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Pulte Home Corp. v. Montgomery County

United States District Court, D. Maryland

May 31, 2017

PULTE HOME CORPORATION and SHILOH FARM INVESTMENTS, LLC, Plaintiffs,
v.
MONTGOMERY COUNTY, MARYLAND, et al, Defendants.

          MEMORANDUM OPINION

          Timothy J. Sullivan United States Magistrate Judge

         This case is a civil rights action brought by Pulte Home Corporation and Shiloh Farm Investments, LLC (collectively, "Pulte") against Montgomery County, Maryland ("County") and the Maryland-National Capital Park and Planning Commission ("MNCPPC") (collectively, "Defendants"). The action centers on the Defendants' enactment of land use legislation that adversely affected Pulte's interests in approximately 541 acres of land that it owns in Clarksburg, Maryland. Pulte alleges that the Defendants violated its constitutional rights to due process and equal protection, and that the Defendants' actions amounted to a taking of private property requiring just compensation.[1] Judge Hazel entered a scheduling order on January 28, 2016 (ECF No. 59) and discovery has been ongoing since that time. The current discovery deadline is January 25, 2018. (ECF No. 164.) Several motions related to discovery disputes are pending before the Court.[2] This memorandum addresses the motions filed at ECF Nos. 113 and 116, which concern Pulte's efforts to obtain discovery from the County and the County's objection to those efforts on the basis of the legislative and executive privileges.

         I. Procedural Background

         On June 16, 2016, Judge Hazel issued a letter order denying the motions for protective order filed by the Defendants. (ECF No. 81.) In their motions (ECF Nos. 70 & 71), the Defendants sought a protective order shielding them from discovery on the basis of the legislative and executive privileges. At that time, however, no discovery requests had been propounded on the Defendants. Judge Hazel found that the Defendants' assertions of the legislative and executive privileges could not be decided preemptively, where no discovery requests had been propounded, and denied the motions for protective order. Citing E.E.O.C. v. Washington Suburban Sanitary Comm'n, 631 F.3d 174, 181 (4th Cir. 2011) [hereinafter Washington Suburban], Judge Hazel also noted that the assertion of a “blanket privilege” would be inappropriate, and that only documents related to “legislative activities” could be protected by the legislative privilege. (ECF No. 81 at 2.)

         Approximately two weeks after Judge Hazel issued his letter order, Pulte propounded document production requests on the Defendants. (See ECF No. 113-2 at 1.) Pulte sought documents from nine current County Councilmembers, four former County Councilmembers, three County Council staff persons, the County Executive, and one member of the County Executive's staff (collectively, “the custodians”). (Id. at 2.) The document requests cover a wide range of subjects, but they are all concerned with the purportedly unconstitutional actions taken by the Defendants in this case. The County has again asserted the legislative and executive privileges on behalf of the custodians.[3] Both the County and Pulte have complied with the requirements of Local Rule 104.7 and 104.8.[4] The Court has had the benefit of the parties' oral arguments, which were presented during a motions hearing held on January 12, 2017. (ECF Nos. 129 & 130.) Pulte's motion to compel (ECF No. 113) and the County's cross-motion for protective order (ECF No. 116) are both ripe for decision.

         II. The Legislative and Executive Privileges

         Under Rule 26, “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, ” whether or not the information would be admissible in evidence. Fed.R.Civ.P. 26(b)(1). To that end, Rule 34 permits a party to obtain from any other party documents or electronically stored information from which relevant information can be obtained. Fed.R.Civ.P. 34(a)(1)(A). If a party refuses to produce documents responsive to a document production request, Rule 37 permits the requesting party to move for an order compelling the production of such discovery. Fed.R.Civ.P. 37(a)(3)(B). Conversely, a party withholding documents may move for a protective order precluding the discovery sought by the requesting party. Fed.R.Civ.P. 26(c).

         In federal court, claims of legislative privilege related to acts done in a state or local legislative capacity are governed by federal common law. See Bethune-Hill v. Virginia State Bd. of Elections, 114 F.Supp.3d 323, 333 (E.D. Va. 2015); Lee v. Virginia State Bd. of Elections, No. 15-357, 2015 WL 9461505, at *3 (E.D. Va. Dec. 23, 2015). The same is true of claims of executive privilege raised in cases before a federal court by federal question jurisdiction.[5] See Jones v. Murphy, 256 F.R.D. 510, 515 n.5 (D. Md. 2008), aff'd, No. CCB-05-1287, 2009 WL 604937 (D. Md. Feb. 23, 2009).

