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In a ruling that will have a huge impact on civil rights litigation, the 3rd U.S. Circuit Court of Appeals has ruled that land developers who claim their rights were violated by municipal zoning officials must now prove that the defendants’ conduct “shocks the conscience,” and not merely that they acted with “improper motives.” In United Artists Theatre Circuit Inc. v. Township of Warrington, the court found that a long line of 3rd Circuit cases that discussed the improper motives test “are no longer good law” as a result of the U.S. Supreme Court’s 1998 decision in County of Sacramento v. Lewis that called for a shocks-the-conscience test in all substantive due process cases. But in a strongly worded dissent, one judge insisted that the improper motives test was still good law, and that it was wrong to rely on Lewis, which involved a high-speed police chase, for a rule that would apply in all cases. In the suit, United Artists claims that Warrington Township, Pa., and its board of supervisors violated the theater chain’s constitutional rights by delaying approval of its proposed theater when it refused to pay a $100,000 “impact fee” while at the same time quickly approving the plans of another theater developer who had agreed to pay the fee. The supervisors moved for dismissal, but Senior U.S. District Judge Norma L. Shapiro of the Eastern District of Pennsylvania ruled that none of the individual board members are entitled to “qualified immunity” because at the time of their actions, the law clearly prohibited such conduct. Now the 3rd Circuit has ordered Shapiro to review the case again and apply the shocks-the-conscience test when deciding the immunity claims. “We see no reason why the present case should be exempted from the Lewis shocks-the-conscience test simply because the case concerns a land use dispute. Such a holding would be inconsistent with the plain statements in Lewis and our own post- Lewis cases,” 3rd Circuit Judge Samuel A. Alito wrote. “Land-use decisions are matters of local concern and such disputes should not be transformed into substantive due process claims based only on allegations that government officials acted with ‘improper’ motives,” Alito wrote in an opinion joined by visiting Judge Alan D. Lourie of the U.S. Court of Appeals for the Federal Circuit. But Senior 3rd Circuit Judge Robert E. Cowen dissented and said he feared that switching to a shocks-the-conscience test would invite abuse. “Tossing every substantive due process egg into the nebulous and highly subjective ‘shocks the conscience’ basket is unwise. It leaves the door ajar for intentional and flagrant abuses of authority by those who hold the sacred trust of local public office to go unchecked,” Cowen wrote. Cowen said the shocks-the-conscience test is useful in high-speed police misconduct cases, “but it is less appropriate, and does not translate well, to the more mundane world of local land use decisions, where lifeless property interests (as opposed to bodily invasions) are involved.” And since the shocks-the-conscience test is “amorphous” and “imprecise,” Cowen predicted that the lower courts would “struggle” when applying it. “The confusion and potential for disparate results across the districts will haunt us for years to come. It is our manifest responsibility as an appellate tribunal to prevent that quagmire by providing a clear standard for the bench and bar,” Cowen wrote. “Our ‘improper motive’ line of land use cases serves that purpose and, even after Lewis, this court has not impugned its vitality. I see no legitimate reason to abandon it now,” Cowen wrote. The dispute between United Artists and Warrington Township focuses on a series of events that began in 1995 and culminated in a federal lawsuit filed in 1998 by UA’s lawyers, John F. Schultz and James Eiseman Jr. of Philadelphia-based Drinker Biddle & Reath. According to the suit, elected officials in Warrington learned in 1995 that several movie theater chains were interested in opening theaters in the township. Although the board members knew they could neither collect an amusement tax from these theaters, nor require them to pay an “impact” fee, the suit alleges that they set out to extract some form of income before approving any new theater. United Artists says it was the first to submit a proposal for a multiplex theater in January 1996. A year later, a competing developer, Bruce Goodman, requested approval for a plan to build a multiplex theater and retail center on a plot of land adjacent to UA’s proposed theater site. The suit alleges that the board asked each developer to voluntarily contribute an impact fee to the township. Goodman immediately offered to pay $100,000 per year, the suit says, but UA resisted paying the requested fee. In February 1997, the board voted to grant preliminary approval to the Goodman project — just one month after his submission of an initial application — and the project was granted final approval in May 1997. UA says it was not granted preliminary approval until March 