Property v . Town of Derry, et a l . 08-CV-270-JD 11/18/08 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Property Portfolio Group, LLC
v. Civil N o . 08-cv-270-JD Opinion N o . 2008 DNH 200 Town of Derry, Robert Mackey, George Sioras and John Does 1-20
O R D E R
The plaintiff, Property Portfolio Group, LLC (“PPG”),
brought suit in state court against the town of Derry, New
Hampshire; Robert Mackey, Derry’s Code Enforcement Officer;
George Sioras, Derry’s Planning Director, and John Doe
defendants, alleging state law claims and constitutional claims
under 42 U.S.C. § 1983. The defendants removed the case to this
court and moved to dismiss PPG’s amended complaint. PPG objects.
Standard of Review
In considering a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6), the court assumes the truth of the
well-pleaded facts, taking them in the light most favorable to
the non-moving party. Thomas v . Rhode Island, 542 F.3d 9 4 4 , 948
(1st Cir. 2008). Although a plaintiff need not provide detailed
factual allegations to survive a motion to dismiss, “a
plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will
not do.” Bell Atl. Corp. v . Twombly, 127 S . C t . 1955, 1964-65
(2007) (internal quotation marks and brackets omitted); see also
Erickson v . Pardus, 127 S . C t . 2197, 2200 (2007); accord Thomas,
542 F.3d at 948. A plaintiff’s allegations, therefore, must demonstrate “a plausible entitlement to relief,” Thomas, 542 F.3d
at 948 (internal quotation marks omitted), and must “give the
defendant fair notice of what the claim is and the grounds upon
which it rests,” Erickson, 127 S . C t . at 2200 (internal quotation
marks and ellipsis omitted).
Background
The following facts are taken from PPG’s first amended
complaint (document n o . 1 4 ) . PPG owns a multi-family residential
building at 7 Central Street in Derry, New Hampshire. The
property is zoned within the central business district, which
requires a residential buffer zone between abutting non-
residential and residential uses. The property at 7 Central
Street is abutted on the north by 32 West Broadway, and on the
south by 9 Central Street. The town’s fire station was located
at 32 West Broadway until 2004, when the town sold the property.
A residence was located at 9 Central Street until 1997, when its
owner, The Halcyon Club (“Halcyon”), razed the building and
2 converted the property into a parking lot. A buffer was never
installed on that portion of 9 Central Street which abutted 7
Central Street when the parking lot was created.
In 2005, PPG requested that Robert Mackey, the town’s Code
Enforcement Officer, enforce the buffer requirement between PPG’s
property and 9 Central Street. Mackey refused, and PPG appealed his decision to the town’s Zoning Board of Adjustment (“ZBA”).
The ZBA refused to hear the case, finding that it lacked
jurisdiction. PPG alleges that it appealed to the Rockingham
Superior Court, which remanded the case back to the ZBA, ordering
it to grant PPG a hearing on the buffer issue.1
On remand, the ZBA upheld Mackey’s refusal to require a
residential buffer, and PPG again appealed to the superior court.
PPG alleges that the court remanded the case to the ZBA a second
time, ordering it to require Halcyon to install a buffer on the portion of its property which abuts 7 Central Street. Halcyon
appealed to the New Hampshire Supreme Court, which PPG alleges
affirmed the superior court’s decision in an unpublished opinion.
1 Many of the decisions of the New Hampshire courts in this case are unpublished and were not provided to the court. PPG makes several representations regarding the outcomes of these cases, representations which the defendants do not dispute in their motion to dismiss. For purposes of the motion to dismiss only, the court accepts the holdings of the state court decisions as stated by PPG in its amended complaint.
3 PPG then filed a motion for contempt, and the ZBA instructed
Mackey to enforce the 20-foot buffer requirement on 9 Central
Street. Halcyon installed the buffer, which was less than 20
feet and did not provide for sufficient erosion control. In
installing the buffer, Halcyon caused damage to PPG’s property.
PPG filed a second motion for contempt with the superior court.2 PPG alleges that Halcyon has indicated that it intends to seek “a
waiver of the court orders” before the town’s planning board.
