Wheeler v. City of Pleasant Grove (Wheeler III)

Joseph and Clarice Wheeler (the Wheelers) (plaintiffs) sold a parcel of property located in Pleasant Grove, Alabama (the city) (defendant) to Cliff Development Corp. (plaintiff) for $160,000. Cliff Development planned to build a 120-unit apartment complex on the property. Finding that the apartment complex was permissible under the applicable zoning ordinances, the city issued a building permit to Cliff Development. The majority of the city’s citizens opposed the development of the apartment complex. Because of this opposition, the city passed an ordinance prohibiting the development of apartment complexes within the city. The Wheelers and Cliff Development filed a lawsuit against the city. The district court ruled for the Wheelers and Cliff Development, finding that the ordinance was arbitrary, capricious, and confiscatory in nature. The district court issued an injunction prohibiting the city from enforcing the ordinance but declined to award damages to Cliff Development and the Wheelers, finding that city officials were entitled to qualified immunity. The Wheelers and Cliff Development appealed, and the United States Court of Appeals for the Fifth Circuit affirmed the ruling that the ordinance was unconstitutional but reversed the district court’s qualified-immunity ruling and remanded for a determination of damages. On remand, the district court again refused to award damages, ruling that the Wheelers and Cliff Development had not suffered a compensable injury. The Wheelers and Cliff Development again appealed, and the United States Court of Appeals for the Eleventh Circuit (formerly part of the Fifth Circuit) again reversed, ruling that the city’s unconstitutional conduct had caused damage, and the appellate court again remanded for a determination of damages. On the second remand, the district court found that the value of the property had actually increased since the enactment of the city’s ordinance and awarded the Wheelers nominal damages of $1. The district court awarded Cliff Development damages for the increased cost of construction and financing. The city appealed, and the Wheelers and Cliff Development cross-appealed.