This is an interesting Supreme Court case which can be summarized very quickly: the court overrules the well-known Williamson County v Hamilton Bank case, 473 US 172 (1985), insofar as that case required a property owner claiming a violation of his Fifth Amendment rights by way of a taking of his property, does not now need to file in state court prior to pursuing his or her federal rights.
As you will probably recall, the Williamson County case made it harder to get to federal court in two ways, by first requiring that the property owner apply either to the zoning board, the planning commission, or any other administrative body, for any administrative relief which might be available, and by second, requiring that the lawsuit be filed in state court before proceeding to federal court. The latter requirement however was all-encompassing inasmuch as once a state court ruled adversely with regard to the federal claim, it was res judicata in federal court and the property owner was out of luck.
This decision, from my standpoint, simply allows a property owner to proceed in federal court without the necessity of filing in state court first. In Tennessee, many property owners might choose to go to state court anyway. I don't think this case alters the landscape in any significant way, but it does have the virtue of making takings claims somewhat simpler, and more sense to go.
Showing posts with label takings. Show all posts
Showing posts with label takings. Show all posts
Thursday, July 18, 2019
Wednesday, November 7, 2018
Cunningham v Bedford County -- Procedural Due Process
We have been reviewing the Cunningham v Bedford County case (copy found here) over the last several installments of this little zoning blog. We will continue today with a look at procedural due process.
The plaintiff also alleged a violation of procedural due process under both the US and Tennessee constitutions. The difficulty with this type of a claim is that there must be some constitutionally protected property interest that requires some degree of notice and opportunity to be heard. That property interest must be more than a unilateral expectation or an abstract need or desire, it must be a legitimate claim of entitlement created and defined by existing rules or understandings that come from some independent source such as Tennessee state law. The Court of Appeals concluded that here the plaintiff simply failed to demonstrate that he was entitled to have a zoning change and it was not therefore deprived of any procedural due process. He had no legitimate claim of entitlement to what is a discretionary decision by the local legislative body.
Once again, to a perhaps lesser extent in this instance, the decision turns on whether or not there was a rational basis for the failure to rezone the property. Having concluded that there was a rational basis for declining to change the zoning, there could not possibly be any claim of entitlement and as a result the procedural due process argument was doomed to failure.
I would go further and say that the procedural due process argument is somewhat difficult in the context of a zoning change. Perhaps if the zoning had been commercial and the County changed it to residential to the detriment of the owner, a procedural to process argument might have been more tenable. Under these circumstances though, it may be just too far a stretch. However, adding procedural and substantive due process claims to any case such as this is always worth considering and usually worth trying. Remember, that the local legislative body had cut off the plaintiff’s presentation of one of the hearings, and there were some allegations that at least the trial court found persuasive because of conflicts of interest by some members of the County commission.
Our next installment of this review of the Cunningham case will take a quick look at the alleged violations of substantive due process.
The plaintiff also alleged a violation of procedural due process under both the US and Tennessee constitutions. The difficulty with this type of a claim is that there must be some constitutionally protected property interest that requires some degree of notice and opportunity to be heard. That property interest must be more than a unilateral expectation or an abstract need or desire, it must be a legitimate claim of entitlement created and defined by existing rules or understandings that come from some independent source such as Tennessee state law. The Court of Appeals concluded that here the plaintiff simply failed to demonstrate that he was entitled to have a zoning change and it was not therefore deprived of any procedural due process. He had no legitimate claim of entitlement to what is a discretionary decision by the local legislative body.
Once again, to a perhaps lesser extent in this instance, the decision turns on whether or not there was a rational basis for the failure to rezone the property. Having concluded that there was a rational basis for declining to change the zoning, there could not possibly be any claim of entitlement and as a result the procedural due process argument was doomed to failure.
I would go further and say that the procedural due process argument is somewhat difficult in the context of a zoning change. Perhaps if the zoning had been commercial and the County changed it to residential to the detriment of the owner, a procedural to process argument might have been more tenable. Under these circumstances though, it may be just too far a stretch. However, adding procedural and substantive due process claims to any case such as this is always worth considering and usually worth trying. Remember, that the local legislative body had cut off the plaintiff’s presentation of one of the hearings, and there were some allegations that at least the trial court found persuasive because of conflicts of interest by some members of the County commission.
Our next installment of this review of the Cunningham case will take a quick look at the alleged violations of substantive due process.
Monday, November 5, 2018
Cunningham v Bedford County -- Takings Law
The Cunningham case (copy found here) also involved allegations of a regulatory taking by overbroad zoning. The property was zoned residential; the plaintiff argued that it should be zoned commercial and that the residential zoning worked a taking of the land. The lower court concluded that there was no taking based on the Tennessee Supreme Court reasoning in Phillips v Montgomery County, 442 S.W. 3d 233 (Tenn. 2014). The Court of Appeals affirmed.
The plaintiff evidently relied upon the fact that the plaintiff had been led to believe that the property would easily be rezoned to commercial and thus had legitimate investment backed expectations for commercial use of the land. Furthermore, because at some points in the rezoning process, the applicant was not permitted to make a presentation and because there might have been some conflicts of interest among the County commissioners, the argument was that the character of the governmental action was inherently suspect and taking should've been found.
The difficulty here is that was forced to rely on the multifactor analysis found in 10 Central Transportation v New York, 438 US 104 (1978). There are some cases involving overbroad regulatory actions, that somewhat easily fit into the proper analysis. For example, a required dedication for subdivision that does not ameliorate some significant impact of the development is simply a take. See Nolan v California Coastal Commission, 483 US 825 (1987). Or, if there is a regulation which completely eliminates the potential economic use of the land, that may be a taking per se. See Lucas v South Carolina Coastal Council, 505 US 1003 (1992). And certainly, if there is a physical invasion, no matter how slight, that is also a taking of a more traditional kind.
But if the governmental actions do not fit into any of those categories, Penn Central must be applied. The difficulty is that unlike in the other categories, there is no set formula for determining when the Constitution requires that economic injuries caused by public action be compensated. Penn Central suggested a few factors to include:
The economic impact on the claimant,
the extent to which the regulation has interfered with distinct investment backed expectations
and the character or extent of the governmental action.
However, as I've mentioned, balancing these factors is not nearly so simple as the more distinctive total take categories mentioned above. As a result, if the plaintiff has to rely on Penn Central, it is often difficult to prevail.