Amended Complaint (“Amend. C . ” ) , ¶ 4 0 .
In 2004, the town charged George Sioras, the town’s Planning
Director, with finding a buyer for 32 West Broadway. Hall
Business Restorations, LLC (“Hall”) offered to purchase the
property for the purposes of operating a bar and restaurant. The
property, however, could not accommodate parking for the proposed
use, and Halcyon agreed to allow Hall to use the parking lot at 9 Central Street. In May of 2005, the town’s planning board
granted Hall approval to use 32 West Broadway as a bar and
restaurant, based upon Sioras’s recommendation. Approval was
conditioned upon Hall submitting a landscape plan which provided
for a residential buffer between 32 West Broadway and 7 Central
Street. In September of 2005, after the sale of 32 West Broadway
2 PPG alleges that a hearing was held on its motion before the superior court on September 2 6 , 2008. The parties have not informed the court of the outcome of this hearing.
4 was completed, Hall removed the existing natural buffer between
its property and 7 Central Street and did not install a
residential buffer in its place.
PPG filed a petition in Rockingham Superior Court against
the town, challenging the planning board’s approval of Hall’s
proposal. The court dismissed PPG’s petition for lack of jurisdiction because the petition was filed outside the 30-day
deadline for an appeal of a planning board decision. See N.H.
Rev. Stat. Ann. 677:15. The New Hampshire Supreme Court affirmed
the superior court’s decision. See Property Portfolio Group, LLC
v . Town of Derry, et a l . (“Portfolio I ” ) , 154 N.H. 6 1 0 , 613
(2006). During this time, PPG brought a separate enforcement
action against Hall in Hillsborough Superior Court. The court
dismissed the case, citing the Supreme Court’s decision in
Portfolio I . PPG appealed, and in an unpublished decision, the Supreme Court reversed and remanded the case to the superior
court on the ground that the issue in Portfolio I was limited to
the planning board’s approval of Hall’s proposal.
On May 1 3 , 2008, the superior court issued an order
requiring Hall and its successors to immediately install a 20-
foot buffer. This decision was not appealed. Wells Fargo
Foothill/Avatar Income Fund, LLC (“Wells Fargo”) is Hall’s
successor and an intervener in the state court proceedings. PPG
alleges that Wells Fargo contacted the defendants to discuss
5 obtaining a variance from the buffer requirement. Wells Fargo
failed to install the buffer, and PPG filed a motion for contempt
with the superior court.3 PPG alleges that it also requested
Mackey to enforce the buffer requirement against Wells Fargo.
Mackey did not respond, and PPG appealed to the ZBA. The ZBA
found that it lacked jurisdiction to hear the case, and PPG appealed to the superior court.4
On May 2 0 , 2008, PPG filed suit against the defendants in
Rockingham Superior Court (Case N o . 08-C-429), alleging state and
federal law claims. The defendants removed the case to this
court on July 7 , 2008, and PPG filed an amended complaint on
September 4 , 2008. PPG’s amended complaint alleges that the
defendants allowed the owners of 32 West Broadway to remove the
natural buffer between the property and 7 Central Street, dump
rubble up to and over the boundary line with 7 Central Street, install a utility pole on the property line in front of the door
to an apartment on 7 Central Street, store snow on the property
in such a way as to cause run-off onto 7 Central Street, install
inadequate drainage, and locate a dumpster within a few feet of
the boundary line. PPG also alleges that the defendants refused
3 PPG does not explain what happened in the superior court on its motion for contempt. 4 PPG has not explained what happened in the superior court after this point.
6 to enforce a buffer on 9 Central Street and allowed Halcyon to
park vehicles along the boundary of the property with 7 Central
Street.
Discussion
In its amended complaint, PPG alleges state law claims of
trespass, negligence, and inverse condemnation. Its federal
claim is brought pursuant to § 1983. The defendants move to
dismiss the § 1983 claim on the grounds that PPG failed to allege
a municipal custom or practice to support its claim against
Derry, that PPG failed to allege the lack of a post deprivation
remedy in support of its procedural due process claim, that the
allegations do not support a substantive due process claim, that
PPG has not alleged an equal protection violation, and that PPG
failed to allege an unconstitutional taking. The defendants
argue that PPG’s state law claims must be dismissed because they
were adjudicated in state court and are therefore barred by res
judicata.
