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THE CITY OF MYRTLE BEACH; MARK
MCBRIDE, Individually; JUDY
RODMAN, Individually; RACHAEL
BROADHURST, Individually; CHARLES
MARTINO, Individually; WILSON
CAIN, Individually; CRAIN WOODS,
Individually; LARRY BRAGG,
Individually; TOM CONN,
Individually; TOM DAVIS,
Individually; SALLY HOWARD,
Individually; FRED ROURK,
Individually,
Defendants-Appellees.
No. 04-2171
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COUNSEL
ARGUED: Howell V. Bellamy, Jr., BELLAMY, RUTENBERG,
COPELAND, EPPS, GRAVELY & BOWERS, P.A., Myrtle Beach,
South Carolina, for Appellants. Frances Isaac Cantwell, REGAN &
CANTWELL, Charleston, South Carolina, for Appellees. ON
BRIEF: Douglas M. Zayicek, BELLAMY, RUTENBERG, COPELAND, EPPS, GRAVELY & BOWERS, P.A., Myrtle Beach, South
Carolina, for Appellants. William B. Regan, REGAN & CANTWELL, Charleston, South Carolina; L. Gregory Cook Horton,
Adriane Malanos Belton, BUIST, MOORE, SMYTHE & MCGEE,
P.A., Charleston, South Carolina, for Appellees.
OPINION
WIDENER, Circuit Judge:
Plaintiffs, Sunrise Corporation of Myrtle Beach, Boulevard Development LLC, and S&H Development, Inc. (collectively Sunrise),1
appeal from the district courts granting of defendant the City of Myrtle Beachs (Myrtle Beach) motions for summary judgment.2 In the
underlying case Sunrise was seeking damages for violations of the
Due Process, Equal Protection and Takings Clauses of the Constitu1
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voiced opposition to the proposal. Five days later the City Council
denied the proposal because of its view that the proposal violated sections 601 and 604 of the City Code. Plaintiffs then appealed the decision of the City Council to the Circuit Court.
While the appeal of the City Councils decision was still pending,
plaintiffs brought the instant action in the Court of Common Pleas of
Horry County, a state court, seeking to recover their pre-development
costs as well as lost profits from the pre-sale of units in the proposed
tower. The complaint asserted causes of action against the City Council as well as several individual members of the Board. The complaint
sought damages under 42 U.S.C. 1983 for violations of the Due
Process, Equal Protection, and Takings Clauses; 42 U.S.C. 1988 for
attorneys fees; and inverse condemnation under South Carolina state
law. The defendants then removed the case to federal district court.
The parties agreed to stay this action until the resolution of the state
court appeal of the City Councils denial of plaintiffs proposal.
On May 13, 1999, the Court of Common Pleas issued an order
reversing the decision of the City Council withholding the permit,
finding that Myrtle Beachs decision violated the holding of Peterson
Outdoor Advertising v. City of Myrtle Beach, 489 S.E.2d 630 (S.C.
1997)(Boards denial of proposal must be based on application of the
City Code to the facts of the case), because it was arbitrary, subjective, without evidentiary support, an abuse of discretion, and a denial
of plaintiffs due process and equal protection rights. The court then
determined that re-application would be futile and ordered Myrtle
Beach to issue the permit to Sunrise. At some point in 1999, plaintiffs
sold the site for approximately four million dollars.
Myrtle Beach appealed the Court of Common Pleas decision to the
South Carolina Court of Appeals, which affirmed in 2001. An appeal
was then taken by Myrtle Beach to the Supreme Court of South Carolina, which initially granted certiorari, but later dismissed the writ as
improvidently granted. At that point defendants made the permit
available to plaintiffs.
After the Supreme Court of South Carolina dismissed the writ of
certiorari, the district court lifted its stay in this case, and both parties
later filed motions for summary judgment. At the hearing on the
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file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Anderson v. Liberty Lobby, 477 U.S.
242, 247 (1986).
III.
