Lindquist v. City of Pasadena Texas

669 F.3d 225

James LINDQUIST; Sandra Lindquist, Plaintiffs–Appellants,

v.The CITY OF PASADENA TEXAS, Defendant–Appellee.

No. 09–20683.

United States Court of Appeals, Fifth Circuit.

Jan. 25, 2012.

David Alfred Kahne (argued), Law Office of David A. Kahne, Houston, TX, for Plaintiffs–Appellants.

William S. Helfand (argued), Charles Teilhard Jeremiah, Chamberlain, Hrdlicka, White, Williams & Aughtry, Houston, TX, for Defendant–Appellee.

Deborah J. La Fetra, Timothy Mason Sandefur, Pacific Legal Foundation, Sacramento, CA, for Amicus Curiae.Appeal from the United States District Court for the Southern District of Texas.

Before DENNIS, OWEN and SOUTHWICK, Circuit Judges.

OWEN, Circuit Judge:

James and Sandra Lindquist filed suit against the City of Pasadena, Texas (the City or Pasadena) alleging that the City violated their constitutional rights under the Texas and United States constitutions by exercising unbridled discretion in connection with the denial of an application for a waiver of city zoning ordinances. The present appeal comes to us following a remand as a result of a prior appeal in which this court reversed the district court's order of dismissal.¹ On remand, the district court granted summary judgment in favor of the City. We affirm.

I

For many years the Lindquists have operated a used-car dealership known as “Professional Auto” on a location at 2602 Preston Road in Pasadena. There are many other used-car dealerships in the City—more than eighty as of 2003—and in 2003 the Pasadena City Council enacted an ordinance adopting licensing standards for used-car dealers. The ordinance criminalizes the sale of used cars without a license and imposes a number of requirements that dealers must meet as a condition of receiving a license.

Two of the ordinance's requirements are relevant to this appeal. First, a requirement that we will refer to as the 1000' Rule provides: “Each new license location is required to be a minimum of one thousand (1000) feet from any existing license location as measured from nearest property line to nearest property line.” In addition to distancing dealerships from one other, the ordinance distances the dealerships from residential areas. A second provision, which we will call the 150' Rule provides: “There shall not be issued a new license for the operation of a used car lot within one hundred fifty (150) feet of the lot lines of a residential area or subdivision.” The ordinance also contains a grandfather clause permitting a license to issue even if the dealership does not meet the 150' Rule or the 1000' Rule. In order to come within the grandfather clause, among other conditions, a dealership must have been operating at the same location and continuously licensed for a certain period of time, with no more than a sixty-day interruption of sales activity.

In order to obtain a license under the ordinance, a used-car dealer must first submit an application to a building official for the City. The building official then forwards the application to the City's chief of police, who must conduct an investigation regarding certain facts pertaining to the background of the applicants, none of which are at issue in this appeal.

The chief of police must also investigate the location of the proposed dealership. After completing the investigation, the chief of police is to forward his or her findings to the building official with a recommendation of either approval or denial. The building official then considers the application, reviews the chief of police's investigation, and determines whether the applicant has complied with the terms of the ordinance and other applicable laws and regulations. If the building official denies an application, the applicant has the right to appeal to the City Council. The appeal provision provides:

The hearing before the council shall be de novo and the applicant shall have the burden of proving that he is entitled to the license. At such hearing, the council shall have the right and authority to consider the information obtained by the chief of police or his duly authorized representative when investigating the applicant and also any report or statement of facts prepared by the city building official in connection with the matter.... After such hearing, the council shall decide, by motion, whether or not the license applied for shall be granted or refused. In the event the council grants such license, the applicant shall be entitled to the issuance thereof in the same manner as other licenses are issued under this article.

