denied just compensation"); Villager Pond, Inc. v. Town of Darien, Darien Planning & Zoning Commission, 56 F.3d 375 (2d Cir. 1995). New York has established a procedure for the pursuit of just compensation claims, EDPL § 101, et. seq., and that procedure fulfills all constitutional requirements. See Kloasch v. New York State Thruway Authority, 482 F. Supp. 721 (S.D.N.Y. 1980). Because HBP has failed to allege that it sought and was denied just compensation from the defendants under New York State law, nor shown that New York's "inverse condemnation procedure is unavailable or inadequate," Williamson, 473 U.S. at 196-7, 105 S. Ct. at 3122, its claim for the taking of property without just compensation is premature. See, e.g., Krmencik v. Town of Plattekill, 1989 U.S. Dist. LEXIS 10279, 1989 WL 114307 (N.D.N.Y. *2). Accordingly, the defendants' motions to dismiss are granted as to HBP's Fifth Amendment takings claim.
3. Substantive Due Process Claim
To state a claim under the Fourteenth Amendment for deprivation of "property" without due process of law a person must establish that he had a valid "property interest" in some benefit that was entitled to constitutional protection at the time he was deprived of that benefit. See Brady v. Town of Colchester, 863 F.2d 205, 211-12 (2d Cir. 1988). State law creates and defines the parameters of a plaintiff's property interest for the purposes of an action under § 1983. See Paul v. Davis, 424 U.S. 693, 709, 96 S. Ct. 1155, 1164, 47 L. Ed. 2d 405 (1976); Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L. Ed. 2d 548 (1972).
Citing Sudarsky v. City of New York, 779 F. Supp. 287 (S.D.N.Y. 1991), aff'd, 969 F.2d 1041 (2d Cir. 1992), cert. denied, 113 S. Ct. 1059, 122 L. Ed. 2d 365, and Eastbrook Construction Co. v. Armstrong, 205 A.D.2d 971, 613 N.Y.S.2d 776 (3d Dep't. 1994), the State argues that the issuance or denial of a discretionary permit does not create a property interest protected by the Fourteenth Amendment. Although in both cases the Courts found that, because the issuance of the permit was discretionary, the plaintiff did not have a property interest,
neither Sudarsky nor Eastbrook involved the denial of a benefit from a special assessment that was levied against the plaintiff, as in this case.
Here, HBP premises its constitutional claim against the Defendants on the proposition that it was unconstitutionally deprived of property because the Defendants denied it access to the benefit of a sewage facility for which it has paid a special assessment. Courts have held that although money "raised by general taxation may constitutionally be applied to purposes from which the individual taxed may receive no benefit, and indeed, suffer serious detriment, so-called assessments for public improvements laid upon particular property owners are ordinarily constitutional only if based on benefits received by them." Nashville, C. and St. L. Ry. v. Walters, 294 U.S. 405, 429-430, 55 S. Ct. 486, 79 L. Ed. 949 (1935); see also Norwood v. Baker, 172 U.S. 269, 279, 19 S. Ct. 187, 191, 43 L. Ed. 443 (1898); Crandall Public Library v. City of Glens Falls, 629 N.Y.S.2d 100, 1995 N.Y. App. Div. LEXIS 7453, 1995 WL 385436 (N.Y.A.D. 3 Dept. *1); Board of Education of Central School Dist. No. 2 of Town of Alexander v. Village of Alexander, 197 Misc. 814, 820-21, 92 N.Y.S.2d 471, 477-78 (N.Y.Sup.Ct. 1949) Taxpayers of Twenty-Third Ward of City of Rochester, 136 Misc. 278, 279, 240 N.Y.S. 778, 780 (N.Y.Sup. Ct. 1930).
Thus, HBP's allegations that it has paid an annual special assessment for the construction and maintenance of the sewer facility, if true, would entitle it to the benefit of sewer services. Accordingly, HBP has alleged a valid property interest in the benefit of sewer services that is protectible under the Fourteenth Amendment.