Plaintiffs assert that the district court erred by not applying the doctrine of res judicata to bar Myrtle Beach from arguing that its actions
did not violate their Constitutional rights. The judgment they argue
should be given res judicata effect is the decision of the Common
Pleas Court which stated that Myrtle Beachs actions were "arbitrary,
subjective, without evidentiary support, an abuse of discretion, merely
a pretense to stop development, and a denial of Plaintiffs due process
and equal protection rights."
Under 28 U.S.C. 1738, federal courts must give full faith and
credit to state court judgments. This includes the application of state
preclusion rules to determine whether a prior state court judgment has
res judicata effect in a 1983 action. Dionne v. Mayor and City
Council of Baltimore, 40 F.3d 677, 682 (4th Cir. 1994). Under South
Carolina law, to establish res judicata a party must show "(1) identity
of the parties; (2) identity of the subject matter; and (3) adjudication
of the issue in the former suit." Plum Creek Dev. Co., Inc. v. City of
Conway, 512 S.E.2d 106, 109 (S.C. 1999).
Even if we consider the requirement of identity of the subject matter to be satisfied, which is not at all certain, the federal Constitutional
rights of due process and equal protection were not adjudicated in the
South Carolina Court of Appeals.6 That proceeding was nothing other
than a court review of an administrative determination by local zoning
authority. That court summarized its decision as follows: "We conclude the decision of City Council was arbitrary because it was based,
not on the evidence in the record and the esthetic concerns of the
CABs ordinance, but upon the objections of citizens of the neighborhood who wanted to stop further development in the area." JA 425.
This decision is an indication of a mistake by the local zoning authori6
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ties and hardly conclusive evidence, even if evidence at all, of a violation of due process and equal protection rights. It is no indication that
such federal Constitutional rights were decided in the decision of the
South Carolina Court of Appeals, and we so hold.
IV.
Plaintiffs next assert that the district court erred in dismissing their
due process claims. To establish a violation of procedural due process, plaintiffs must show that (1) they had property or a property
interest (2) of which the defendant deprived them (3) without due process of law. Sylvia Dev. Corp. v. Calvert County, Md., 48 F.3d 810,
826 (4th Cir. 1995). To establish a violation of substantive due process, plaintiffs must "demonstrate (1) that they had property or a
property interest; (2) that the state deprived them of this property or
property interest; and (3) that the states action falls so far beyond the
outer limits of legitimate governmental authority that no process
could cure the deficiency." Sylvia Dev. Corp., 48 F.3d at 827 (citing
Love v. Pepersack, 47 F.3d 120, 122 (4th Cir. 1995))(emphasis in
original).
We are of opinion that plaintiffs received due process, both procedural and substantive. Plaintiffs claim that their due process rights
were violated because the hearings they received were unfair. Even
if true, which we do not decide, this does not change the fact that
plaintiffs received four levels of review, in each of which they were
permitted to present their side of the controversy.7 In cases such as
this we review the state process as a whole, and do not look only to
what happened in front of the Board. See e.g. Tri County Paving, Inc.
v. Ashe County, 281 F.3d 430, 437 (4th Cir. 2002)(a "due process violation actionable under 1983 is not complete when the deprivation
occurs; it is only complete if and when the State fails to provide due
process")(quoting Fields v. Durham, 909 F.2d 94, 98 (4th Cir. 1990)).
While it is true that there were several levels of judicial and administrative review, plaintiffs received the very remedy they sought, the
permit to develop the property. Indeed, the very extent of review is
7
The decision by the Board was reviewed by the City Council, then the
Court of Common Pleas, then the South Carolina Court of Appeals, and
finally the South Carolina Supreme Court.
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Our reasoning in Sylvia applies here, and we apply it: "The fact that
established state procedures were available to address and correct illegal
actions by the Board belie the existence of a substantive due process
claim." Sylvia, 48 F.3d at 829.
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10
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The South Carolina court in Sea Cabins refers to the same as physical
and regulatory. 548 S.E.2d at 601.
10
The City did not deny plaintiffs all economically viable use because
the original inn and restaurant remained open while this case was pending. Nor were the plaintiffs deprived of any use they sought which conformed with the City zoning laws. The sought-for permit issued.
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