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Media Alerts - CMR D.N. Corp. v. City of Philadelphia - Third Circuit
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January 17, 2013
  CMR D.N. Corp. v. City of Philadelphia - Third Circuit
Headline: Waterfront Renaissance Associates, LLP. Sues City of Philadelphia over botched World Trade Center-like development agreement.

Area of Law: 14th Amendment U.S. Constitution, Pennsylvania Contract Law.

Issue(s) Presented: Whether the U.S. Constitution and Pennsylvania state law prevented the City of Philadelphia from imposing building restrictions on the land bought to build a World Trade Center-like development.

Brief Summary: The Waterfront Renaissance Associates, LLP ("Waterfront") owns a lot in the Delaware River waterfront neighborhood of Philadelphia, Pennsylvania. In 2006, the city extended building restrictions that were already imposed on the nearby neighborhood to include the waterfront property. Asserting that the height restriction imposed foreclosed its development plans, Waterfront sued the City on constitutional grounds. The City subsequently rescinded the height restriction ordinance, rendering the suit moot, but left in place other restrictions that were not included in Waterfront's suit. Waterfront then sought leave to amend its complaint against the city to include constitutional attacks on these other restrictions, but was denied by the District court. The Third Circuit affirmed the District Court's decision.

Extended Summary: Waterfront Renaissance Associates, LLP ("Waterfront") purchased a lot in the Central Riverfront District of Philadelphia. It began negotiations with then Mayor, Wilson Goode, to obtain a license for a World Trade Center-type development. After years of negotiations with financers and zoning commissions, it had finally received the funding and permits it needed to move forward in early 2005 with a start date in Feb. 2006. However, in March 2006, the City passed an ordinance that extended building restrictions from a nearby neighborhood onto the Waterfront property. Waterfront filed suit against the city claiming that the restrictions were in violation of state law and the U.S. Constitution's equal protection clause.

In 2009, while the litigation was pending, the City enacted the ordinance entitled "Central Delaware Riverfront Overlay District" ("CRO"). The CRO required any applicant for a zoning permit to submit a plan for approval to the planning commission. The Commission would have seventy-five days to determine if the proposed construction would be "appropriate in scale, density, character and use for the surrounding community."

Waterfront amended its complaint to add that, on its face, the CRO violates the constitutional principles of separation of powers, due process, and equal protection of the laws. Essentially, it argued that the "appropriate in scale, density, character and use for the surrounding community" language in the CRO is vague and indefinite, and violates due process because it is unrelated to any legitimate planning purpose.

In 2010, the City repealed the height restrictions to most plots in the CRO, including the Waterfront property. Based on this, the City claimed the Waterfront suit was moot and filed for dismissal and won.
Waterfront appealed the district court's finding that its suit was moot, the denial of the motion to amend its claim to include "width," the finding that the CRO regulations are constitutional, and the grant of summary judgment to the City on the state law claims.

The Third Circuit agreed that the suit was now moot, but found that determination did not necessarily relieve the City from compensatory damages. In this circumstance however, Waterfront failed to ever apply for a zoning permit. Having never actually been turned down for the permit, Waterfront could not damages for an ordinance that prevented it from getting a permit and therefore could not claim compensatory damages. If Waterfront was right that its zone was included by mistake, then it was surely possible that it might have been awarded a permit if it applied for one. The court has an obligation not to entertain speculative claims.

Further the Third Circuit found that Waterfront had years to amend its complaint to include its constitutional attack on the width ordinance but failed to do so until the last minute. Thus denial of the motion to amend was well within the District Court's discretion.

The Third Circuit also agreed with the District Court's ruling that that CRO and its ordinances are not unconstitutionally vague. It found that in context, the terms used in the CRO have clear ascertainable meaning that can be understood by those who are seeking to comply with it. Nor does the CRO unconstitutionally grant power to the Planning Commission. The delegation of zoning authority to the Planning Commission by the CRO in no way violates the due process clause of the Constitution.

Finally, the Third Circuit found, in agreement with the District Court, that summary judgment was appropriate on the state law claims because Waterfront failed to set forth sufficient evidence to show that the City had made a "valid and enforceable promise" to Waterfront which is required in any contract claim against the City. At most, Waterfront had shown support by the City in its World Trade Center-like Project.

For the entire opinion please visit: http://pacer03.ca3.uscourts.go...rch/114362p.pdf

Panel: FUENTES, FISHER and GREENBERG, Circuit Judges

Argument Date: 10/01/2012

Argument Location:

Date of Issued Opinion: 01/14/2013

Docket Number: No. 11-4362

Decided: Affirmed

Case Alert Author: Daniel Robert Hess

Counsel: Thomas A. Leonard, Richard P. Limburg, H. David Seidman for Plaintiff-Appellant; Shelley R. Smith, Jane Lovitch Istvan for Defendant-Appellee

Author of Opinion: FUENTES, Circuit Judge:

Case Alert Circuit Supervisor: Susan L. DeJarnatt

Edited: 01/18/2013 at 10:49 AM by Media Alerts Moderator

    Posted By: Susan DeJarnatt @ 01/17/2013 01:01 PM     3rd Circuit  

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