Second Circuit Erects Barriers to Due Process When Challenging Permit Denials

Although the federal constitution protects against deprivation of property without due process, the Second Circuit and federal district courts have erected significant barriers to dues process claims by landowners who challenge municipal permit denials or revocations. Arizona Hudson Valley, LLC v. Allen, 2023 WL 3936640, illustrates three of those barriers: ripeness, the narrow definition of property for due process purposes, and the outrageous governmental conduct courts require to sustain a due process claim.

The Arizona Hudson Valley Facts

A developer purchased a resort property with the intention of redeveloping and expanding the site. The developer received site plan approval and a special use permit. Disgruntled neighbors then brought a state court challenge, contending that there were questions about the use category that applied to the proposed plan. The New York State Supreme Court granted the petition in part, holding that the planning board had acted on an unclear record in granting the permit. The court remanded to the board, which again granted the permit. One of the neighbors brought a second Article 78 challenge, and while the challenge was pending, the local political landscape shifted. The town building inspector revoked the special use permit and the town created a zoning task force to suggest legislation to the town board. The developer appealed the permit revocation, but the appeal languished in the zoning board of appeals for six months, allegedly to allow time for enactment of new legislation that would block the development. At that point, the developer brought a federal action in the Norther District of New York under 42 USC §1983, contending that the town had violated its procedural and substantive due process rights. The town moved to dismiss for failure to state a claim.

Ripeness

In dismissing developer's claim, Judge Dennis Hurd concluded that the claim was unripe because developer had not received a final decision on its permit application. Because the developer's appeal was still pending before the zoning board of appeals, the claim would only be ripe if the developer could establish that pursuing the appeal or seeking a variance would be futile. The court held, however, that mere hostility by local officials was not enough to satisfy the futility requirement, and emphasized that a "relatively short time has passed" since the developer processed its appeal.