Zia Shadows, L.L.C. v. City of Las Cruces, 2016 U.S. App. LEXIS 13391

Background

Zia Shadows operated a mobile‑home park in Las Cruces under a special‑use permit and later applied (2008) to convert the park to a Planned Unit Development (PUD) as its zoning compliance plan.
The City’s Planning & Zoning Commission recommended approval, but the City Council raised concerns about public‑benefit conditions (road widening payments or HUD‑defined affordable housing) and delayed/further conditioned approval; bankruptcy and foreclosure of Zia Shadows’ lender ultimately led to sale of the property.
Zia Shadows sued under 42 U.S.C. § 1983 claiming deprivation of property without due process (challenge to continued validity of the special‑use permit and to PUD approval process), a class‑of‑one equal‑protection violation, and First Amendment retaliation for plaintiffs’ prior public criticism of the City.
The district court granted summary judgment to the City on due‑process and equal‑protection claims; the First Amendment claim proceeded to jury trial and resulted in a verdict for the City; post‑trial motions were denied.
On appeal, Zia Shadows challenged (1) summary judgment on due process and equal protection, (2) a last‑minute change to the jury instruction on retaliation, (3) the district court’s refusal to strike a City employee juror for implied bias, and (4) that the jury verdict was against the clear weight of the evidence. The Tenth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Zia had a protected property interest in its special‑use permit and in prompt/unconditional PUD approval (due process)	Zia: had legitimate entitlement to keep its special‑use permit and to Community Development Dept. approval of its PUD (per code §38‑73) without Council delay/conditions	City: ordinances give Council final discretionary authority over PUD concept/final site plan (code §38‑49); special‑use permits may be modified/revoked; no mandatory entitlement	Court: no protected property interest; summary judgment for City affirmed
Whether the City violated equal protection via class‑of‑one treatment	Zia: City treated it differently (only park required to comply; greater financial scrutiny; post‑sale owner not required to follow same rules)	City: plaintiff must prove others similarly situated and differential treatment; Zia failed to present evidence of materially similar comparators or reasons for any differential treatment	Court: Zia failed burden to show similarly situated comparators or lack of reasonable basis; summary judgment for City affirmed
Whether district court abused discretion by changing the retaliation jury instruction after close of evidence	Zia: court should have enforced the parties’ stipulated instruction (no chilling‑of‑ordinary‑firmness element) and City was estopped from changing position after plaintiffs relied on it	City: stipulations on law do not bind the court; correct law requires objective chilling standard; change was timely under Rule 51	Court: court not bound by stipulation of law; correct instruction requires showing of chilling of a person of ordinary firmness (Worrell); Zia failed to show prejudice; no reversible error
Whether a City‑employee juror should have been struck for implied bias	Zia: employee of municipal party is presumptively biased and should be disqualified; juror might fear workplace repercussions	City: government employment alone does not create implied bias; juror’s duties (maintenance of pools) unrelated to zoning; no evidence of actual bias or special circumstances	Court: implied‑bias standard has high threshold; Wood and later precedent reject categorical disqualification of government employees; no implied bias here and district court did not abuse discretion

Key Cases Cited

Adler v. Wal‑Mart Stores, Inc., 144 F.3d 664 (10th Cir.) (summary judgment standard)
Hyde Park Co. v. Santa Fe City Council, 226 F.3d 1207 (10th Cir.) (property‑interest analysis in land‑use context)
Nichols v. Bd. of Cty. Comm’rs, 506 F.3d 962 (10th Cir.) (due‑process property interest requires legally mandatory decision)
Worrell v. Henry, 219 F.3d 1197 (10th Cir.) (elements of First Amendment retaliation; objective chilling standard)
Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210 (10th Cir.) (class‑of‑one equal‑protection standard)
Village of Willowbrook v. Olech, 528 U.S. 562 (U.S.) (class‑of‑one theory)
Bangert Bros. Const. Co. v. Kiewit W. Co., 310 F.3d 1278 (10th Cir.) (standard for reviewing sufficiency of evidence supporting jury verdict)
Abuan v. Level 3 Commc’ns, Inc., 353 F.3d 1158 (10th Cir.) (when verdict may be overturned because evidence points only one way)
Crawford v. United States, 212 U.S. 183 (U.S.) (common‑law rule disqualifying party employees from juries)
United States v. Wood, 299 U.S. 123 (U.S.) (rejection of categorical disqualification for government employees)
Getter v. Wal‑Mart Stores, Inc., 66 F.3d 1119 (10th Cir.) (implied bias where juror had financial ties to party)
Vasey v. Martin Marietta Corp., 29 F.3d 1460 (10th Cir.) (presumed bias in extraordinary situations; employee relationships discussed)