88 N.Y.2d 41 (1996)
A municipality can be held liable under 42 U.S.C. § 1983 for damages resulting from arbitrary and capricious zoning decisions made by officials with final policy-making authority, leading to the deprivation of a protectable property interest.
Summary
The Town of Orangetown wrongfully revoked Bradley Industrial Park’s building permit due to political pressure, halting a $4 million construction project. The New York Court of Appeals affirmed the lower courts’ decisions, holding the Town liable under 42 U.S.C. § 1983. The court found the Building Inspector’s politically motivated revocation, authorized by Town policy, deprived the developers of their vested property rights without due process. The court also addressed the ripeness of the claim and the calculation of damages based on the stipulated Wheeler formula. This case clarifies the scope of municipal liability for arbitrary land-use decisions.
Facts
Bradley Industrial Park, Inc. owned 34 acres in the Town of Orangetown. In 1980, the Town approved their plans for a 184,000 sq ft industrial building, and a building permit was issued. Bradley Industrial Park commenced construction, investing over $4 million. Growing community opposition led the Town Supervisor to direct the Building Inspector to revoke the permit on July 25, 1985. The Town then amended its zoning code to preclude commercial buildings on the property. The trial court found the permit revocation was solely due to political pressure.
Procedural History
The Town sued to compel removal of a temporary building on the site. The defendants counterclaimed for reinstatement of the permit and damages under 42 U.S.C. § 1983. The Supreme Court dismissed the Town’s complaint and ordered reinstatement of the permit, awarding the defendants $5,137,126 in damages plus costs and attorney’s fees. The Appellate Division modified the judgment by remitting the issue of attorney’s fees but otherwise affirmed. The Town appealed to the New York Court of Appeals.
Issue(s)
1. Whether the Building Inspector’s permit revocation constituted a “final decision” by the Town, making the § 1983 claim ripe for review without exhausting administrative remedies.
2. Whether the Town’s arbitrary and capricious revocation of the building permit deprived the defendants of a protectable property interest, thus supporting a claim for damages under 42 U.S.C. § 1983.
Holding
1. Yes, because the Building Inspector had statutory authority to revoke the permit, making his decision a final action attributable to the Town.
2. Yes, because the defendants had a vested right under state law to continue construction, and the revocation was arbitrary and politically motivated, thus violating their due process rights.
Court’s Reasoning
The Court reasoned that the Building Inspector’s revocation was a final decision because he was the official with exclusive authority to make that determination under the Town’s zoning code. The Court distinguished between the finality requirement for ripeness and the exhaustion of administrative remedies, holding that exhausting remedies is not required for a § 1983 claim when a final decision has been made by an authorized official. The court emphasized that “Whether an official has final authority to take municipal action in a given case is not a question of fact, but a question of State law”.
Regarding the § 1983 claim, the Court found the defendants had a protectable property interest in the building permit because they had made substantial improvements and expenditures, thereby acquiring a vested right under New York law. The Court stated, “The hallmark of property ‘is an individual entitlement grounded in state law, which cannot be removed except ‘for cause’.” The Court concluded that the revocation was arbitrary and capricious, violating the defendants’ due process rights, as it was motivated by political concerns and lacked legal justification.
The Court noted the damages were properly calculated based on the Wheeler formula, to which the parties stipulated. The Court emphasized that parties are free to chart their own course in litigation. “In Wheeler, a case remarkably similar to this on the facts, the court established a method for determining the damages sustained by temporary governmental interference with a landowner’s beneficial use of property.”