Village Green at Sayville, LLC v. Town of Islip

Citation: Not availableDocket: 19-3353-cv

Court: Court of Appeals for the Second Circuit; August 5, 2022; Federal Appellate Court

Original Court Document: View Document

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Village Green at Sayville, LLC filed a lawsuit against the Town of Islip and its governing bodies, alleging discrimination based on race, ethnicity, and national origin that hindered their efforts to construct an affordable housing complex in Sayville. The United States District Court for the Eastern District of New York dismissed the case, ruling it lacked subject matter jurisdiction because the land-use claims were deemed unripe under the Williamson County framework. The Second Circuit Court of Appeals disagreed, stating the Town Board's failure to second a motion regarding the removal of covenants and restrictions (C&Rs) constituted a final decision, making the dispute ripe for adjudication. Consequently, the appellate court vacated the dismissal and remanded the case for further proceedings, without addressing the merits of the discrimination claims.

The property in question is 7.29 acres, located on the south side of Long Island’s Sunrise Highway, featuring 590 feet of highway frontage. The district court, in its ruling on a motion to dismiss filed by the town, relied solely on the allegations in Village Green’s complaint, as the town's additional evidence did not contradict these allegations. This approach aligns with precedents that require accepting the complaint's material facts as true when reviewing such motions.

In February 2006, the Islip Town Board rezoned the property from Business One to Residence CA, imposing conditions that mandated the development consist solely of owner-occupied condominiums and connect to an off-site sanitary treatment plant (STP). In December 2006, the town engineer approved the construction of 38 condominiums, but Village Green faced significant challenges in securing funding and meeting the conditions, particularly regarding the STP connection. The only viable option for connecting to the Sayville Commons STP required approximately 1.3 miles of sewer pipe, but nearby landowners, including the Sayville Union Free School District and the Town of Islip, denied easement requests. Additionally, the town allocated the STP’s capacity to another development, complicating Village Green's compliance efforts.

In May 2014, after preliminary discussions with the planning department, Village Green sought approval to build a 64-unit rental apartment complex, including 20% affordable units, with an on-site STP. This proposal faced strong local opposition during a public hearing on November 13, 2014, with residents voicing concerns about increased traffic, environmental impact, and falling property values. They also expressed fears about the potential negative influences of the development, drawing comparisons to the nearby Sayville Motor Inn, which was associated with crime and undesirable activities. After 18 months of deliberation, the Planning Board finally considered recommending approval of Village Green's application in May 2016, following reports that the developer had adequately addressed concerns about traffic, wetlands, and property values.

The Planning Board voted on a motion related to Village Green's application, resulting in a 3-3 deadlock after the vice chairman recused himself, leading to a “non-action.” Village Green subsequently revised its proposal to 59 rental units, half designated for seniors. During a public hearing on June 30, 2016, residents expressed strong opposition, invoking concerns about "Section 8" housing and potential crime, with one resident likening the situation to a "war zone." The town supervisor had to intervene multiple times due to the heated atmosphere. 

On November 3, 2016, the Planning Board tabled the renewed application due to the absence of a vocal opponent. Later, on November 17, despite significant public opposition, the Town Board failed to act on the application after a motion for approval lacked a second. That same evening, the Town Board approved a competing application by developer Renzon Concepcion for additional rental apartments in the majority-minority hamlet of Brentwood. The Town subsequently deemed the motion for Village Green's application as a denial due to the lack of a second.

Village Green’s attorney sought written confirmation of this decision but received no response. Consequently, Village Green filed two lawsuits: an Article 78 action in December 2016 challenging the legality of the C&Rs and seeking approval for its application, which is ongoing, and a federal complaint in December 2017 alleging racial discrimination in housing practices aimed at excluding minorities from Sayville, highlighting the segregation within Islip.

Village Green contends that the Town of Islip's restrictions on condominiums, which mandate owner-occupancy in areas like Sayville, obstruct the development of affordable and market-rate rental apartments, disproportionately affecting minority residents. The Town Board has been accused of selectively approving modifications to these restrictions in majority-minority neighborhoods like Brentwood but denying such modifications in predominantly white areas like Sayville. Village Green claims this practice unlawfully restricts housing opportunities for minorities and families with children, fostering racial and ethnic segregation. The complaint includes multiple causes of action under federal and state laws, including the Fair Housing Act and equal protection claims under the Fourteenth Amendment. Village Green seeks a declaratory judgment, injunctive relief, compensatory and punitive damages, and attorneys' fees.

The district court dismissed all claims for lack of subject matter jurisdiction, determining that the issues were not ripe for adjudication because Village Green had not obtained a final decision regarding its application to modify the restrictions, as no action had been taken by the Town Board since a 2016 meeting. Additionally, the court found that Village Green did not meet the criteria for the futility exception to the final-decision requirement. This appeal focuses solely on the ripeness of Village Green's claims, with the court reviewing the lower court's jurisdictional decision de novo. The ripeness doctrine aims to ensure that cases present substantial controversies rather than hypothetical questions, avoiding premature judicial involvement in speculative disputes.