And certainly, that was true in this case. The Court of Appeals pointed out that the plaintiff purchased the property knowing it was zoned for residential use. He did not choose to make his contract contingent upon obtaining zoning change. His first application for a zoning change was made before he actually bought the property. The Court of Appeals did not believe that there was a significant economic impact. He could have drafted the contract in order to make sure that he did not have to buy the property unless the zoning change was obtained. In addition, his investment backed expectations were hopeful. There is no binding commitment that the zoning would be changed. Finally the character of the governmental action was a zoning application which was denied on a rational basis. Thus there was no element of a regulatory taking.
The difficulty I have is once again rooted in the conclusion that there was a rational basis for this decision. Both the planning official for the county, Chris White, and Lisa Keylon, an urban planner by training and education, indicated clearly that this area was prime commercial land and that the entire area ultimately would be rezoned to commercial. It may be that it was too soon to take the zoning in that direction, but it's unclear from the discussion of the facts by the Court of Appeals.
Assuming for example that there is not a rational basis for residential zoning at that location, that would lead to a conclusion of a regulatory taking and compensation paid by the local government.
But once again, this case gives the practicing bar a good idea of how strong a case you must have in order to prevail. Even with County representatives testifying that the land was prime commercial land, the Court of Appeals found a rational basis for the current zoning and ruled in favor of the county.
The plaintiff evidently relied upon the fact that the plaintiff had been led to believe that the property would easily be rezoned to commercial and thus had legitimate investment backed expectations for commercial use of the land. Furthermore, because at some points in the rezoning process, the applicant was not permitted to make a presentation and because there might have been some conflicts of interest among the County commissioners, the argument was that the character of the governmental action was inherently suspect and taking should've been found.
The difficulty here is that was forced to rely on the multifactor analysis found in 10 Central Transportation v New York, 438 US 104 (1978). There are some cases involving overbroad regulatory actions, that somewhat easily fit into the proper analysis. For example, a required dedication for subdivision that does not ameliorate some significant impact of the development is simply a take. See Nolan v California Coastal Commission, 483 US 825 (1987). Or, if there is a regulation which completely eliminates the potential economic use of the land, that may be a taking per se. See Lucas v South Carolina Coastal Council, 505 US 1003 (1992). And certainly, if there is a physical invasion, no matter how slight, that is also a taking of a more traditional kind.
But if the governmental actions do not fit into any of those categories, Penn Central must be applied. The difficulty is that unlike in the other categories, there is no set formula for determining when the Constitution requires that economic injuries caused by public action be compensated. Penn Central suggested a few factors to include:
The economic impact on the claimant,
the extent to which the regulation has interfered with distinct investment backed expectations
and the character or extent of the governmental action.
However, as I've mentioned, balancing these factors is not nearly so simple as the more distinctive total take categories mentioned above. As a result, if the plaintiff has to rely on Penn Central, it is often difficult to prevail.
And certainly, that was true in this case. The Court of Appeals pointed out that the plaintiff purchased the property knowing it was zoned for residential use. He did not choose to make his contract contingent upon obtaining zoning change. His first application for a zoning change was made before he actually bought the property. The Court of Appeals did not believe that there was a significant economic impact. He could have drafted the contract in order to make sure that he did not have to buy the property unless the zoning change was obtained. In addition, his investment backed expectations were hopeful. There is no binding commitment that the zoning would be changed. Finally the character of the governmental action was a zoning application which was denied on a rational basis. Thus there was no element of a regulatory taking.
The difficulty I have is once again rooted in the conclusion that there was a rational basis for this decision. Both the planning official for the county, Chris White, and Lisa Keylon, an urban planner by training and education, indicated clearly that this area was prime commercial land and that the entire area ultimately would be rezoned to commercial. It may be that it was too soon to take the zoning in that direction, but it's unclear from the discussion of the facts by the Court of Appeals.
Assuming for example that there is not a rational basis for residential zoning at that location, that would lead to a conclusion of a regulatory taking and compensation paid by the local government.
But once again, this case gives the practicing bar a good idea of how strong a case you must have in order to prevail. Even with County representatives testifying that the land was prime commercial land, the Court of Appeals found a rational basis for the current zoning and ruled in favor of the county.
Thursday, November 1, 2018
Cunningham v Bedford County -- Justification for Zoning Changes
Returning to this recent and very interesting case concerning zoning changes (a copy of which can be found here), keep in mind that challenging any legislative enactment is a difficult task. The Court of Appeals in Cunningham, cited many of the leading cases in the state, including Fallin v Knox County Board of Commissioners, 656 S.W. 2d 338 (Tenn. 1983), for the proposition that local legislative bodies are given broad discretion in enacting or amending zoning ordinances.
McCallen v City of Memphis, 786 SW 2d 633, 640 (Tenn. 1990).
The applicant argued that the opposition of nearby residents did not provide a basis on which the commission could lawfully refuse to rezone his property. Frankly, I agree with this point. It is not for the nearby residents to show a basis for a decision. From my perspective it takes the testimony of an expert witness, usually a land planner, to discuss whether a particular zoning classification on a particular property is rationally related to a legitimate governmental objective. Certainly, the residence may, at a public hearing, expressed their opinions. But those opinions are not well-informed and although they may have a political impact, have little or no impact on a judge making a final decision about the sustainability of the decision of the local legislative body.
Unfortunately, the cases relied upon by the applicant here were not legislative cases but rather administrative cases with a different standard of proof. The court easily blew through those, basically finding that neither of those cases was apposite to the facts presented here.
Interestingly, from my perspective, the Court of Appeals, sites an old favorite case of mine, Day v City of Decherd, 1998 WL 684533 (Tenn. App. 1990). In that case, Judge Cantrell, speaking for the Court of Appeals, noted that “legislative classifications in a zoning law are valid of any possible reason can be conceived to justify them.” And in an interesting comment on our political system:
Indeed, the Day case is somewhat similar. The owner there asked for a zoning change from residential to commercial as well, and ultimately did not have the votes to have it pass. There is one distinctive difference however, in the Day case, an urban planner, advise the planning commission that he had reservations about zoning this particular property commercial given other plans for that area of the city. As a result, there was an expert witness, so to speak, who provided some slim but necessary insight into the land use planning process and a reason to deny the zoning request.
In the Cunningham case on the other hand, the opposite appears to be true. Lisa Keylon, an urban planner by training and education, testified that this land was prime for commercial use. She testified that she thought the property should be rezoned to commercial. Now of course, in the absence of testimony by the plaintiff, a court must assume that most zoning enactments are valid. However, I feel certain that the plaintiff in this case adduced some proof, from an urban planner or otherwise, about the invalidity of the ordinance. At that point it seems to me that the burden should shift to the local legislative body to produce its own proof. Further, it appears that the County planners themselves testified the other way, that is, that the zoning change should be granted. Again, the Court of Appeals decision does not comment about this important testimony. The court focused solely on the adjacent neighbor and his opposition. But from my perspective, the neighbors' testimony, standing alone, in the face of expert proof from the plaintiff (if there was any) would insufficient to win the case for the local government. And since the planners from the local government itself seem to agree with the plaintiff’s position, that makes the plaintiff’s case even stronger.