1997 — 14 months after submitting its initial application. And when the project came up for final approval, the suit alleges that although the township’s planning commission recommended that final approval be granted, the board tabled its vote on final approval three times — each time asking if UA would be willing to pay an impact fee. Finally, in September 1997, the board granted final approval after UA guaranteed the township that it would collect $25,000 in revenue from the project annually. But the suit said the board voted to alter some of the conditions to approval, making it more difficult for UA to begin building its theater. Goodman’s project was completed in 1999, but UA never built a theater in Warrington Township. Judge Shapiro granted summary judgment for the defendants on the procedural due process claim, but found that UA had a valid substantive due process claim because there was evidence that the township acted with an improper motive. Two appeals followed. In the first appeal, the 3rd Circuit ordered Shapiro to consider each supervisor’s request for immunity on an individual basis or explain why the supervisors should be considered collectively. Shapiro later ruled that it was proper to treat the board as a group, but that even if they are considered separately, none of them is entitled to qualified immunity. In the second appeal, the township’s lawyer, Arthur W. Lefco of Philadelphia-based Marshall, Dennehey, Warner, Coleman & Goggin, argued that he urged Shapiro to adopt the shocks-the-conscience test, but that she refused. Shapiro found there was little difference between the two tests and that the 3rd Circuit has continued to employ the improper motive standard in post- Lewis cases when deciding whether a party’s substantive due process rights have been violated in land use disputes. Now the 3rd Circuit has sided with Lefco and ruled that Shapiro must review the immunity claims a third time with the shocks-the-conscience test in mind. Judge Alito found that the Supreme Court’s decision in Lewis included broad language that encompasses all substantive due process suits. “The court observed that ‘the core of the concept’ of due process is ‘protection against arbitrary action’ and that ‘only the most egregious official conduct can be said to be arbitrary in the constitutional sense,’” Alito wrote. The justices went on, Alito said, to define “the cognizable level of executive abuse of power as that which shocks the conscience.” Since Lewis, Alito said, the 3rd Circuit has “repeatedly acknowledged that executive action violates substantive due process only when it shocks the conscience but that the meaning of this standard varies depending on the factual context.” UA’s lawyers urged the court not to abandon a long line of 3rd Circuit cases that employed the improper-motive test in land use cases, beginning with Bello v. Walker in 1988. In those cases, the 3rd Circuit held that a municipal land use decision violates substantive due process if it was made for any reason “unrelated to the merits,” or with any “improper motive.” Alito disagreed, saying “these cases cannot be reconciled with Lewis‘ explanation of substantive due process analysis. Instead of demanding conscience-shocking conduct, the Bello line of cases endorses a much less demanding improper-motive test for governmental behavior.” Shapiro erred, Alito said, when she said there were few differences between the two tests. While the shocks-the-conscience standard encompasses only “the most egregious official conduct,” Alito found that “the term ‘improper’ sweeps much more broadly, and neither Bello nor the cases that it spawned ever suggested that conduct could be ‘improper’ only if it shocked the conscience.” As a result, Alito found that “the Bello line of cases is in direct conflict with Lewis.” But in dissent, Judge Cowen said the Supreme Court clearly limited its holding in Lewis to high-speed police chases. Cowen said the majority was also ignoring the fact that the 3rd Circuit “has continued to apply and cite to the ‘improper motive’ test even after the decision in Lewis was handed down.” The Bello case and its progeny have proven to be a valuable standard, Cowen said, but the majority decided to abandon it. “The evisceration of this standard by the majority today is a most unfortunate step backwards in the evolution of Section 1983 as the legislative guardian of bedrock constitutional rights. I am deeply concerned that there will be consequences,” Cowen wrote. But even if the shocks-the-conscience test were the right one, Cowen said he would have upheld Shapiro’s decision not to dismiss the suit. “The alleged behavior in this case resolutely shocks the conscience. Public officials, sworn to uphold the law, deliberately extracted money, knowing that it was improper for them to do so. In contemporary America, under compelling norms of basic human decency, it would be shocking that such officials improperly and illegally obtained money in matters that come before them,” Cowen wrote.

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