July 10, 2013

Ninth Circuit passes on "entitlement" theory of property rights

By Brian T. Hodges Senior Attorney

The Ninth Circuit Court of Appeals issued an interesting opinion this week in Richter v. City of Des Moines, a case that centers on one shoreline property owner’s efforts to build a footpath connecting her house to the beach.  Property owner Maureen Richter sued the City of Des Moines (Washington) to recover damages for constitutional violations arising out of the city’s initial denial of her permit application.  PLF attorneys filed an amicus brief in support of Ms. Richter’s claim that the city had violated her due process right to have a neutral decision-maker on appeal, because the city’s code required the hearing examiner who reviewed Ms. Richter’s case to defer to the city staff’s decision.  I previously posted that the Richter case would present the Ninth Circuit with a very important question—does a property owner have to show that she is “entitled” to a land use permit for due process to apply, or does due process apply because the owner enjoys constitutionally protected property rights?

The district court determined that Ms. Richter could not challenge the city’s hearing procedures because she could not establish that she was entitled to the permit.  The district court applied Supreme Court precedent that governs situations in which an individual seeks to protect an interest in a discretionary government benefit, such as public employment or assistance.  We argued that the court relied on the wrong law.  Ms. Richter’s case involves traditional property rights, not government benefit programs.  Indeed, the right to use one’s property hardly can be called a “government benefit.”  The correct view is that Ms. Richter enjoys constitutionally protected property rights by virtue of her ownership of the property, and those rights hang in the balance when the government makes permit decisions that affect her property, so due process must apply.

The city vigorously argued for the Ninth Circuit to adopt the “entitlement” approach to property rights, but the court declined to embrace that position.  Instead, the court issued a split (2-1) opinion in which the majority assumed, without deciding, that the Due Process Clause applied to Ms. Richter.  In a partial dissent, Judge Ikuta echoed PLF’s argument and explained that the court should not hesitate to apply due process in Ms. Richter’s case.  Judge Ikuta’s opinion deserves quoting (citations omitted):

The Fourteenth Amendment to the Constitution proclaims that no State shall “deprive any person of life, liberty, or property, without due process of law.”  It is well-established that “[t]he right of [an owner] to devote [her] land to any legitimate use is properly within the protection of the Constitution,” and that the government cannot deprive an owner of the “use and enjoyment” of her land without due process.  But here the majority will only “assume without deciding that Richter has a constitutionally protected property interest” based on her ownership of her real property.  I disagree with the majority’s hesitance on this point, because it is clear that the Fourteenth Amendment protects Richter’s interests in real property.

The majority’s doubt that Richter has a claim for unconstitutional deprivation of the use of her property reflects the City’s insistence that Richter’s claim must be analyzed as the deprivation of a government benefit, namely, the right to obtain a land-use permit.  Based on its interpretation . . ., the City assumes that only the government can create property interests, and so a court is limited to determining whether Richter has a “legitimate claim of entitlement” to a benefit “as created and defined” by state law.  But [case law] “stands not for a theory of plenary state control over the definition and recognition” of constitutionally-protected property interests, “but for a much more modest proposition”: that state law “might serve to elevate certain nontraditional forms of property,” like welfare, permits, and licenses, to “constitutional status.”  Expanding [that analysis] beyond the limited context of government benefits, and into the “traditional” realm of core property interests that the state cannot redefine at will, is a constitutionally untenable approach to assessing property rights.  [If applied] so broadly . . ., “States could unilaterally dictate the content of—indeed, altogether opt out of—both the Takings Clause and the Due Process Clause simply by statutorily recharacterizing traditional property-law concepts” such as the right to use and enjoy one’s own real property.

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