Holt v. Town of Stonington, 2014 U.S. App. LEXIS 16839

Background

Holt bought an undersized Stonington lot in 2005 after a zoning enforcement officer issued an opinion letter indicating the lot might be buildable.
The lot had been reduced in size by a 1981 ten-foot sale recorded in town records; that fact was overlooked in the 2005 opinion letter.
Holt applied for a zoning permit but withdrew the application in January 2006 before the town acted; a neighbor had challenged the 2005 letter to the zoning board of appeals.
The zoning board later reversed the 2005 opinion based on the 1981 alteration; Connecticut appellate court held the 2005 letter was an advisory opinion not subject to appeal.
Holt sued in federal court (diversity) seeking equitable relief (estoppel/injunction) to prevent the Town from denying her ability to build; after a bench trial the district court entered an injunction for Holt.
On appeal the Second Circuit held Holt failed to exhaust available Connecticut administrative remedies before litigating in court, so the district court lacked subject-matter jurisdiction; the judgment was vacated and the case remanded with instructions to dismiss without prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal court had jurisdiction given Connecticut's exhaustion requirement	Holt argued she need not exhaust because administrative remedies were inadequate or futile for obtaining estoppel relief	Town argued Holt failed to pursue available local zoning procedures (permit, variance, appeals) before suing	Court held Holt failed to exhaust administrative remedies; jurisdiction lacking and dismissal required
Whether the 2005 zoning officer letter was an appealable administrative decision	Holt relied on the 2005 letter as a basis to proceed	Town maintained the letter was advisory and not a final, appealable determination	Court referenced state appellate holding that the 2005 letter was preliminary/advisory and not appealable
Whether administrative process could provide the relief Holt sought (estoppel)	Holt argued estoppel-equitable relief would be unavailable or inadequate through administrative process	Town argued administrative channels could grant the practical relief (permits/variance) Holt wanted	Court held administrative remedies could provide the relief sought; plaintiff’s preference for judicial remedy did not make administrative remedy inadequate
Whether futility or bias excused exhaustion	Holt alleged partiality and prior adverse indications by town officials made exhaustion futile	Town argued mere possibility of denial or potential bias does not excuse exhaustion	Court held Holt did not show futility or actual bias sufficient to excuse exhaustion

Key Cases Cited

Leveraged Leasing Admin. Corp. v. PacifiCorp Capital, Inc., 87 F.3d 44 (2d Cir. 1996) (subject-matter jurisdiction is nonwaivable and must be addressed first)
Concerned Citizens of Sterling v. Town of Sterling, 204 Conn. 551 (Conn. 1987) (exhaustion fosters orderly administrative adjudication and benefits from agency findings)
Simko v. Ervin, 234 Conn. 498 (Conn. 1995) (courts should avoid prematurely deciding matters that agencies may resolve; futility standard)
O & G Indus., Inc. v. Planning & Zoning Comm’n, 232 Conn. 419 (Conn. 1995) (administrative remedies adequate when they can grant requested relief and permit judicial review)
Garcia v. City of Hartford, 292 Conn. 334 (Conn. 2009) (failure to exhaust administrative remedies requires dismissal)
Piquet v. Town of Chester, 306 Conn. 173 (Conn. 2012) (clarifies when advisory letters are not appealable decisions)
Holt v. Zoning Bd. of Appeals, 114 Conn. App. 13 (Conn. App. 2009) (state appellate decision that the 2005 opinion letter was a preliminary, advisory opinion)
Fairchild Heights Residents Ass’n v. Fairchild Heights, Inc., 310 Conn. 797 (Conn. 2014) (administrative remedies must be exhausted before seeking judicial relief)