I. Federal Claims
Count four of PPG’s amended complaint asserts a § 1983 claim
against the defendants. 42 U.S.C. § 1983, in and of itself,
“does not endow plaintiffs with any substantive rights.” Clark
v . Boscher, 514 F.3d 1 0 7 , 112 (1st Cir. 2008). To recover under
7 § 1983, the plaintiff must prove that it was deprived of a
federal right, which was “carried out by persons acting under
color of state law.” Id. In addition, to recover against a
government entity such as a town, the plaintiff must also prove
that the entity was “a moving force behind the deprivation” -
that i s , the deprivation was a result of the entity’s “policy or custom.” Kentucky v . Graham, 473 U.S. 159, 166 (1985)(internal
quotations omitted).
PPG’s amended complaint fails to precisely allege any
violation of a federal right which is supported by facts.
Rather, PPG makes broad and often vague references to
constitutional claims. Under normal circumstances, the court
would grant the defendants’ motion to dismiss for these failings
on the ground that PPG has failed to provide the defendants with
“fair notice” of its claims and the “grounds upon which [they] rest[].” Erickson, 127 S . C t . at 2200. In their motion to
dismiss, however, the defendants address certain constitutional
arguments they believe PPG asserted in its amended complaint,
including claims for substantive and procedural due process
violations, an equal protection violation, and an
unconstitutional taking. In its objection to the defendants’
motion to dismiss, PPG argues only that its complaint
sufficiently alleges substantive and procedural due process
8 claims.5 The court, therefore, will examine PPG’s well-pleaded
facts only to determine whether they demonstrate violations of
their substantive and procedural due process rights under the
Fourteenth Amendment.
A. Due Process
“The Due Process Clause of the Fourteenth Amendment
prohibits a state from depriving a person of ‘life, liberty, or
property, without due process of law.’” Pagan v . Calderon, 448
F.3d 1 6 , 32 (1st Cir. 2006) (quoting U.S. Const. amend. XIV, §
1). “This guarantee has both substantive and procedural
components.” Pagan, 448 F.3d at 3 2 . “Procedural due process
requires that the procedures provided by the state in effecting
the deprivation of liberty or property are adequate in light of
the affected interest. Substantive due process, however, imposes
limits on what a state may do regardless of what procedural
protection is provided.” Pittsley v . Warish, 927 F.2d 3 , 6 (1st
Cir. 1991); see also Pagan, 448 F.3d at 32 (“The substantive due
process guarantee does not, however, serve as a means of
constitutionalizing tort law so as to ‘impos[e] liability
5 PPG also makes numerous new factual allegations which were not included in its amended complaint. The court will not accept as true those facts which were not included in the complaint in ruling upon the motion to dismiss.
9 whenever someone cloaked with state authority causes harm.’”
(quoting County of Sacramento v . Lewis, 523 U.S. 833, 848
(1998)).
1. Substantive Due Process
To prove a substantive due process violation, a plaintiff
must show “both that the acts [of the defendants] were so
egregious as to shock the conscience and that they deprived him
of a protected interest in life, liberty, or property.”6 Pagan,
448 F.3d at 32 (emphasis in original) (“‘[C]onscience-shocking
conduct is an indispensable element of a substantive due process
challenge to executive action.’” (quoting DePoutot v . Raffaelly,
424 F.3d 1 1 2 , 118 n.4 (1st Cir. 2005)). “[T]he conventional
planning dispute - at least when not tainted with fundamental
procedural irregularity, racial animus, or the like - . . . is a
matter primarily of concern to the state and does not implicate
the Constitution.” Creative Environments, Inc. v . Estabrook, 680
F.2d 8 2 2 , 833 (1st Cir. 1982). “[The First Circuit has] left the
door slightly ajar for federal relief in truly horrendous
6 The court questions whether PPG has a constitutionally protected property interest, or a property interest recognized by state law. PPG has failed to specifically identify the property interest it is asserting. However, the defendants do not argue this point and the court will assume, without deciding, and only for purposes of the motion to dismiss, that PPG has a protected property interest in the buffer.
