Development

United States Court of Appeals

Second Circuit

(Opinion by Calabresi, J.).

In an action by lessee of space used as a sports and recreation complex alleging that the town board violated its federal constitutional rights by revoking a special use permit, lessee appealed from the District Court's award of summary judgment to the town. The Second Circuit reversed and reinstated lessee's substantive due process claim, concluding that allegations of racial animus were based on sufficient evidence to preclude summary judgment.

Lessee entered into a ten-year lease of a building that had previously housed a Caldor's store. Lessee sought a special-use permit to convert the property into a sports and recreation center which was to include a teen dance club, an indoor skate park, a roller skating rink, and a gymnastics room. The town board approved the permit, and lessee spent $2.3 million renovating the site. Within months after the center's opening, an unusually large number of young people arrived at the center, apparently to attend a teen dance. The large crowd was attributable in part to a power failure at a movie theater located about a mile away. Crowd control issues require 41 police cars to respond to the scene and to assist with evacuation of the site. Within the ensuing weeks, several board members made statements that could be construed as demonstrating racial bias. The town supervisor wrote a letter complaining that lessee's advertising sought to draw teens 'who live within the city limits' and others made similar statements. Within a month, the town board amended the special permit to prohibit teen dances. The amendment allegedly crippled the center, leading to its closure and to the lessee's personal bankruptcy. Lessee then brought this action alleging due process and equal protection violations. The district court, acting through a magistrate judge, dismissed the action, and lessee appealed.

In reversing to reinstate the substantive due process claim, the Second Circuit first held that lessee's permit, together with its investment in reliance on that permit, gave lessee a property interest protected by the due process clause. The court then turned to the allegations of racial animus, and held indicated that a plaintiff advancing a substantive due process claim need not demonstrate that a majority of the relevant board acted with unconstitutional motives. Instead, the court suggested that if a plaintiff proffers evidence that strongly suggests that racial animus was a factor in a board's decision, the board bears the burden of establishing that a majority acted with permissible motives. The court noted that in this case, there were significant allegations that a majority of the board acted with racial animus, making it unnecessary to determine whether allegations of animus by a minority would be sufficient to shift the burden of proof to the board. Hence, the court held that lessee was entitled to bring its substantive due process claim to trial.

Racial Animus Precludes Summary Judgment In Special Permit Revocation Case

Cine SK8, Inc. v. Town of Henrietta

NYLJ 11/15/07, p. 28, col. 3

United States Court of Appeals

Second Circuit

(Opinion by Calabresi, J.).

In an action by lessee of space used as a sports and recreation complex alleging that the town board violated its federal constitutional rights by revoking a special use permit, lessee appealed from the District Court's award of summary judgment to the town. The Second Circuit reversed and reinstated lessee's substantive due process claim, concluding that allegations of racial animus were based on sufficient evidence to preclude summary judgment.

Lessee entered into a ten-year lease of a building that had previously housed a Caldor's store. Lessee sought a special-use permit to convert the property into a sports and recreation center which was to include a teen dance club, an indoor skate park, a roller skating rink, and a gymnastics room. The town board approved the permit, and lessee spent $2.3 million renovating the site. Within months after the center's opening, an unusually large number of young people arrived at the center, apparently to attend a teen dance. The large crowd was attributable in part to a power failure at a movie theater located about a mile away. Crowd control issues require 41 police cars to respond to the scene and to assist with evacuation of the site. Within the ensuing weeks, several board members made statements that could be construed as demonstrating racial bias. The town supervisor wrote a letter complaining that lessee's advertising sought to draw teens 'who live within the city limits' and others made similar statements. Within a month, the town board amended the special permit to prohibit teen dances. The amendment allegedly crippled the center, leading to its closure and to the lessee's personal bankruptcy. Lessee then brought this action alleging due process and equal protection violations. The district court, acting through a magistrate judge, dismissed the action, and lessee appealed.

In reversing to reinstate the substantive due process claim, the Second Circuit first held that lessee's permit, together with its investment in reliance on that permit, gave lessee a property interest protected by the due process clause. The court then turned to the allegations of racial animus, and held indicated that a plaintiff advancing a substantive due process claim need not demonstrate that a majority of the relevant board acted with unconstitutional motives. Instead, the court suggested that if a plaintiff proffers evidence that strongly suggests that racial animus was a factor in a board's decision, the board bears the burden of establishing that a majority acted with permissible motives. The court noted that in this case, there were significant allegations that a majority of the board acted with racial animus, making it unnecessary to determine whether allegations of animus by a minority would be sufficient to shift the burden of proof to the board. Hence, the court held that lessee was entitled to bring its substantive due process claim to trial.