officials violative of state law, the Supreme Court
has held that failure to provide pre-deprivation process
does not violate the Equal Protection Clause. . . . The
state is not required to anticipate such violations of
its own constitutionally adequate procedures. To hold
otherwise would convert every departure from established
administrative procedures into a violation of the
Fourteenth Amendment, cognizable under § 1983. . . .
[T]he only question is whether the post-deprivation
process available to [the plaintiff] is adequate.
Id. at 31 (internal citations omitted). We went on to hold that
"the combination of administrative and judicial remedies provided
by Puerto Rico law is sufficient to meet the requirements of due
process." Id.
The post-deprivation process that we found adequate in
PFZ Properties included the right to petition the administrative
agency for reconsideration and to seek judicial review in the
courts of Puerto Rico. Id. The same procedures for review were
available in this case. The Developers petitioned the Planning
Board to reconsider its ruling. It then sought judicial review
before the Puerto Rico Court of Appeals, which ruled in its favor.
That ruling is now pending before the Puerto Rico Supreme Court.
A holding that the Developers had a federal procedural due process
claim on these facts would contravene our case law. See id. at 31;
see also Nestor Colon Medina & Sucesores, Inc. v. Custodio, 964
F.2d 32, 40 (1st Cir. 1992).
The Developers nevertheless attempt to distinguish PFZ
Properties on several grounds, none of which is persuasive. First,
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they contend that "the plaintiff in [PFZ Properties] claimed an
entitlement to a construction permit that was never issued and over
which the plaintiff never acquired a vested property interest
[while] this case deals with permits that were issued and revoked
after the Developers had effectively acquired a vested right."
This point is inapposite. Although the PFZ Properties court was
skeptical of the plaintiff's claimed property interest, it assumed
arguendo that the plaintiffs did have such an interest and that the
agency's actions had deprived it of that interest. See 928 F.2d at
31. PFZ Properties turned not on the nature of the developer's
property right, but on the availability of post-deprivation
process. Id. Nowhere in the opinion did we suggest that the
constitutional standard by which we judge the adequacy of post-
deprivation relief varies with the strength of the plaintiff's
claimed property interest.
The Developers also assert that PFZ Properties is
distinguishable because here, "the Planning Board could have,
should have, and must have provided the Developers with a hearing
prior to revoking the land use permit over which they had a vested
property right." The logic of this claim is not clear. Even if
the Planning Board should have provided the Developers with a
hearing in this case (a judgment we do not make), the alleged
deprivation of property, as in PFZ Properties, "results from
conduct of state officials violative of state law." Id. The
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Developers concede as much elsewhere in their brief, acknowledging
that "since . . . the Planning Board acted ultra vires [when it
revoked the permit], there really is no process that could have
been afforded to safeguard the Developers' constitutional rights."
As in PFZ Properties, then, the only question is whether adequate
post-deprivation process was available to the plaintiffs. We agree
with the district court that adequate post-deprivation process was
available here in the form of administrative and judicial review of
the Planning Board's decision. The plaintiffs have not stated a
procedural due process claim upon which relief can be granted.
C. Substantive Due Process
Asserting that the Planning Board acted without
jurisdiction when it revoked the permit and that it improperly
usurped ARPE's jurisdiction by restraining that agency from
granting any additional permits,4 the Developers also claim a
violation of their substantive due process rights. This claim,
too, is foreclosed by PFZ Properties and subsequent case law.
In PFZ Properties, we explained the standard for
establishing a substantive due process violation in the land use
permitting context:
4
According to the Developers, "the Planning Board warned ARPE
that it could proceed no further, i.e., that it could not issue
further permits, since the Land Use Permit expired on December 16,
1998 without the Developers having engaged in '[actual] and
effective' construction."
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This Court has repeatedly held . . . that rejections of
development projects and refusals to issue building
permits do not ordinarily implicate substantive due
process. Even where state law officials have allegedly
violated state law or administrative procedures, such
violations do not ordinarily rise to the level of a
constitutional deprivation. The doctrine of substantive
due process does not protect individuals from all
[governmental] actions that infringe liberty or injure
property in violation of some law. Rather, substantive
due process prevents governmental power from being used
for purposes of oppression, or abuse of government power
that shocks the conscience, or action that is legally
irrational in that it is not sufficiently keyed to any
legitimate state interests.
Id. at 31-32 (internal citations and quotation marks omitted)
(brackets in original). Although "[w]e have left the door slightly
ajar for federal relief in truly horrendous situations, . . . . the
threshold for establishing the requisite 'abuse of government
power' is a high one indeed." Colon, 964 F.2d at 45.
The Developers' allegations concerning the Planning
Board's determination that the permit expired without the
commencement of actual and effective construction do not state a
substantive due process violation under this standard. In its
strongest form, the Developers' claim is essentially that the
Planning Board made an erroneous decision in violation of state
law. This claim is indistinguishable from the one we rejected in
PFZ Properties. See 928 F.2d at 32 (holding that "PFZ's
allegations that ARPE officials failed to comply with agency
regulations or practices in the review and approval process for the
construction drawings are not sufficient to support a substantive
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due process claim"); see also Licari v. Ferruzzi, 22 F.3d 344, 349
(1st Cir. 1994) (rejecting a substantive due process claim based on
allegations that a town planning board improperly revoked the
developer's building permits and delayed processing and approval of
an application for an amended permit). We agree with the district
court that the plaintiffs have not stated a substantive due process
claim upon which relief can be granted.
D. Equal Protection
Finally, the Developers recast the permit revocation as
an equal protection violation. Emphasizing that laying a
foundation ordinarily qualifies as actual and effective
construction, the Developers point out that the Planning Board
determined in this case that the Developers had not commenced
actual and effective construction by December 16, 1998 despite the
fact that they had begun laying a foundation. The Developers
reason that by determining that laying a foundation did not
constitute actual and effective construction, the Planning Board
"treated them differently than all others who are similarly
situated" in contravention of the Fourteenth Amendment Equal
Protection Clause. We disagree.
Although a land use dispute may give rise to an equal
protection claim in extreme circumstances, see Colon, 964 F.2d at
44, such circumstances are not present here. The Developers allege
no facts that suggest invidious discrimination based on a
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prohibited category such as race or sex, nor have they pointed to
an egregious procedural irregularity or abuse of power that might
constitute a federal equal protection violation. See id. They
assert only that they were treated differently from other
individuals who lay a foundation before a permit deadline for the
commencement of actual and effective construction. That
allegation, however, "represents nothing more than a claim that
[the permitting agency] departed from its own procedures or those
provided by Puerto Rico law." PFZ Props., 928 F.2d at 32. Absent
facts reflecting more fundamental discrimination, the plaintiffs
have not stated a claim under the Equal Protection Clause of the
Fourteenth Amendment.
Affirmed.
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