10 situations [and] . . . the threshold for establishing the
requisite 'abuse of government power' is a high one indeed."
Nestor Colon Medina & Sucesores, Inc. v . Custodio, 964 F.2d 3 2 ,
45 (1st Cir. 1992). The defendants’ conduct “must at the very
least be extreme and egregious, o r , put another way, truly
outrageous, uncivilized, and intolerable.” Pagan, 448 F.3d at 32 (internal quotations and citations omitted).
In an effort to meet this high standard, PPG alleges that
the defendants “have set themselves . . . above the law” (Amend.
C., ¶ 49) by continued failure to comply with state court orders,
counseling the abutting landowners on how to avoid the state
court orders, and conspiring to reduce the value of 7 Central
Street in order to put PPG out of business and use the property
for parking. The facts as alleged by PPG, however, do not
support these claims.
With regard to 32 West Broadway, PPG alleges that: Wells
Fargo “has been in contact with the defendants and is planning on
attempting to evade” the judgment of the state courts (id., ¶
4 8 ) ; Mackey failed to “take action against the current owners of
32 West Broadway” to enforce the buffer (id., ¶ 4 5 , 4 6 ) ; and the
ZBA declined to accept an appeal from Mackey’s decision on the
ground that it did not have jurisdiction. With regard to 9
Central Street, PPG alleges that: Mackey refused to enforce the
11 buffer requirement; the ZBA found that it did not have
jurisdiction to hear an appeal from Mackey’s decision; upon
remand from the superior court, the ZBA then upheld Mackey’s
decision, which was ultimately reversed by the state courts;7 the
ZBA then instructed Mackey to enforce the buffer requirement;
Mackey met with Sioras and Halcyon to discuss ways to evade the decisions of the courts; and Halcyon plans to appeal the courts’
orders to the planning board, “with the encouragement” of Mackey
and Sioras (id., ¶ 4 0 ) .
The facts as alleged by PPG, although suggesting potentially
inappropriate activities, are insufficient to meet the “shocks
the conscience” standard with regard to the conduct of the
defendants in this case. PPG has not alleged facts which show a
“fundamental procedural irregularity, racial animus, or the like”
which would elevate the defendants’ conduct to the level of egregiousness required for a violation of PPG’s substantive due
process rights. Creative Environments, 680 F.2d at 833. The
only allegation that comes close is that Sioras and Mackey met
with Halcyon to determine how the state courts’ decisions could
be evaded. Assuming that to be true, their conduct is not
sufficiently egregious to establish a violation of substantive
7 PPG alleges that the superior court’s reversal was affirmed by the Supreme Court.
12 due process, particularly where the ZBA ultimately ordered Mackey
to enforce the buffer requirement, and a buffer was installed by
Halcyon.
Further, PPG’s allegation that the abutting property owners
may seek ways to avoid the state court decisions cannot be
impugned to the defendants. While PPG alleges that the defendants intend to circumvent the state court orders in the
future, conjecture about future conduct cannot support PPG’s
present claim that the defendants’ conduct “shocks the
conscience.” Id. at 830. Therefore, PPG has “failed to
establish a plausible violation of [its] constitutional right to
substantive due process.” Clark, 514 F.3d at 113.
2. Procedural Due Process To recover for a procedural due process violation under the
Fourteenth Amendment, the plaintiff must prove: (a) that a
protected property right exists; “(b) [that the] governmental
action with respect to that property right amounts to a
deprivation; and (c) [that] the deprivation, if one be found, was
visited upon the plaintiff without due process of law.” Fusco v .
