Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 87 C 6568 -- Nicolas J. Bua, Judge.
Wood, Jr. and Ripple, Circuit Judges, and Eschbach, Senior Circuit Judge.
Bijan and Fahimeh Tabrizi filed a complaint against the Village of Glen Ellyn, Illinois (the Village) alleging racial discrimination in the denial of a zoning variance application. See R.I; see also 42 U.S.C. § 1982 (Civil Rights Act of 1866); 42 U.S.C. §§ 3604, 3610(d), 3812(a) (Fair Housing Act).*fn1 The district court dismissed the complaint for failure to state a claim on which relief could be granted. See Fed.R.Civ.P. 12(b)(6). The Village then petitioned the district court for an award of sanctions under Federal Rule of Civil Procedure 11 and for a reasonable attorneys fee under 42 U.S.C. § 1988. The district court denied that petition, and the Village now appeals. We affirm the judgment of the district court.
The plaintiffs -- Bijan and Fahimeh Tabrizi -- are an Iranian-American couple who own an undeveloped 10,170-square-foot lot in Glen Ellyn. Seeking to construct a single-family dwelling on the lot, the Tabrizis first applied for a construction permit; this application was denied because the lot did not have sixty-six feet of frontage, as required by the Village's zoning laws. Accordingly, the Tabrizis next sought a variance to the zoning restriction so that they could begin construction. However, the Village Board of Trustees denied this application on August 25, 1986.
Based on this denial of the variance application, the Tabrizis filed a complaint with the Department of Housing and Urban Development (HUD); after an investigation, the agency apparently concluded that the Village had engaged in racially discriminatory actions toward the Tabrizis.*fn2 HUD sought to remedy the situation through voluntary compliance, but the Village refused to participate. Consequently, the Tabrizis brought this suit. In their complaint, the Tabrizis alleged that between 1980 and 1986, the Village granted all variance requests for lots in excess of 8,000 square feet and that all requests were made by "white-ethnically neutral" property owners. R.I at 2, para. 8. Additionally, according to their complaint, over seventy percent of the dwellings within one-half mile of the Tabrizis' property are located on lots with less than sixty-six feet of frontage. Finally, the Tabrizis also alleged that the Village's denial of their request for a variance was due to racial- and ethnic-based animus against them because they are "non-white, ethnically distinguishable individuals." Id. at 2, para. 9. After making these allegations, the Tabrizis spelled out four counts for relief: Count I alleged that the Village had interfered with their use and enjoyment of their property and, thus, they had been denied equal protection of the laws in violation of section 1982;*fn3 Count II alleged that the Village had discriminated against them in violation of the Fair Housing Act, see 42 U.S.C. § 3604(b); Count III alleged that the Village had violated the Illinois state constitution's prohibition on the uncompensated taking of public property; and Count IV alleged that the Village maintains a policy of discouraging construction, rental, or purchase of housing for nonwhites contrary to the Fair Housing Act, see 42 U.S.C. § 3604(c). The Village answered by submitting that the Tabrizis' federal-law claims -- Counts I, II, and IV -- failed to state causes of action and should be dismissed.
The district court referred the case to a magistrate, who recommended dismissal. The magistrate determined that, with regard to the section 1982 claim, the plaintiffs failed to state a claim for deprivation of a property interest, and, with regard to the Fair Housing Act claims, the plaintiffs' claims were barred by the statute of limitations. See R.24 at 3-5. The magistrate also recommended dismissal of the state-law claim. The district court adopted the magistrate's report in its entirety, see R.25, and dismissed the action. R.26.
B. Village's Sanctions and Attorney's Fees Petition
The Village subsequently petitioned the district court for sanctions and attorney's fees pursuant to Rule 11 of the Federal Rules of Civil Procedure and section 1988. R.29; 30. The Village contended that the Tabrizis' federal court complaint had been "frivolous, meritless and vexatious" so that attorney's fees were appropriate. R.29 at 1. The district court rejected this petition. See Tabrizi v. Village of Glen Ellyn, 684 F. Supp. 207 (N.D. Ill. 1988). The district court found that the Tabrizis did not bring their suit out of clear spite, in order to harass and embarrass the Village, but rather, out of a sincere belief that they could prevail. Id. at 209. Furthermore, in the district court's view, the complaint's defects were based on "inartful or incomplete pleadings" and "an honest misunderstanding of an ambiguous administrative scheme," id. at 209-10, so that sanctions were inappropriate. The Village now appeals that decision.*fn4