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Cherry Hill Towers, L.L.C. v. Township of Cherry Hill

407 F. Supp.2d 648 (D. N.J. 2006)

DEVELOPERS; PERMITS; DUE PROCESS—To prevail on a substantive due process claim that a government official has improperly denied construction permits, a developer must show that the official’s actions shocked the conscience, not merely that the official had an improper motive.

A developer purchased a site and submitted its applications for construction permits. Approximately four weeks later, the subcode official called the developer to say that the construction permits were ready and available for pick up. The next day, the developer met with union representatives and told them that because the union contractor’s bid was several million dollars in excess of other bids, the developers were going to award the project to non-union construction companies. Later that same day, the subcode official called the developer and advised not to pick up the permits. Nonetheless, the developer went to the subcode official’s office and was advised the permits were not ready because of outstanding code compliance issues. For the next several weeks, the developer and the subcode official exchanged letters regarding the outstanding code compliance issues. A stop work order was issued after the subcode official learned that the developer was moving materials onto the site in anticipation of the grant of the construction permits. The developer appealed the denial of the construction permits and of the issuance of the stop work order to the county construction board. The municipal subcode official chaired the county board. The county board never heard the appeal because the subcode official released the construction permits prior to the hearing date. The developer then filed a Section 1983 complaint alleging that the delay in issuing the construction permits was: (1) arbitrary, irrational, and tainted by improper motive in violation of 14th Amendment substantive due process rights; (2) in violation of 14th Amendment procedural due process rights; (3) contrary to the equal protection rights of the 14th Amendment; and (4) a tort of interference with contract and prospective economic advantage. The municipality moved for summary judgment.

To prevail on its substantive due process claim in the context of a municipal land use decision, the developer needed to show that it had a property interest protected by due process, and that the municipality’s deprivation of that property interest shocked the conscience. The Court held that as the owner of the site subject to redevelopment, the developer had a property interest protected by due process. However, it also held that to prove that a municipality’s actions shocked the conscience, more than an improper motive by the subcode official is required. Only the most egregious official misconduct will amount to an action that shocks the conscience. In response to the developer’s claim that the subcode official withheld issuing the permits to pressure the developer to use unionized labor, the Court refused to decide whether the developer’s applications were improperly denied. The Court reasoned it is not a “super zoning tribunal.”

The developer contended that its procedural due process rights were violated when the subcode official failed to render a decision within twenty days of the developer’s construction permit applications. The Court ruled that such failure to render a decision was not a violation of due process because the statute provides that a failure to render a decision within twenty days is considered a denial. The developer further claimed that the subcode official blocked its appeal by scheduling the county board meeting more than a month after the appeal was filed. The Court ruled that because the subcode official issued the construction permits prior to the hearing date, this was not a procedural due process violation.

For the developer to succeed on its equal protection claim, the Court required a showing that the subcode official acted irrationally or wholly arbitrary. It found no supporting evidence.

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