After this ordinance was enacted, the Lindquists considered purchasing two lots in Pasadena to expand their used car dealership. One was located at 4545 Spencer Highway, and the other was located at 4646 Spencer Highway. When the Lindquists consulted city officials responsible for issuance of the necessary license, the officials told them that neither lot qualified for a license. Specifically, the officials told the Lindquists that the 4545 Spencer Highway location violated both the 1000' Rule and the 150' Rule and the 4646 Spencer Highway location violated the 1000' Rule. The Lindquists nevertheless purchased the lot at 4646 Spencer Highway, which had previously been used as a gas station, and applied for a used-car-dealer license. City officials denied the Lindquists' application, but, after consultation with city officials, the Lindquists applied for and received a license to sell “Boats, Motorcycles, Travel Trailers, Golf carts, ATVs, Classic Cars, and Classic Trucks.”

The Lindquists subsequently discovered that their competitors Keith and Tammy Nielsen had purchased the lot located at 4545 Spencer Highway and applied for a license to operate a used-car dealership there. City officials denied the Nielsens' license application because 4545 Spencer Highway violated the 1000' Rule. Although city officials had informed the Lindquists that the 4545 Spencer Highway lot also violated the 150' Rule, that rule was not a basis for the denial of the Nielsens' license application.

The Nielsens appealed the denial of their license application to the City Council. At the beginning of the hearing pertaining to that appeal, the City's planning director, Tim Tietjens, made the following statement:

Now, it's important to note, this is not a variance. This is not a variance request in which someone's coming forward and seeking administrative relief around an ordinance. It is a section in the ordinance that's allowed those who have made such application. It is of public record and everyone that gets rejected is able to make the same appeal.

Each appeal stands on its own merits. Council has discretion to grant or refuse as you deem appropriate.

Tietjens then presented the council with a number of findings of fact. He stated that the previous owner of 4545 Spencer Highway was issued a used-car-dealer license in 1999, but that at some undetermined time the previous owners stopped sales operations. Mail was returned from the address as of September 29, 2003 and, according to Tietjens, the sixty-day window for the grandfather clause began to run as of that date. Tietjens observed that the application was rejected because the grandfather clause was forfeited as to 4545 Spencer Highway because more than sixty days had elapsed with no sales activity and the 1000' Rule thus applied to the lot.

The Nielsens then addressed the council. They contended that the 4545 Spencer Highway location did qualify for an exemption from the 1000' Rule under the grandfather clause because the location still maintained an active used-car-dealer license. They also pointed out that the location had been designed and built as a car dealership and would remain vacant unless it was used as a car dealership.

After the Nielsens' presentation, the council inquired of a city attorney whether the lot qualified for an exemption under the grandfather clause. The city attorney reiterated the position that the lot did not qualify because the sixty-day window began to run when mail was returned from that address. Tietjens, also, observed that, although the location still had an active license, he had not seen proof that there was any sales activity in the relevant sixty-day window.

The council then discussed the application, with some members observing that the lot had been vacant for quite some time. Councilman Welch, for example, observed: “[T]hose of us who have lived in Pasadena very long know that there's been no activity at the Gulf Coast Truck lot for several years. It's been dark. Their lights have been turned off. So we know they've been doing no business for sometime.” Councilman Isbell also noted that “there's no dispute that it's been vacant for quite a long time” and that he would “probably say it's probably close to a year since they've actually had activity at that facility.” One council member, Councilwoman Philibert, even observed that the lot had been specifically discussed at meetings addressing passage of the city ordinance:

But we were specifically told, because the truck center came up, that that unit would not be reopened as a used auto lot. I mean, it was a conversation piece that came up in the meeting. I have made numerous contacts with both Tim and several with our permit department, our legal department in regards to this issue, and have been assured relatively along the way that this permit was going to be denied.

Other members noted that the lot was built as a dealership, conformed with every applicable ordinance other than the 1000' Rule, and could be put to good use as a car dealership. Mayor Pro Tem Barker, for example, stated: “I remember when that lot was built.... It met all the qualifications we had at that time.... Now as far as I can see ... there's not much use for that lot the way it is other than as a car dealership.” Councilman Welch, also, observed that it would “def[y] common sense to say that this property is suitable for any other...