Having properly alleged that it has a property interest in the benefit of sewer services, to state a substantive due process claim, HBP must still allege that the government's action denying it this benefit is arbitrary or irrational. See Brady, 863 F.2d at 215. "Government regulation of a landowner's use of his property is deemed arbitrary or irrational . . . only when government acts with "no legitimate reason for its decision." Southview Associates, Ltd. v. Bongartz, 980 F.2d 84, 102 (2d Cir. 1992) (internal quotations and citations omitted), cert. denied, 113 S. Ct. 1586, 123 L. Ed. 2d 153 (1993).
In support of its claim that the Defendants acted arbitrarily and irrationally, HBP's complaint alleges first that the State has acknowledged that currently the plant has not surpassed its maximum capacity, but is meeting all effluent quality permit limits; in fact, the State denied HBP's request for a main line extension permit solely on the basis of a "potential for violations." HBP alleges, however, that because it possesses valid sewer connection permits (meaning the State has taken its estimated output into account in calculating the balance of permissible sewage flow into the treatment plant), the sewage flow generated by the subdivision would not add to the "potential for violations" at the plant. HBP also alleges that, while it is completely denied the benefit of the sewer services to which it is entitled as a property owner within the Sewer District, the County provides 15,000 gallons per day of its total sewage capacity to municipalities located outside the boundaries of Sewer District No. 1.
HBP further alleges that the moratorium on main line extensions was imposed nine years ago in September of 1986, and that, in the intervening years, the State has never required the County to expand, upgrade or replace the treatment plant and the County has never taken steps to demonstrate adequate capacity for future growth. HBP also alleges that, in the intervening years, the State has never required the County to reduce existing sewage flow, nor has the County taken steps to reduce the sewage flow.
Assuming the truth of HBP's allegations, the Court cannot dismiss HBP's substantive due process claim for failure to state a claim.
4. Equal Protection Claim
The Equal Protection Clause "is essentially a direction that all persons similarly situated should be treated alike." City of Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 439, 105 S. Ct. 3249, 3254, 87 L. Ed. 2d 313 (1985). Absent an infringement of a "fundamental right" or the use of a "suspect classification," the rational basis test is the proper standard of review for equal protection challenges to government action. See City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S. Ct. 2513, 2516-17, 49 L. Ed. 2d 511 (1976). Under the rational basis test, the Defendants may not exercise their authority in an arbitrary, capricious or unreasonable manner. To be sustained, their exercise of authority must be shown to bear a rational relationship to a legitimate governmental objective. See Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 96 S. Ct. 2562, 49 L. Ed. 2d 520 (1976); Goldblatt v. Town of Hempstead, 369 U.S. 590, 82 S. Ct. 987, 8 L. Ed. 2d 130 (1962).
HBP has not alleged that the moratorium's classification affects fundamental rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage. Thus, the question is whether HBP has alleged that the moratorium on main line extension permits is rationally related to the Defendants' alleged legitimate interest in the regulation of sewer treatment facilities. The rational basis analysis under the equal protection clause essentially tracks the arbitrary and irrational analysis under the substantive due process clause. See Horizon Concepts, Inc. v. City of Balch Springs, 789 F.2d 1165 (5th Cir. 1986).
In support of its claim that the Defendants' moratorium does not bear a rational relationship to a legitimate governmental objective, HBP alleges, in addition to the allegations discussed above in relation to its substantive due process claim, that property owners who are not in need of a main line extension are permitted to use the sewage facilities regardless of the amount of sewage they generate. In addition, HBP alleges that the moratorium has been administered on an ad hoc basis and is riddled with exceptions.
Assuming the truth of all the allegations in the complaint, the Court cannot dismiss HBP's substantive due process and equal protection claims. HBP has stated cognizable claims (at least for declaratory and injunctive relief with respect to the State) against the Defendants.
In conclusion, the motions to dismiss are denied, except as to the Fifth Amendment taking claims for which they are granted.
Dated: White Plains, N.Y.
July 21, 1995
Barrington D. Parker, Jr.