     Case: 11-30196   Document: 00511671482   Page: 1   Date Filed: 11/21/2011




          IN THE UNITED STATES COURT OF APPEALS
                   FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                   Fifth Circuit

                                                                   FILED
                                                             November 21, 2011

                                 No. 11-30196                     Lyle W. Cayce
                                                                       Clerk

YUR-MAR, L.L.C.,

                                          Plaintiff - Appellant
v.

JEFFERSON PARISH COUNCIL; JEFFERSON PARISH; NEWELL
NORMAND, Sheriff for the Parish of Jefferson,

                                          Defendants - Appellees


JASON C. JAUME; MICHAEL J. BEECHER; OUR KINGDOM,
INCORPORATED; JOSEPH S. ANCONA, JR.; J.O.D., INCORPORATED,

                                          Plaintiffs - Appellants
v.

JEFFERSON PARISH,

                                          Defendant - Appellee



                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                            USDC No. 2:10-CV-3293
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                                       No. 11-30196

Before JONES, Chief Judge, HAYNES, Circuit Judge, and ENGELHARDT,
District Judge.*
PER CURIAM:**
       Appellants, owners and operators of businesses in a neighborhood of
Metairie, Louisiana known as “Fat City,” seek relief under 42 U.S.C. § 1983.
Appellants contend that the zoning regulations made effective by an ordinance
passed by the Jefferson Parish Council are arbitrary and capricious and the
limitations placed on their businesses by the ordinance amount to an
unconstitutional taking under the Due Process and Equal Protection Clauses of
the Fifth and Fourteenth Amendments of the United States Constitution and
their Louisiana state equivalents.1 We affirm.
                                    BACKGROUND
       On September 22, 2010, the Jefferson Parish Council (the “Parish”) passed
Ordinance No. 23881 (the “Ordinance”). The Ordinance established new zoning
regulations and design standards in a neighborhood of Metairie, Louisiana
known as “Fat City.” The Ordinance covers the portions of Jefferson Parish
enclosed in a four-block-wide perimeter bounded by Veterans Boulevard, West
Esplanade Avenue, Severn Avenue, and Division Street. The Ordinance created
three zoning districts within Fat City: a pedestrian-core district, a residential
mixed use district, and a commercial mixed use district. Additionally, the
Ordinance regulates the operation of stand-alone bars and other businesses


       *
         United States District Judge for the Eastern District of Louisiana, sitting by
designation.
       **
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
       1
        Appellants have not argued that there is any difference in the outcome of their case
between the federal and Louisiana constitutional provisions at issue. Like the parties, then,
we discuss the federal and state issues together.

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                                 No. 11-30196

within the neighborhood. Most notably, such businesses must now close by
midnight every day except for Friday and Saturday, when they must close by 1
a.m. They may not reopen until 11 a.m. the following day. The Ordinance also
regulates noise levels, security, parking, and the external appearances of
buildings in Fat City. For example, the Ordinance requires that bar owners
install 24-hour time lapse surveillance cameras. It also requires property
owners to remove litter found within 200 feet of their property lines, remove
graffiti within 48 hours, maintain vegetation in a manner specified in the
Ordinance, install soundproofing approved by the Parish, and report all
suspicious activity to law enforcement.
      The Ordinance was passed as part of the Envision Jefferson 2020
Comprehensive Plan adopted by the Parish on August 6, 2003, under which the
Jefferson Parish Planning Department was authorized to draft and submit
proposed amendments to the Jefferson Parish Code of Ordinances.              The
Ordinance here was developed during a series of public workshops held from
2008 through 2010 during which property owners, residents, and business
owners from the surrounding community worked with Parish leadership to
address the consequences of adult-oriented uses in the Fat City area, including
higher crime rates, negative influences on children, physical blight, and reduced
property values.
      This appeal concerns two lawsuits filed and consolidated in the district
court challenging the constitutionality of the Ordinance. Yur-Mar, L.L.C.,
operator of a Fat City bar, filed suit against the Parish and other defendants,
challenging the zoning regulations based on the United States Constitution and
state law. Subsequently, other Fat City business owners, Jason Jaume, Michael
Beecher, Our Kingdom, Inc., Joseph S. Ancona, Jr., and J.O.D., Inc. filed a
similar suit against the Parish, alleging that the zoning violates their rights
under the Due Process and Equal Protection Clauses of the United States and