The Court of Appeals relied on the neighbor’s testimony at the public hearing as providing a rational basis. It’s not clear to me that that is entirely appropriate. I think that if the plaintiff presented an expert who concluded that the zoning change was appropriate and had a rational basis, and furthermore that the existing zoning which was residential, had no rational basis, then the local legislative body should have been required to change the zoning.
Bear in mind, it’s very possible to have two or more zoning classifications which meet the rational basis test. For example, in this case, perhaps this property, from an urban zoning standpoint, could reasonably be used for residential or commercial purpose. If that’s the case then the local legislative body has the choice of either one. But without knowing more, it is difficult to reach a final conclusion concerning this issue as it regards this particular set of facts. However, the rational basis with regard to a zoning change cannot simply be provided by a neighbor. Either, the plaintiff fails to present expert proof, in which case the presumption of validity controls and the local government wins. Or, alternatively, if the plaintiff presents expert proof tending to show that there is no rational basis for the current zoning and that commercial zoning would have a rational basis, then either the local government must present its own expert and the court makes a decision between the two experts, or if the local government presents no expert proof, then the plaintiff should prevail.
However, our courts here in Tennessee have been very reluctant to even go that far and this decision in Cunningham is certainly consistent with other decisions where expert proof has been presented by the plaintiff, none from the local government, and yet somehow the local government nonetheless prevails. See for example, Family Golf v Metro Nashville, 964 S.W. 2d 264 (Tenn. App. 1997) (perm. app. denied April 6, 1998).
The point here is to recognize the difficulty of challenging a zoning change. Very few of those challenges are successful.
One final note: The Court of Appeals analyzed the denial of the zoning request as one section of its analysis, and then in another section analyzed the claims associated with substantive due process. From my perspective, those two sections could easily be combined. The basic challenge to a zoning change is really pursuant to substantive due process. The “fairly debatable rational basis test” arises out of substantive due process. In fact, the “fairly debatable” rule was applied in the first US Supreme Court case, Euclid v Ambler Realty, 272 US 365 (1926) (“If the validity of the legislative classification for zoning purposes be fairly debatable, the legislative judgment must be allowed to control.”). Over the years, the analysis has perhaps become more sophisticated with differing standards for fundamental rights and suspect classifications, but the basic test was laid down in Euclid almost 100 years ago.
When the act of a local governmental body is legislative, judicial review is limited to whether any rational basis exists for the legislative action and, if the issue is fairly debatable, it must be permitted to stand as valid legislation.
McCallen v City of Memphis, 786 SW 2d 633, 640 (Tenn. 1990).
The applicant argued that the opposition of nearby residents did not provide a basis on which the commission could lawfully refuse to rezone his property. Frankly, I agree with this point. It is not for the nearby residents to show a basis for a decision. From my perspective it takes the testimony of an expert witness, usually a land planner, to discuss whether a particular zoning classification on a particular property is rationally related to a legitimate governmental objective. Certainly, the residence may, at a public hearing, expressed their opinions. But those opinions are not well-informed and although they may have a political impact, have little or no impact on a judge making a final decision about the sustainability of the decision of the local legislative body.
Unfortunately, the cases relied upon by the applicant here were not legislative cases but rather administrative cases with a different standard of proof. The court easily blew through those, basically finding that neither of those cases was apposite to the facts presented here.
Interestingly, from my perspective, the Court of Appeals, sites an old favorite case of mine, Day v City of Decherd, 1998 WL 684533 (Tenn. App. 1990). In that case, Judge Cantrell, speaking for the Court of Appeals, noted that “legislative classifications in a zoning law are valid of any possible reason can be conceived to justify them.” And in an interesting comment on our political system:
Legislators, however, do what legislators two: they listen to their constituents; they test the wind; they try to please as many people as possible, consistent with the Constitution and a good conscience. And they are not to be condemned for doing so. That is their job.
Indeed, the Day case is somewhat similar. The owner there asked for a zoning change from residential to commercial as well, and ultimately did not have the votes to have it pass. There is one distinctive difference however, in the Day case, an urban planner, advise the planning commission that he had reservations about zoning this particular property commercial given other plans for that area of the city. As a result, there was an expert witness, so to speak, who provided some slim but necessary insight into the land use planning process and a reason to deny the zoning request.
In the Cunningham case on the other hand, the opposite appears to be true. Lisa Keylon, an urban planner by training and education, testified that this land was prime for commercial use. She testified that she thought the property should be rezoned to commercial. Now of course, in the absence of testimony by the plaintiff, a court must assume that most zoning enactments are valid. However, I feel certain that the plaintiff in this case adduced some proof, from an urban planner or otherwise, about the invalidity of the ordinance. At that point it seems to me that the burden should shift to the local legislative body to produce its own proof. Further, it appears that the County planners themselves testified the other way, that is, that the zoning change should be granted. Again, the Court of Appeals decision does not comment about this important testimony. The court focused solely on the adjacent neighbor and his opposition. But from my perspective, the neighbors' testimony, standing alone, in the face of expert proof from the plaintiff (if there was any) would insufficient to win the case for the local government. And since the planners from the local government itself seem to agree with the plaintiff’s position, that makes the plaintiff’s case even stronger.
The Court of Appeals relied on the neighbor’s testimony at the public hearing as providing a rational basis. It’s not clear to me that that is entirely appropriate. I think that if the plaintiff presented an expert who concluded that the zoning change was appropriate and had a rational basis, and furthermore that the existing zoning which was residential, had no rational basis, then the local legislative body should have been required to change the zoning.
Bear in mind, it’s very possible to have two or more zoning classifications which meet the rational basis test. For example, in this case, perhaps this property, from an urban zoning standpoint, could reasonably be used for residential or commercial purpose. If that’s the case then the local legislative body has the choice of either one. But without knowing more, it is difficult to reach a final conclusion concerning this issue as it regards this particular set of facts. However, the rational basis with regard to a zoning change cannot simply be provided by a neighbor. Either, the plaintiff fails to present expert proof, in which case the presumption of validity controls and the local government wins. Or, alternatively, if the plaintiff presents expert proof tending to show that there is no rational basis for the current zoning and that commercial zoning would have a rational basis, then either the local government must present its own expert and the court makes a decision between the two experts, or if the local government presents no expert proof, then the plaintiff should prevail.