Concerns regarding timely adjudication are particularly significant in land-use disputes, which are generally more appropriate for local resolution rather than federal court involvement. Federal courts follow specific ripeness requirements for land-use disputes, anchored by the Williamson County case. The Supreme Court established that a Fifth Amendment taking claim is not ripe unless two conditions are met: (1) a final decision by the relevant government entity regarding the application of regulations to the property (final-decision requirement), and (2) the plaintiff has sought just compensation through available state processes (exhaustion requirement). Although the exhaustion requirement has been overruled to alleviate burdens on takings plaintiffs, the final-decision requirement remains intact and has been broadened to include various zoning challenges, such as those related to substantive due process, First Amendment rights, and the Americans with Disabilities Act (ADA).

The application of the final-decision requirement is not rigid; property owners may be excused from pursuing a final decision if seeking an appeal or variance would be futile or if the zoning agency is unlikely to grant such requests. Additionally, plaintiffs may challenge discriminatory zoning policies without waiting for a final decision. Regarding Village Green’s claims, it is determined that all claims—specifically takings, due process, and equal protection claims—must satisfy the final-decision requirement. This requirement also extends to Village Green’s land-use claims under the Fair Housing Act (FHA) and related statutes, aligning with the consensus among lower courts that such claims necessitate a final decision in the land-use context.

In the case of Sunrise Detox, the court addressed the final-decision requirement in zoning disputes involving claims of discrimination under the Americans with Disabilities Act (ADA). Sunrise sought a special permit for a drug rehabilitation facility but was advised by the city that it did not qualify, leading to the assertion that it would have to apply for a variance or appeal. Sunrise filed a lawsuit instead, claiming discrimination. The court held that the final-decision requirement applies to ADA zoning challenges involving intentional discrimination, emphasizing that the zoning review process must conclude before determining the impact of the alleged discrimination on the application.

Similarly, Village Green, another developer alleging discrimination in a land-use context, sought an injunction to remedy perceived illegal conduct by the town. The court noted that Village Green did not demonstrate injury apart from the land-use decision, necessitating a definitive ruling from the town on its application before the claims could mature. Village Green contended that a precedent from Mhany Management, Inc. v. County of Nassau indicated that a final decision was unnecessary for Fair Housing Act (FHA) claims. However, the court disagreed, reiterating that the standing criteria established in Lujan required a clear connection between the alleged injury and the actions of the defendant, alongside the likelihood of redress through a favorable ruling.

The developers demonstrated that, without the defendants' contested actions, there was a "substantial probability" that housing with higher minority occupancy would have been constructed. This aligns with the precedent set in Mhany, focusing on the necessity of a "final decision" for claims to be constitutionally ripe. The case emphasizes that the first factor from Lujan—whether a plaintiff's injury is concrete and actual or imminent—is paramount. The analysis then shifts to whether Village Green has received a "final, definitive decision" regarding its application to remove the Covenants and Restrictions (C&Rs), or if additional proceedings are needed for the claims to become more concrete. The court diverges from the district court's view, asserting that the dispute is ripe. It identifies a jurisdictional prerequisite from Williamson County, which requires property owners to submit at least one meaningful application to a relevant municipal authority. This is crucial because without such a submission, it is nearly impossible to ascertain what development will be permitted, given the regulatory body's discretion. 

Citing previous cases, it highlights that failure to pursue administrative remedies, as seen in Sunrise Detox, prevents a definitive stance from the city, thereby making a federal lawsuit premature. The situation in Murphy v. New Milford Zoning Commission further illustrates this point, where the Murphys did not appeal a cease and desist order but instead filed a federal lawsuit, indicating they had not fully exhausted the zoning process.

The dispute regarding the Murphys’ property was deemed not ripe due to their failure to submit a variance application, which prevented any certainty about permissible property use. Unlike the cases of Sunrise Detox and Murphy, Village Green actively engaged with municipal agencies, submitting a comprehensive application to address its land-use issues. Despite unsuccessful negotiations lasting seven years, Village Green did not resort to litigation but instead sought to modify the covenants and restrictions (C&Rs), initiating this process in 2013 with pre-submission meetings and culminating in a formal application filed in 2014. Over the next two years, the developer collaborated with the planning department to address various concerns and planned to seek approval from the Town Board in November 2016. The district court found Village Green’s claims unripe, noting the Town Board never took a definitive position as it did not vote on the application. However, the current analysis suggests that, despite no formal vote, the Town Board's actions—acknowledging the failure of a motion to approve and treating it as a denial—effectively precluded further consideration of the application, leaving the dispute unresolved for nearly six years.

The Town Board's actions regarding Village Green's application for property modification demonstrated a definitive stance that resulted in a concrete injury to Village Green. On December 8, 2016, a resolution indicated that an application for constructing 59 apartments instead of 38 single-family homes was considered. Although a public hearing was held on June 30, 2016, the Town Board reserved its decision until November 17, 2016. At that meeting, a motion to approve the application failed due to a lack of a second. This resolution, unlike previous proceedings, did not suggest future actions or deliberations, indicating a final decision. The Town Board's attorney communicated to Village Green that the failed motion constituted a denial of the application without further proceedings, reinforcing the finality of the decision. The district court's criticism of Village Green for lacking binding precedent on the attorney's statement was unfounded, as Village Green did not claim the attorney acted independently but rather conveyed the board's position. The lack of subsequent action by the Town Board affirmed the denial, thus solidifying the finality of their decision. Given these circumstances, Village Green's claims were deemed ripe, leading to the conclusion that the district court's judgment should be vacated and remanded for further proceedings. The court also noted that it need not consider Village Green's alternative claim regarding the futility of seeking a final decision, as a final decision had already been made.