         A. Legislative Privilege

         The legislative privilege has its roots in the parallel concept of legislative immunity, under which the Speech or Debate Clause provides immunity from suit to federal legislators. Washington Suburban, 631 F.3d at 180. Legislative immunity guarantees the right “of legislators to be free from arrest or civil process for what they do or say in legislative proceedings.” Id. (citing Tenney v. Brandhove, 341 U.S. 367, 372 (1951)). Legislative immunity has been extended broadly. Washington Suburban, 631 F.3d at 181 (collecting cases). It covers state and local legislators, even if the body to which the legislators belong lacks immunity for its legislative acts. Id. It also “covers all those properly acting in a legislative capacity, not just actual officeholders.” Id. “The determination of legislative immunity is based on the function being fulfilled-not the title of the actor claiming immunity.” McCray v. Maryland Dept. of Transp., 741 F.3d 480, 485 (4th Cir. 2014).

         Courts have recognized that important public policies buttress the doctrine of legislative immunity. Id. Legislative immunity “provides legislators with the breathing room necessary” to make choices on difficult decisions, uninhibited by judicial interference and the fear of personal liability. Id. It allows legislators to “focus on their public duties” instead of attending to the distractions and costs of lawsuits, and “increases the caliber of our elected officials by preventing the threat of liability from significantly deterring service.” Id.

         The legislative privilege “is related to, but distinct from, the concept of legislative immunity.” N. Carolina State Conference v. McCrory, No. 13-658, 2015 WL 12683665, at *3 (M.D. N.C. Feb. 4, 2015) (quoting Favors v. Cuomo, 285 F.R.D. 187, 209 (E.D.N.Y. 2012)). It exists to “safeguard . . . legislative immunity and to further encourage the republican values it promotes.” Washington Suburban, 631 F.3d at 181. The legislative privilege extends to discovery, thus allowing legislators and their staff “to focus on their public duties by removing the costs and distractions attending lawsuits, ” and shielding them from “political wars of attrition in which their opponents try to defeat them through litigation rather than at the ballot box.” Id.; see also Burtnick v. McLean, 76 F.3d 611, 613 (4th Cir. 1996). Where a plaintiff seeks “to compel information from legislative actors about their legislative activities, ” the legislative privilege protects them from compliance. Washington Suburban, 631 F.3d at 181.

         In “civil suits brought by private plaintiffs to vindicate private rights, ” the legislative privilege is absolute.[6] Bethune-Hill, 114 F.Supp.3d at 335. It is also broad in application. It protects against discovery into all acts that occur in the “sphere of legitimate legislative activity.” See Baker v. Mayor and City Council of Baltimore, 894 F.2d 679, 681 (4th Cir. 1990); Washington Suburban, 631 F.3d at 181. The privilege is a shield against the compelled production of documents and deposition testimony. See id.; see also Brown & Williamson Tobacco Corp. v. Williams, 62 F.3d 408, 421 (D.C. Cir. 1995). Accordingly, once a court determines that a party's discovery requests seek information about acts that took place in the “sphere of legitimate legislative activity, ” the legislative privilege will act as a bar to the compelled production of discovery.[7]

         The core arguments presented by Pulte and the County in support of their respective motions to compel and for protective order are as follows. Pulte argues that the legislative privilege does not apply to the discovery it seeks because the custodians' activity was not legitimate or legislative. It was not legitimate because the legislators purportedly violated a local ethics law. It was not legislative because the challenged acts were, by and large, ministerial and administrative. And, to the extent that the acts were legitimate and legislative, some of the discovery predates those acts, so it cannot be protected by the legislative privilege. Pulte also argues that even if the legislative privilege did apply, it has been waived by the custodians' disclosures to third parties. The County argues that the privileges it asserts are broad, that all of the challenged acts were done in the “sphere of legitimate legislative activity, ” that the executive actors are also protected by the executive privilege, and that the doctrine of third party waiver does not apply.[8] Each of these arguments is addressed below.