However, our courts here in Tennessee have been very reluctant to even go that far and this decision in Cunningham is certainly consistent with other decisions where expert proof has been presented by the plaintiff, none from the local government, and yet somehow the local government nonetheless prevails. See for example, Family Golf v Metro Nashville, 964 S.W. 2d 264 (Tenn. App. 1997) (perm. app. denied April 6, 1998).
The point here is to recognize the difficulty of challenging a zoning change. Very few of those challenges are successful.
One final note: The Court of Appeals analyzed the denial of the zoning request as one section of its analysis, and then in another section analyzed the claims associated with substantive due process. From my perspective, those two sections could easily be combined. The basic challenge to a zoning change is really pursuant to substantive due process. The “fairly debatable rational basis test” arises out of substantive due process. In fact, the “fairly debatable” rule was applied in the first US Supreme Court case, Euclid v Ambler Realty, 272 US 365 (1926) (“If the validity of the legislative classification for zoning purposes be fairly debatable, the legislative judgment must be allowed to control.”). Over the years, the analysis has perhaps become more sophisticated with differing standards for fundamental rights and suspect classifications, but the basic test was laid down in Euclid almost 100 years ago.
Wednesday, October 31, 2018
Cunningham v Bedford County -- Intro
This case, decided at the end of October, is an illustration of the difficulties involved in defeating the local government regarding any kind of a zoning change. Whether the local government has granted the zoning change and the neighbors challenge the change, or deny the change and the applicant challenges the decision, it is very difficult for the losing party to successfully challenge the decision of the local government. It is once again one of those instances where fighting city hall is difficult to do.
Over the next couple of days, I will discuss this case. Today I will simply look at the factual background and procedural history as recited by the Tennessee Court of Appeals. You can find a copy of the case here.
The property involved in this case was zoned residential and the owner tried unsuccessfully several times to have the property rezoned for commercial use. This case arises out of his efforts to obtain a zoning change to commercial use filed in May 2013.
The court indicates that the Planning Commission recommended the zoning change from residential to commercial. However, at the next meeting of the local legislative body, while there was a motion and second to approve the rezoning, it failed to pass.
Nevertheless, the application was placed on the agenda for a subsequent meeting of the local legislative body and a public hearing was held as part of that meeting. The applicant and his attorney spoke in favor of the application and a resident of a local subdivision, located adjacent to the property, spoke against it. For one reason or another, there was a motion made to defer consideration of the zoning change and remand to the Planning Commission.
It’s unclear whether the case ever went back to the Planning Commission. The opinion does not indicate any further action by the Planning Commission. However, at the next meeting of the local legislative body, the application was again considered, and a motion was made to approve and seconded, but the motion failed. Neither Mr. Cunningham nor his attorney was given the opportunity to speak prior to the vote.
The failure to approve the requested zoning change was challenged by filing a declaratory judgment action in Chancery Court. Notice that in challenging a zoning change, the appropriate manner of doing so is by way of a declaratory judgment. In many other instances, on an appeal from the planning commission, on appeal from the board of zoning appeals, and on appeal from certain kinds of special zoning techniques from the local legislative body, the proper method is to file a petition for writ of certiorari. But where the local legislative body considers a straight zoning change, say from residential to commercial as in this case, the appropriate manner of challenging the decision is by way of declaratory judgment.
The plaintiff alleged that the denial of the zoning change was arbitrary, capricious and illegal and that there was no rational or justifiable basis for the decision of the local legislative body. The complaint also alleged violations of the applicant’s due process and equal protection rights and that the failure to grant a zoning change rendered the county liable for inverse condemnation/regulatory taking of the property.
There were four days of hearings before the trial court although the Court of Appeals does not indicate much by way of what testimony was adduced. The trial court ultimately found that:
– the decision of the local legislative body was arbitrary and capricious,
– the plaintiffs due process rights were violated,
– there was no regulatory taking,
– no violation of the sunshine law and
– the members of the local legislative body were acting within the scope of their authority in carrying out their duties.
The court ordered that the property be rezoned from residential to commercial, and awarded damages in the amount of $75,600 plus interest and attorneys fees in the amount of $10,000.
The plaintiff appealed seeking lost profits other damages and also asking that the trial court decision finding no regulatory taking be reversed. The defendants for their part, raised an additional issue as to whether or not the decision to deny the zoning change was arbitrary and capricious and violation of the plaintiff’s due process rights.
This case gives us an excellent opportunity to discuss not only the perils and pitfalls of challenging a local governmental decision concerning zoning changes, but also the various theories which might be used by a plaintiff to challenge such a decision. Since the Court of Appeals ultimately concludes that the trial court was incorrect in finding any violation of the law whatsoever, it also demonstrates how difficult it is to prevail under the circumstances.
We will take a look at the basic issues concerning zoning changes next time, discuss regulatory takings at a future date and then finally look at the procedural and substantive due process issues after that.
Over the next couple of days, I will discuss this case. Today I will simply look at the factual background and procedural history as recited by the Tennessee Court of Appeals. You can find a copy of the case here.
The property involved in this case was zoned residential and the owner tried unsuccessfully several times to have the property rezoned for commercial use. This case arises out of his efforts to obtain a zoning change to commercial use filed in May 2013.
The court indicates that the Planning Commission recommended the zoning change from residential to commercial. However, at the next meeting of the local legislative body, while there was a motion and second to approve the rezoning, it failed to pass.
Nevertheless, the application was placed on the agenda for a subsequent meeting of the local legislative body and a public hearing was held as part of that meeting. The applicant and his attorney spoke in favor of the application and a resident of a local subdivision, located adjacent to the property, spoke against it. For one reason or another, there was a motion made to defer consideration of the zoning change and remand to the Planning Commission.
It’s unclear whether the case ever went back to the Planning Commission. The opinion does not indicate any further action by the Planning Commission. However, at the next meeting of the local legislative body, the application was again considered, and a motion was made to approve and seconded, but the motion failed. Neither Mr. Cunningham nor his attorney was given the opportunity to speak prior to the vote.
The failure to approve the requested zoning change was challenged by filing a declaratory judgment action in Chancery Court. Notice that in challenging a zoning change, the appropriate manner of doing so is by way of a declaratory judgment. In many other instances, on an appeal from the planning commission, on appeal from the board of zoning appeals, and on appeal from certain kinds of special zoning techniques from the local legislative body, the proper method is to file a petition for writ of certiorari. But where the local legislative body considers a straight zoning change, say from residential to commercial as in this case, the appropriate manner of challenging the decision is by way of declaratory judgment.