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                                   No. 11-30196

Louisiana Constitutions and 42 U.S.C. § 1983. Plaintiffs in both suits sought
permanent injunctions prohibiting the enforcement of the Ordinance, as well as
monetary damages, punitive damages, interests, costs, and attorneys’ fees.
       The Parish filed a motion to dismiss for failure to state a claim under Rule
12(b)(6) of the Federal Rules of Civil Procedure. With Yur-Mar’s consent, the
district court dismissed all claims against the defendants other than the Parish.
It then granted the motion to dismiss as to the Parish and denied the plaintiffs’
motion for leave to amend. This appeal followed.
                           STANDARD OF REVIEW
       Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to
move for dismissal of a complaint when the plaintiff has failed to state a claim
upon which relief can be granted. This court reviews de novo a district court’s
decision to grant such a dismissal. Ramming v. United States, 281 F.3d 158, 161
(5th Cir. 2001). Accordingly, we apply the same standards as the district court
did in evaluating the sufficiency of the pleadings. In order to survive a 12(b)(6)
motion to dismiss, a plaintiff’s pleadings must allege “enough to raise a right to
relief above the speculative level” with facts sufficient to “state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570
(2007). A facially plausible claim “pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). The plaintiff need not
provide detailed factual allegations, but the plaintiff must provide more than a
“formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at
555.




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                                  No. 11-30196

                                 DISCUSSION
      I.    Taking Claim

      The United States Constitution prohibits the taking of private property for
public use without just compensation. A plaintiff pleads a claim of per se taking
where it alleges facts showing that the regulation (1) results in a permanent
physical invasion of property or (2) deprives a property owner of all economically
beneficial use of his land. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538
(2005). Appellants plead no facts that suggest either of these two categories
apply, so they have not stated a claim of per se taking.
      A balancing test applies to all regulatory takings that are not per se
takings. The Supreme Court has provided several factors for courts to consider,
including (1) “[t]he economic impact on the claimant,” (2) “the extent to which
the regulation has interfered with the distinct investment-backed expectations,”
and (3) “the character of the governmental action.” Penn Cent. Transp. Co. v.
City of New York, 438 U.S. 104, 124-25 (1978). In addition, “some adverse effect
on economic value will be tolerated in the interest of promoting the health,
safety, welfare, or morals of a community.” Tex. Manufactured Hous. Ass’n, Inc.
v. City of Nederland, 101 F.3d 1095, 1106 (5th Cir. 1996).             “[L]and-use
restrictions or controls to enhance the quality of life by preserving the character
and desirable aesthetic features of a city” are not generally takings. Penn Cent.,
438 U.S. at 129.
      Here, the limitations imposed by the Ordinance might have some adverse
economic effect on Appellants’ businesses by decreasing revenue and increasing
costs. However, most of Appellants’ possessory rights are left intact under the
Ordinance. They are still able to operate bars and other businesses, as they did
prior to the enactment of the new zoning rules. They can continue to sell alcohol.
The Ordinance aims to promote the health, safety, welfare, and morals of the


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                                  No. 11-30196

community by shutting down bars during the hours most closely associated with
dangerously high amounts of intoxication, drunk driving, violent crimes, etc. As
such, Appellants have failed to plead a “plausible” claim of unconstitutional
taking.
      II.   Lack of Rational Basis Claim

      Under both substantive due process and equal protection analyses,
governmental actions involving social and economic regulation that do not
interfere with the exercise of fundamental rights or rely upon inherently suspect
classifications such as race, religion or alienage are presumed to be
constitutionally valid. City of New Orleans v. Dukes, 427 U.S. 297, 303-04
(1976); Williamson v. Lee Optical of Oklahoma, 348 U.S. 483, 488 (1954). If no
such right or classification is implicated by the constitutional challenge to the
social and economic regulation, the court applies rational basis review that
requires only that it “be rationally related to a legitimate state interest.” Dukes,
427 U.S. at 303; Lee Optical, 348 U.S. at 490; Hidden Oaks Ltd. v. City of Austin,
138 F.3d 1036, 1044 (5th Cir. 1998). Indeed, “courts will not strike down state
laws regulating economic and social concerns merely ‘because they may be
unwise, improvident, or out of harmony with a particular school of thought.’ If
the challenged classification bears a reasonable relationship to the
accomplishment of some legitimate governmental objective, the statute must be
upheld.” Anderson v. Winter, 631 F.2d 1238, 1240-41 (5th Cir. 1980) (quoting
Lee Optical, 348 U.S. at 488). A zoning decision violates substantive due process
only if there is no “conceivable rational basis” under which the government
might have based its decision. Shelton v. City of College Station, 780 F.2d 475,
477 (5th Cir. 1986).
      By claiming that the Parish’s zoning regulations of Fat City violate the
business owners’ due process and equal protection rights, Appellants challenge