         1. Pulte Seeks Discovery About Legislative Activities

         Pulte argues that the County's broad assertion of the legislative privilege is improper because many of the requested documents relate to non-legislative activities. For example, citing Front Royal & Warren Cnty. Indus. Park Corp. v. Town of Front Royal, 865 F.2d 77, 79 (4th Cir. 1989), Pulte states that as a matter of law, the denial or approval of a water and sewer change application is not a legislative action. (ECF No. 113-2 at 16.) Similarly, Pulte argues that master plan amendments are not legislative acts because they merely “serve as a guide, ” see W. Montgomery Cnty. Citizens Ass'n v. Maryland-Nat'l Capital Park & Planning Comm'n, 522 A.2d 1328, 1334 (Md. 1987), and do not carry the force of law as do zoning ordinances. (ECF No. 113-26 at 13.) In addition, as the master plan amendment at issue was passed by resolution, Pulte interprets it as a signal that the amendment was not a legislative act. Id. Pulte also notes that its discovery requests seek documents reaching back as far as January 1, 2003, at least six years before the first of the Defendants' challenged acts occurred. (Id.) Given that such documents would predate the legislative activity at issue, they necessarily could not be shielded from discovery by the legislative privilege. (Id.) Pulte seeks discovery related to all of these acts and argues that the legislative privilege does not apply.

         The County argues that the acts alleged in Pulte's Complaint were all legislative in nature, and therefore protected from disclosure by the legislative privilege. (ECF No. 116-4 at 12.) The Court of Appeals of Maryland has noted that planning and zoning actions are legislative when they “decide questions of law and policy and discretion” and have “broad[], community-wide implications, which encompass considerations affecting the entire planning area or zoning district.” Kenwood Gardens Condominiums, Inc. v. Whalen Properties, LLC, 144 A.3d 647, 659-60 (Md. 2016). The County argues that its actions-concerning the water and sewer change request, the zoning changes, and the master plan amendment-all decided questions of law and policy, were within the County's discretion, and have broad implications that impact the entire community.

         With regard to Pulte's water and sewer change request, the County states that the Front Royal case is inapposite. (ECF NO. 116-4 at 13.) In Front Royal, a court had previously ordered a municipality to provide sewer service to certain landowners, thus removing any discretion the municipality might otherwise have had to act on the request for sewer service. 865 F.2d at 79. Because discretion is a hallmark of legislative activity, its absence in Front Royal was dispositive. Here, the County retained discretion to act on Pulte's water and sewer change request, and there is no suggestion that it had previously been ordered by a court to grant the request, as had been the case in Front Royal.

         Regarding the County's amendment to the 1994 Master Plan, the County states that Pulte's reliance on the W. Montgomery case is misplaced. (ECF No. 116-4 at 14-15.) This is so because W. Montgomery cited with approval cases that found master planning to be a legislative process. (Id.) And in any event, Maryland law has changed since that time, with the General Assembly's passage of a law that requires each local jurisdiction “to implement the provisions of its local comprehensive plan” through acts that are “consistent with the plan.” (Id.) The County notes that this law specifically abrogated the holding of Trail v. Terrapin Run, 943 A.2d 1191 (Md. 2008), which Pulte cites in its memorandum. (Id.) Because municipalities must make zoning decisions that are consistent with their master plans, the master plans are not advisory; they have the binding force of law. (Id.) And finally, the County notes that amending a master plan by resolution does not make the master plan or its amendment non-legislative. The Court of Appeals recognized as much in Kenwood Gardens, where a resolution that allowed a planned unit development was found to be legislative in nature. 144 A.3d at 661.

         After thorough consideration, I find that the documents which Pulte seeks are all related to legislative acts. With respect to each act, the County is vested with considerable discretion. The acts also had community-wide implications. Whether they were passed by resolution or some other mechanism, they bear the hallmarks that characterize legislative acts.[9] Pulte's challenge to the County's assertion of the legislative privilege on the basis of the acts not being “legislative” is without merit.