The plaintiff alleged that the denial of the zoning change was arbitrary, capricious and illegal and that there was no rational or justifiable basis for the decision of the local legislative body. The complaint also alleged violations of the applicant’s due process and equal protection rights and that the failure to grant a zoning change rendered the county liable for inverse condemnation/regulatory taking of the property.
There were four days of hearings before the trial court although the Court of Appeals does not indicate much by way of what testimony was adduced. The trial court ultimately found that:
– the decision of the local legislative body was arbitrary and capricious,
– the plaintiffs due process rights were violated,
– there was no regulatory taking,
– no violation of the sunshine law and
– the members of the local legislative body were acting within the scope of their authority in carrying out their duties.
The court ordered that the property be rezoned from residential to commercial, and awarded damages in the amount of $75,600 plus interest and attorneys fees in the amount of $10,000.
The plaintiff appealed seeking lost profits other damages and also asking that the trial court decision finding no regulatory taking be reversed. The defendants for their part, raised an additional issue as to whether or not the decision to deny the zoning change was arbitrary and capricious and violation of the plaintiff’s due process rights.
This case gives us an excellent opportunity to discuss not only the perils and pitfalls of challenging a local governmental decision concerning zoning changes, but also the various theories which might be used by a plaintiff to challenge such a decision. Since the Court of Appeals ultimately concludes that the trial court was incorrect in finding any violation of the law whatsoever, it also demonstrates how difficult it is to prevail under the circumstances.
We will take a look at the basic issues concerning zoning changes next time, discuss regulatory takings at a future date and then finally look at the procedural and substantive due process issues after that.
Friday, March 30, 2018
Takings cases created by non-enforcement of regulations
Assume for a moment that your neighbor is illegally using his property for some type of commercial activity. Let’s assume it’s a barbershop. Can you sue the local government for the diminution in the value of your property as a result of its failure to enforce the local zoning regulations? We looked at a case that is very similar to this a short while back. In Beech v City of Franklin, the Sixth Circuit Court of Appeals dismissed the claim against the city, although in that case, the plaintiff only alleged failure to enforce the zoning regulations and asked for mandamus to force the city to enforce the code provisions. The Sixth Circuit emphasized that there was no takings claim made against the city in the original lawsuit which was filed in Chancery Court in Williamson County. As a result, under both state and federal takings law, the case was not ripe for review.
But let’s suppose that such a claim had been made in the Chancery Court. Would the plaintiffs have prevailed? It would certainly seem very difficult from my perspective.
However, there is a very interesting recent article about “Non-Enforcement Takings,” which makes the point that although these types of cases are difficult, to be consistent, non-enforcement takings cases should be reviewed carefully and under the right circumstances may form a justifiable basis for relief. The neighbor complaining about the barbershop is a good example: certainly, having a barbershop next door to your residential property may cause a significant decrease in the value of the land, may increase noise, traffic, and cause other harm to the property owner. It is difficult however usually to get the courts to seriously review such claims.
The article is by Tim Mulvaney, Non-Enforcement Takings (February 20, 2018). Boston College Law Review, Vol. 59, No. 145, 2018, and is available at SSRN.
Of course, the property owner can sue the neighboring property owner for nuisance, including a request for damages and injunctive relief. Perhaps in the case of a failure to enforce the zoning regulations by the local government, there is the possibility of an additional takings claim? Obviously, one of the counter arguments is the extent to which such failure to enforce takings cases might subject the local government to an onslaught of damage claims.
The article is quite interesting and certainly the argument is worth considering seriously.
But let’s suppose that such a claim had been made in the Chancery Court. Would the plaintiffs have prevailed? It would certainly seem very difficult from my perspective.
However, there is a very interesting recent article about “Non-Enforcement Takings,” which makes the point that although these types of cases are difficult, to be consistent, non-enforcement takings cases should be reviewed carefully and under the right circumstances may form a justifiable basis for relief. The neighbor complaining about the barbershop is a good example: certainly, having a barbershop next door to your residential property may cause a significant decrease in the value of the land, may increase noise, traffic, and cause other harm to the property owner. It is difficult however usually to get the courts to seriously review such claims.
The article is by Tim Mulvaney, Non-Enforcement Takings (February 20, 2018). Boston College Law Review, Vol. 59, No. 145, 2018, and is available at SSRN.
Of course, the property owner can sue the neighboring property owner for nuisance, including a request for damages and injunctive relief. Perhaps in the case of a failure to enforce the zoning regulations by the local government, there is the possibility of an additional takings claim? Obviously, one of the counter arguments is the extent to which such failure to enforce takings cases might subject the local government to an onslaught of damage claims.
The article is quite interesting and certainly the argument is worth considering seriously.
Wednesday, March 14, 2018
Howell v Farris, Tenn App 2018
This very interesting case involves an appeal from a decision of the local legislative body in Bolivar denying building permits to the property owner. The denial of the building permits was based on the failure of the owner to get a contractors license as required by Tennessee law. The suit requested the issuance of a statutory or common law writ of certiorari, and liquidated damages based allegedly on the delay caused by the city by refusing to issue to permits. At a later time, the complaint was amended to include a request for inverse condemnation by regulatory taking.
The Court of Appeals initially considered whether the appropriate mechanism for appeal was the common law or statutory writ of certiorari. Based on innumerable cases here in Tennessee, the court easily concluded that since the local legislative body was acting as a board of zoning appeals at the time that it upheld the denial of the building permits, that the proper means of challenging that decision was pursuant to the common law writ of certiorari. Remember that the statutory writ of certiorari allows the trial court to conduct an entirely new hearing, including the admission of new evidence is the parties so desire whereas the common law writ only allows the trial court to review the record of the proceedings below to determine if the administrative body acted arbitrarily or capriciously.
The Court of Appeals, citing Judge Ben Cantrell's well-known and definitive article (Review of Administrative Decisions by Writ of Certiorari in Tennessee, 4 Memphis State University Law Review 19, 28 (1973)), held that the statutory writ was only available when (1) the order of the administrative body has no specific provision for judicial review; (2) the function performed by the lower tribunal is essentially judicial in nature; and (3) the order for which review is sought finally determines the rights of the petitioner.
The difficulty with this framework is the use of the term "judicial." Who's to say that a board of zoning appeals acts any less "judicially" then the historic zoning commission?
Judge Cantrell offers some insight into that question. "Apparently the court will sanction the granting of review by the statutory writ with its trial de novo only where the administrative tribunal is acting as to the petitioner much like a court would; namely, the individual petitioner has something like a private property right (e.g., a license, a permit, an office) which by its order, the administrative body may take away." Once again, think of it in the context of a zoning board: most of the time, the zoning board is determining whether or not to grant some specific type of relief to an applicant, a variance, or a special right to use property such as by a special exception or conditional use permit. If the board denies the application for the variance or conditional use permit, the applicant has not lost any species of right – the applicant never had the right to use his/her property for that purpose in the first place. Thus, arguably, nothing has been lost.