Connecticut, 815 F.2d 2 0 1 , 205 (2d Cir. 1987); Jeneski v . City of
Worcester, 476 F.3d 1 4 , 17 (1st Cir. 2007). Regarding the latter
13 requirement, the Supreme Court has held that “an unauthorized
intentional deprivation of property by a state employee does not
constitute a violation of the procedural requirements of the Due
Process Clause of the Fourteenth Amendment if a meaningful
postdeprivation remedy for the loss is available.” Hudson v .
Palmer, 468 U.S. 5 1 7 , 533 (1984); Decker v . Hillsborough County Attorney’s Office, 845 F.2d 1 7 , 22 (1st Cir. 1988) (“[T]he
deprivation could not be said to be without due process unless no
effective state remedy were available.” (citing Hudson, 468 U.S.
at 533)).
PPG cites to Roy v . Augusta, 712 F.2d 1517 (1st Cir. 1983),
as a case presenting similar facts, in which the First Circuit
found that the plaintiff’s § 1983 procedural due process claim
survived a motion to dismiss. The plaintiff in Roy was given an
expired, invalid renewal license to operate his pool hall following decisions by the Maine courts ordering the defendants
to renew his license. 712 F.2d at 1522. He applied for a
current license, but while his application was pending, he had to
convey the pool hall to the mortgagees to avoid foreclosure. The
defendants then denied his application on the ground that he
“lacked a sufficient property interest in the premises.” Id. at
1520. The court found that the plaintiff had a property interest
in the license given the state courts’ decisions, that the
defendants had “‘tak[en]’ his property in derogation of the
14 process afforded by the state,” and that due to special
circumstances, the plaintiff no longer had recourse in the state
courts. Id. at 1523-24,; see also Chiplin Enters. v . City of
Lebanon, 712 F.2d 1524, 1528 (1st Cir. 1983).
Assuming, without deciding, that PPG has been deprived of a
protected property interest in the buffer, PPG has failed to allege facts which show it was denied due process. PPG has not
alleged that recourse in the state courts is unavailable to
enforce the buffer requirement. PPG filed numerous actions in
the state courts, and according to PPG’s complaint, prevailed in
those proceedings. PPG now claims that Wells Fargo and Halcyon
have not complied with the court orders, that the defendants have
failed to enforce the orders, and that PPG was therefore required
to file motions for contempt in the state courts. Based upon
these allegations, not only is recourse available in the state courts, but PPG is currently pursuing i t .
PPG has failed to establish that no effective state remedy
is available. PPG’s procedural due process claim is thus
distinguishable from the plaintiff’s claim in Roy, where recourse
in the state courts was no longer available. See Decker, 845
F.2d at 22 (distinguishing Roy where it appeared plaintiff may
“ultimately achieve some effective relief” in the state courts).
Therefore, PPG has “failed to establish a plausible violation of
[its] constitutional right to [procedural] due process.” Clark,
15 514 F.3d at 113.
B. Federal Claims against the Town
The defendants also seek dismissal of the § 1983 claims
against the town on the ground that PPG has failed to prove the
town acted pursuant to “official municipal policy” or custom.
Collins v . City of Harker Heights, 503 U.S. 115, 121 (1992).
Given the court’s dismissal of all federal claims against all
defendants, this argument need not be addressed.
II. State Law Claims PPG failed to state federal claims upon which relief may be
granted, and these claims are therefore dismissed. Given the
court’s dismissal of the PPG’s federal claims, the court declines
to exercise supplemental jurisdiction over its state law claims.
See Marrero-Gutierrez v . Molina, 491 F.3d 1 , 7 (1st Cir. 2007).
The court will not address, therefore, the defendants’ res
judicata argument as it applies to PPG’s state law claims.
Conclusion
For the foregoing reasons, the defendants’ motion to dismiss
(document n o . 15) is granted as to the plaintiff’s federal claims
16 and is denied as to the state law claims for lack of
jurisdiction. The clerk shall enter judgment in favor of the
defendants as to the federal claims and remand the remaining
claims to the Rockingham Superior Court.
SO ORDERED.
vJo s e p h A. DiClerico, Jr. Joseph United States District Judge
November 18, 2008
cc: R. Matthew Cairns, Esquire John P. Griffith, Esquire