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                                  No. 11-30196

the constitutionality of a social and economic regulation. The regulation here is
explicitly intended to “enhance property values, promote economic development,
and provide identity and a sense of community for Fat City.” Such purposes
easily serve as the rational basis for a municipal zoning ordinance. Accordingly,
the district court did not err when it found that Appellants were unable to plead
a claim that the Parish lacked a rational basis for the Ordinance.
      III.   Arbitrary and Capricious Claim

      Appellants argue that the Parish acted in an arbitrary and capricious
manner in choosing the boundaries to which the Ordinance would apply and in
granting exemptions from the Ordinance for certain properties within Fat City.
They additionally argue that the Ordinance counts as arbitrary “spot zoning”
because the boundaries of the Fat City neighborhood governed by the Ordinance
do not correspond to any other Parish or district line or natural waterway, and
because the neighborhood is only four blocks wide.
      Spot zoning is an arbitrary zoning action inconsistent with the
comprehensive plan, character, or purposes of zoning in the surrounding area.
101A C.J.S. Zoning & Land Planning § 44 (1979). Spot zoning typically refers
to zoning requirements that affect only a single piece of property or a limited
area, ordinarily for the sole or primary benefit of a particular property owner.
Id. However, even in instances of spot zoning, differences in treatment of
similarly situated properties by a zoning regulation need only pass rational basis
review, unless the plaintiff can show that the differences relate to an inherently
suspect classification. Jackson Court Condos., Inc. v. City of New Orleans, 874
F.2d 1070, 1079 (5th Cir. 1989). In other words, unless a suspect classification
is implicated, spot zoning is valid as long as there is a rational basis for it. Id.
      In this case, the record before the district court shows that the Parish
formulated the zoning regulations at issue as part of an overall plan for the


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                                    No. 11-30196

neighborhood of Fat City and the surrounding areas. The plan took into account
the nature and character of Fat City, including its current property usage, crime
rates, parking arrangements, noise levels, etc. An extensive public hearing
process preceded the passage of the Ordinance by the Parish, a process in which
Appellants were free to participate. Furthermore, Plaintiffs’ complaints are
devoid of any facts showing an obvious beneficiary of the Ordinance, other than
the general community. Similarly, they pleaded no facts showing a targeting of
individual owners.
      Appellants’ allegations about the arbitrariness of the Ordinance’s
geographical boundary lines fail to provide facts supporting the conclusion that
a constitutional violation occurred. They point out that businesses located
across the street from certain Fat City businesses will fall outside of the
Ordinance’s boundaries and thus, not be regulated in the same way. While this
fact is uncontested, it is also irrelevant here. Zoning ordinances frequently
involve geographical boundaries.2         Such boundary lines must be drawn
somewhere and not all communities will have waterways and other “natural”
boundary lines. Thus, no matter where the line is drawn, there will necessarily
be properties not governed by the regulation on the other side of that line. If the
existence of non-ordinance-bound properties across the street from ordinance-
bound properties was sufficient to show that a zoning regulation was arbitrary
and capricious, then most geographical zoning regulations within a particular
jurisdiction would fail this legal test.       The logical upshot that Appellants
overlook is that their argument is an argument against geographical zoning
generally, not the Ordinance specifically. Neither case law nor sound policy
support this argument.



      2
        Some zoning ordinances might regulate solely according to use, but that is by no
means the only type of zoning generally deemed to pass constitutional muster.

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                                No. 11-30196

      Without more, Appellants fail to plead sufficient facts supporting their
claims. Twombly, 550 U.S. at 570. Consequently, the district court did not err
in dismissing this case.
      AFFIRMED.




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