In this case, the question was whether or not the applicant had satisfied the requirements for the building permit and the legislative body/board of zoning appeals determined that he had not because of his failure to comply with the Contractors Licensing Act.
The second issue was whether or not the case became moot when during the pendency of the litigation, the property owner finally was able to obtain the building permits. At stake worthy numerous other claims that the plaintiff had attempted to put before the court arising out of the denial of the permits. The Court of Appeals affirmed the decision of the trial court finding the whole matter moot by issuance of the permits. But it went further: "it has been consistently held that the common law writ of certiorari, which is appellate in nature, is incompatible with an original action, and the two cannot be brought together." In other words, all of the other claims, request for injunction, removal action, the takings case, were all inappropriately joined with the common law writ of certiorari and should have been dismissed by way of a motion to dismiss early on in the litigation. I will come back to this point just a second.
Finally, the court addressed specifically the regulatory taking claim. While the trial court concluded that the taking claim had to be dismissed, it was based on the fact that the Tennessee Criminal Court of Appeals had ruled that withholding the building permits because of a lack of compliance with the Contractors Licensing Act was appropriate, the Court of Appeals concluded that it should have been dismissed because it was not proper to join the regulatory taking case with a petition for the common law writ of certiorari.
Citing among others, Goodwin v Metro Board of Health, 656 S.W. 2d 383, 387 (Tenn. App. 1983), the Tennessee Court of Appeals held that since the plaintiff had requested the issuance of a common law writ of certiorari, a form of appellate review, his claims invoking the original jurisdiction of the Chancery Court, including his regulatory taking claim, could not be joined in the same proceeding. Therefore, the regulatory taking claim had to be dismissed.
Let me make two quick observations concerning the ability to join original action with a common law writ of certiorari. The Goodwin case and its progeny have been around as long as I practice law. It has never made any sense to me. What is there about joining an original cause of action such as a regulatory takings case with a common law writ of certiorari which disqualifies the Chancery Court from hearing them both? Are we saying that the Chancellor's are not equipped to handle a multiplicity of actions? That doesn't make much sense. Certainly both our chancery court and circuit court judges are entirely capable of handling a case which is in Foreman appellant action, and a case which is informed and original action, in the same matter. Is there some difficulty, hearing can be held separately to make disposition easier. But that doesn't seem to be any reason why the Chancellor or Circuit Court judge or these issues all at once in the same proceeding.
However, since the Goodwin doctrine has been around for at least 35 years now, a far safer alternative for counsel is to simply file two cases. First, file the administrative review via the common law writ of certiorari, and then file a second case seeking whatever other types of original relief the client might be entitled to. Take this case for example. If the common law writ of certiorari had been filed first, and then immediately after that, another suit for regulatory taking, injunctive relief damages, on whatever other theories might be available, the Goodwin doctrine would be avoided and the client would be entitled to pursue whatever relief might be available.
The attorney for the petitioner (plaintiff) must remember that the petition for certiorari must be filed within 60 days after the entry of the decision by the Board of Zoning Appeals. That's why it is important to go ahead and file the petition for certiorari first, because ordinarily the statute is for the other types of tortious misconduct is longer.
Finally, it is worth noting apps, if the court dismisses claims properly certiorari case he may be some relief pursuant to the saving statute here in Tennessee. I don't know of any case law on that issue, but if there's nothing else available, that would probably be worth arguing to see what our appellate courts would conclude as to that issue.
The Court of Appeals initially considered whether the appropriate mechanism for appeal was the common law or statutory writ of certiorari. Based on innumerable cases here in Tennessee, the court easily concluded that since the local legislative body was acting as a board of zoning appeals at the time that it upheld the denial of the building permits, that the proper means of challenging that decision was pursuant to the common law writ of certiorari. Remember that the statutory writ of certiorari allows the trial court to conduct an entirely new hearing, including the admission of new evidence is the parties so desire whereas the common law writ only allows the trial court to review the record of the proceedings below to determine if the administrative body acted arbitrarily or capriciously.
The Court of Appeals, citing Judge Ben Cantrell's well-known and definitive article (Review of Administrative Decisions by Writ of Certiorari in Tennessee, 4 Memphis State University Law Review 19, 28 (1973)), held that the statutory writ was only available when (1) the order of the administrative body has no specific provision for judicial review; (2) the function performed by the lower tribunal is essentially judicial in nature; and (3) the order for which review is sought finally determines the rights of the petitioner.
The difficulty with this framework is the use of the term "judicial." Who's to say that a board of zoning appeals acts any less "judicially" then the historic zoning commission?
Judge Cantrell offers some insight into that question. "Apparently the court will sanction the granting of review by the statutory writ with its trial de novo only where the administrative tribunal is acting as to the petitioner much like a court would; namely, the individual petitioner has something like a private property right (e.g., a license, a permit, an office) which by its order, the administrative body may take away." Once again, think of it in the context of a zoning board: most of the time, the zoning board is determining whether or not to grant some specific type of relief to an applicant, a variance, or a special right to use property such as by a special exception or conditional use permit. If the board denies the application for the variance or conditional use permit, the applicant has not lost any species of right – the applicant never had the right to use his/her property for that purpose in the first place. Thus, arguably, nothing has been lost.
In this case, the question was whether or not the applicant had satisfied the requirements for the building permit and the legislative body/board of zoning appeals determined that he had not because of his failure to comply with the Contractors Licensing Act.
The second issue was whether or not the case became moot when during the pendency of the litigation, the property owner finally was able to obtain the building permits. At stake worthy numerous other claims that the plaintiff had attempted to put before the court arising out of the denial of the permits. The Court of Appeals affirmed the decision of the trial court finding the whole matter moot by issuance of the permits. But it went further: "it has been consistently held that the common law writ of certiorari, which is appellate in nature, is incompatible with an original action, and the two cannot be brought together." In other words, all of the other claims, request for injunction, removal action, the takings case, were all inappropriately joined with the common law writ of certiorari and should have been dismissed by way of a motion to dismiss early on in the litigation. I will come back to this point just a second.
Finally, the court addressed specifically the regulatory taking claim. While the trial court concluded that the taking claim had to be dismissed, it was based on the fact that the Tennessee Criminal Court of Appeals had ruled that withholding the building permits because of a lack of compliance with the Contractors Licensing Act was appropriate, the Court of Appeals concluded that it should have been dismissed because it was not proper to join the regulatory taking case with a petition for the common law writ of certiorari.
