State Farm Mutual Automobile Insurance Co. v. City of Lakewood

Donald Lawhead and others (the petitioners) filed a petition to organize a 230-acre tract of land as a special district (the district) within the City of Lakewood (defendant). The petitioners owned undeveloped land within the district. State Farm Mutual Automobile Insurance Company and other opponents of the petition (the opponents) (plaintiffs) owned developed property within the district. The Lakewood city council published notice of the petition in the newspaper and held a public hearing although the special-district statute did not require a hearing. The statute did contain certain requirements and allowances, such as a requirement of a certain number of signatures to file a special-district petition, the ability of opponents to a petition to exclude their specific properties from the special district, and a final vote of the affected residents to ratify the city council’s decision. Ultimately, Lakewood approved the petition. The opponents appealed the approval in state court, arguing that their procedural-due-process rights were violated because not all opponents received notice of the petition and hearing. The opponents also claimed that their substantive-due-process rights were violated because the special-district statute did not contain explicit standards governing the city council’s review of the petition. The district court upheld the approval of the petition. The opponents appealed.