         I also reject Pulte's challenge to the assertion of the privilege for documents that predate the legislation in question. The legislative privilege extends to all acts that occur within the sphere of legitimate legislative activity. Pulte has pointed to no authority to suggest that it may only be asserted with respect to acts that are the subject of specific legal challenges. In this way, Pulte far too narrowly construes the privilege. Pulte's discovery requests seek information about the legislative activities of the County in general. Even if some of those activities predate the actions that are challenged in this lawsuit, they remain legislative activities and are thereby protected by the legislative privilege. Furthermore, to the extent that documents exist that are not related to legislative activities, it is not clear how such documents would be relevant to the claims or defenses in this case. See generally In re Hubbard, 803 F.3d 1298, 1311 (11th Cir. 2015) (“None of the relevant information sought in this case could have been outside of the legislative privilege.”).

         2. The Legislative Activities Were Legitimate

         Pulte argues that it is entitled to discovery regarding the County's activities that violated a Montgomery County ethics law and were therefore illegitimate. (ECF No. 113-2 at 17-18.) Pulte contends that the County violated the law in two ways. First, by engaging in off-the-record communications, the custodians violated the law's prohibition against decision-makers considering “any communication made outside of the record regarding any matter that must be decided on the basis of a record after an application is filed or a proceeding is otherwise initiated.” Mont. Cnty. Public Ethics Law § 19A-15(b)(1). Second, by engaging in communications after the close of the public comment period, the County violated Pulte's rights to procedural due process. According to Pulte, these “illegal” acts remove the custodians' activities from the sphere of legitimate legislative activity. Because the legislative privilege only applies to “legitimate” legislative activities, Pulte concludes that these communications are illegitimate and therefore not privileged.

         The County disagrees with Pulte's interpretation of the Public Ethics Law and, more generally, the type of legislative activities that might qualify as “illegitimate.” (ECF No. 116-4 at 17-18.) According to the County, Pulte misconstrues a section of the Public Ethics Law that applies only to “quasi-judicial proceedings decided on a record.” (ECF No. 113-6 at 30.) Applying the provision to legislative decisions, the County notes, “would result in restricting a legislator's ability to communicate with constituents, interested parties (such as Pulte representatives) or subject-matter experts, all of whom are critical components of the legislative process.” (ECF No. 116-4 at 17.) Requiring legislation to “occur in a vacuum” would be inconsistent with the “free flow of written and oral communications . . . that is a normal, everyday part of the legislative process.” (Id.)

         It is not necessary for the Court to reach whether the County ran afoul of the Public Ethics Law or Pulte's procedural due process rights by engaging in off-the-record communications or considering communications made after the close of the public comment period. Even assuming that the custodians' activities were in violation of the Public Ethics Law or Pulte's procedural due process rights, this would be insufficient to render the actions “illegitimate.” If Pulte's argument were taken to its logical conclusion, the legislative privilege would be obsolete. This is so because whenever a procedural irregularity was alleged in a case, any resulting legislative actions could be deemed illegitimate, thus obviating the objective of the legislative privilege. If that occurred, the result would be that the legislative privilege would never apply in cases challenging legislative actions.

         In support of its claim that the Public Ethics Law applies to legislative decisions as well as quasi-judicial proceedings, Pulte cites Sugarloaf Citizens Ass'n, Inc. v. Gudis, 573 A.2d 1325, 1329 (Md. 1990). But Sugarloaf involved a different issue: a council member's vote on a piece of legislation despite a financial conflict of interest. And in any event, the court in Sugarloaf declined to enforce the Public Ethics Law because it found that the law's enforcement provision was unconstitutional. Pulte has not cited any authority where a court has found that a legislative action was “illegitimate” because of the violation of a law governing procedure.[10]

         Similarly, in Kenwood Gardens, which is cited by the County (ECF No. 116-4 at 5), the court held that even assuming that a councilmember committed an ethical violation in a legislative act, so long as the legislative body “was acting within its legal boundaries, ” the legislator's improper motivations would not be subject to judicial review. 144 A.3d at 663. Although Sugarloaf and Kenwood Gardens are not controlling authority, they demonstrate the reluctance of courts to overindulge in judicial review of legislative decisions, even where purportedly unethical conduct by legislators is alleged.

         The County's legislative actions were not rendered illegitimate because of any of the ethical and procedural violations that Pulte alleges. The actions were well within the legal boundaries in which the County was permitted to act, and were therefore legitimate. Accordingly, Pulte's contention that the ...


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