Citing among others, Goodwin v Metro Board of Health, 656 S.W. 2d 383, 387 (Tenn. App. 1983), the Tennessee Court of Appeals held that since the plaintiff had requested the issuance of a common law writ of certiorari, a form of appellate review, his claims invoking the original jurisdiction of the Chancery Court, including his regulatory taking claim, could not be joined in the same proceeding. Therefore, the regulatory taking claim had to be dismissed.
Let me make two quick observations concerning the ability to join original action with a common law writ of certiorari. The Goodwin case and its progeny have been around as long as I practice law. It has never made any sense to me. What is there about joining an original cause of action such as a regulatory takings case with a common law writ of certiorari which disqualifies the Chancery Court from hearing them both? Are we saying that the Chancellor's are not equipped to handle a multiplicity of actions? That doesn't make much sense. Certainly both our chancery court and circuit court judges are entirely capable of handling a case which is in Foreman appellant action, and a case which is informed and original action, in the same matter. Is there some difficulty, hearing can be held separately to make disposition easier. But that doesn't seem to be any reason why the Chancellor or Circuit Court judge or these issues all at once in the same proceeding.
However, since the Goodwin doctrine has been around for at least 35 years now, a far safer alternative for counsel is to simply file two cases. First, file the administrative review via the common law writ of certiorari, and then file a second case seeking whatever other types of original relief the client might be entitled to. Take this case for example. If the common law writ of certiorari had been filed first, and then immediately after that, another suit for regulatory taking, injunctive relief damages, on whatever other theories might be available, the Goodwin doctrine would be avoided and the client would be entitled to pursue whatever relief might be available.
The attorney for the petitioner (plaintiff) must remember that the petition for certiorari must be filed within 60 days after the entry of the decision by the Board of Zoning Appeals. That's why it is important to go ahead and file the petition for certiorari first, because ordinarily the statute is for the other types of tortious misconduct is longer.
Finally, it is worth noting apps, if the court dismisses claims properly certiorari case he may be some relief pursuant to the saving statute here in Tennessee. I don't know of any case law on that issue, but if there's nothing else available, that would probably be worth arguing to see what our appellate courts would conclude as to that issue.
Saturday, August 19, 2017
Beech v City of Franklin, 2017 WL 1403201 (6th Cir. 2017)
An interesting case decided last April, the Sixth Circuit reviewed a decision by the Middle District where the neighbors of a barbershop sued because the city’s failure to close what they characterized as an illegal barbershop in their neighbors home constituted a taking of their property and violated their rights to equal protection and due process. The plaintiffs had filed originally in chancery court requesting a permanent injunction to prevent the operation of the barbershop. They also requested exemplary and punitive damages as well as attorneys fees. They also sued the city of Franklin, requesting a mandamus requiring the city to take steps to enforce the zoning ordinance. The Sixth Circuit emphasized that neither the original nor amended complaint requesting compensation for taking of private property. Ultimately the Williamson County Chancery Court entered summary judgment in favor of the city and the neighbor.
The plaintiffs then filed in federal district court alleging a taking. Citing a familiar case from the same part of the country, Williamson County Regional Planning Commission v Hamilton Bank, 473 US 172 (1985), the court noted that there are two requirements before filing a takings case in federal court: (1) the must be a final decision allowing the court to decide how much use of the property is permitted and (2) the plaintiff must seek compensation through procedures the state has provided before coming to federal court.
The Sixth Circuit noted that the Tennessee Supreme Court has held that the Tennessee Constitution requires just compensation for regulatory takings. Phillips v of Montgomery County, 442 S.W. 3d 233 (Tenn. 2014), and the Supreme Court has also recognized “nuisance-type takings” as compensable under the inverse condemnation statute. Edwards v Hall’s Dale-Powell Utility District, 115 S.W. 3d 461 (Tenn. 2003). Whether the plaintiffs characterized their taking as a regulatory taking or as a nuisance -type taking, they were required to utilize the procedures set out by the Tennessee Supreme Court and Tennessee state law. Having failed to do so, the case was ordered remanded to the district, and dismissed because it is not ripe under the Williamson County doctrine.
Taking that a little bit further, it is difficult to argue that land use activities on your adjacent neighbor’s property are so significant that it works a total take. It certainly is also difficult to lay that at the feet of the local government. A direct cause of action for nuisance against the neighbor might be more efficient, but of course in this case, the Chancery Court found no nuisance in the original action filed Williamson County.
The plaintiffs then filed in federal district court alleging a taking. Citing a familiar case from the same part of the country, Williamson County Regional Planning Commission v Hamilton Bank, 473 US 172 (1985), the court noted that there are two requirements before filing a takings case in federal court: (1) the must be a final decision allowing the court to decide how much use of the property is permitted and (2) the plaintiff must seek compensation through procedures the state has provided before coming to federal court.
The Sixth Circuit noted that the Tennessee Supreme Court has held that the Tennessee Constitution requires just compensation for regulatory takings. Phillips v of Montgomery County, 442 S.W. 3d 233 (Tenn. 2014), and the Supreme Court has also recognized “nuisance-type takings” as compensable under the inverse condemnation statute. Edwards v Hall’s Dale-Powell Utility District, 115 S.W. 3d 461 (Tenn. 2003). Whether the plaintiffs characterized their taking as a regulatory taking or as a nuisance -type taking, they were required to utilize the procedures set out by the Tennessee Supreme Court and Tennessee state law. Having failed to do so, the case was ordered remanded to the district, and dismissed because it is not ripe under the Williamson County doctrine.
Taking that a little bit further, it is difficult to argue that land use activities on your adjacent neighbor’s property are so significant that it works a total take. It certainly is also difficult to lay that at the feet of the local government. A direct cause of action for nuisance against the neighbor might be more efficient, but of course in this case, the Chancery Court found no nuisance in the original action filed Williamson County.
Monday, July 7, 2014
More on the Takings Clause
The takings clause continues to be of great interest not only practically from the point of view of land use lawyers, but academically as well. Recently, the Turo Law Review held a symposium devoted to the takings issue and the Law Review has recently published papers dealing with the topics discussed during that symposium. You can read and download copies of the academic papers here. The topics include standing issues such as those developed in the Williamson County case, the nuisance and state law exceptions to the Lucas rule, and of course the Nollan, Dolan and Koontz trilogy. I have only had an opportunity to read a couple of the articles, but the ones I have read have been quite interesting and if you have any cases in this area of the law, it certainly would be wise to take a look and see if any of the papers presented have an impact or offer greater insight into your legal cause of action.
Thursday, June 5, 2014
Taking: Is the claim ripe?
I happened to stumble across a recent decision of the Second Circuit Court of Appeals addressing the ripeness doctrine in the context of a takings under Hamilton Bank v Williamson County. The case is styled Sherman v Town of Chester, 2014 WL 1978726 (2nd Cir 2014), and involves the 10 year effort of a developer to get approval for a 400 acre development in Chester, New York. The court concluded that the town had erected roadblock after roadblock to prevent the development from being approved, and ruled that for purposes of the developer's takings claim, a final decision by the town was unnecessary.
However, the interesting part of the case is the introduction which begins with a brief discussion of “Catch-22" the famous book by Joseph Heller. It’s worth reading the first couple pages for that alone.
Friday, January 24, 2014
Koontz and Land Use Law: What's the Impact?
I attended an interesting seminar yesterday sponsored by the Tennessee Bar Association and its Environmental Section, concerning the impact of Koontz v St. Johns River Water Management District, 133 S Ct 2586 (US 2013), a case which we discussed on these pages several months ago. The seminar was extremely interesting; all of the speakers did an excellent job in their particular areas.
Of special interest was the presentation by Prof. J. B. Ruhl, Professor of Environmental and Land Use Law at Vanderbilt University, suggesting that the impact of Koontz may not be very pronounced in the environmental law area because environmental mitigation programs are already designed in a way which follows the Nollan/Dolan/Koontz paradigm. However, in the wild and woolly local land use arena, Koontz may encourage local governments and their agencies and officials to more carefully weigh the impact of mandated exactions and dedications so as to avoid an adverse constitutional determination. It is certainly true that local land use officials have not paid a great deal of attention to this area of the law in the past. I have given numerous seminars over the years, and any time I mention subdivision control, I always discuss the Supreme Court predecessors of Koontz: namely, Nollan v California Coastal Commission and Dolan v City of Tigard (I’ll be adding Koontz to my comments this year).
Notwithstanding this emphasis, I still believe that in any major planning commission across the state of Tennessee at any given public hearing, you can find examples of mandatory dedications and exactions which do not comply with the Nollan/Dolan/Koontz paradigm. For whatever reason, local officials are just not very cognizant of the constitutional issue.
I’m hopeful that Koontz will alert at least some of the more attentive and perceptive officials of the potential dangers that often remain obscured by the minutia of subdivision regulations.
Of special interest was the presentation by Prof. J. B. Ruhl, Professor of Environmental and Land Use Law at Vanderbilt University, suggesting that the impact of Koontz may not be very pronounced in the environmental law area because environmental mitigation programs are already designed in a way which follows the Nollan/Dolan/Koontz paradigm. However, in the wild and woolly local land use arena, Koontz may encourage local governments and their agencies and officials to more carefully weigh the impact of mandated exactions and dedications so as to avoid an adverse constitutional determination. It is certainly true that local land use officials have not paid a great deal of attention to this area of the law in the past. I have given numerous seminars over the years, and any time I mention subdivision control, I always discuss the Supreme Court predecessors of Koontz: namely, Nollan v California Coastal Commission and Dolan v City of Tigard (I’ll be adding Koontz to my comments this year).
Notwithstanding this emphasis, I still believe that in any major planning commission across the state of Tennessee at any given public hearing, you can find examples of mandatory dedications and exactions which do not comply with the Nollan/Dolan/Koontz paradigm. For whatever reason, local officials are just not very cognizant of the constitutional issue.
I’m hopeful that Koontz will alert at least some of the more attentive and perceptive officials of the potential dangers that often remain obscured by the minutia of subdivision regulations.
Tuesday, January 21, 2014
A Cautionary Tale . . .
Back in December of last year, the Eastern District Court of New York issued a ruling in Qing Dong v Town of North Hempstead, 2013 WL 6407724 (ED NY Dec 9, 2013) dismissing with prejudice a takings claim against the defendant. The suit arose out of a zoning regulation that prohibited the use of vacant corner lots which were more than 100 feet in width (there's no explanation as to the rationale behind the regulation). The plaintiff bought a vacant corner property and applied for a permit which was of course denied. Plaintiff appealed for a variance to the board but was denied and then appealed to the state courts (concerning the denial of the variance, not the possible taking), which affirmed the zoning board decision.
The federal lawsuit was filed alleging a taking, but the difficulty was that although the plaintiff had apparently exhausted his administrative remedies, no condemnation action had been filed in state court. The famous case which arose out of Tennessee, Williamson County v Hamilton Bank, 473 US 172 (1985), requires that any administrative remedy must be pursued, as well as state judicial condemnation remedies before filing in federal court.
The plaintiff argued that under NY state law, a pre-ownership regulation (plaintiff bought the land after the regulation had been passed presumably with knowledge of the regulation) barred a suit for a taking. The district court held that the underlying state law did not matter; in order to be ripe for federal litigation, the state action had to be filed first; without that predicate the case had to be dismissed.
Finally, the federal court dismissed the case with prejudice. The statute of limitations in state court had run: there was no use in dismissing without prejudice because the plaintiff had no right to file the condemnation proceeding in state court any longer.
It is worthwhile to apply this cautionary tale to the law here in Tennessee. First, we don’t know whether a takings claim based on overbroad zoning or other regulation is recognized here in Tennessee. As Justice Koch said, “However, this Court has not yet held that a regulatory takings claim can be asserted under Article I, Section 21 of the Tennessee Constitution. Currently, we have recognized only two types of takings claims – physical occupation takings claims and nuisance-type takings claims . . . Regulatory takings do not fall into either of these categories.” B & B Enterprises v Wilson County, 318 S.W. 3d 839 (Tenn. 2010). It is however worth noting that in 2013, the Tennessee Court of Appeals quoted B & B:
The Court of Appeals then reversed the trial court decision dismissing the case of a city imposed moratorium on development. Presumably, our Tennessee courts would ultimately find that an overbroad regulation may amount to a taking under the proper circumstances.
Assuming that to be true, the question we are interested in here is how to preserve the right to sue in federal court if a local government has enacted an overbroad regulation. As noted above, the US Supreme Court decision in Williamson County requires that the plaintiff must exhaust their administrative remedies, and in addition must also exhaust any judicial remedies in state court before moving on to federal litigation.
Let’s take a sample case. Suppose a local government refuses to allow a property owner who owns a property which is somewhat smaller than the minimum required lot size in the applicable zoning district. Suppose for example the local government requires a 1 acre residential lot size, but the property owner has only three quarters of an acre. However, the lot was created in 1975, and the zoning regulations adopting the 1 acre minimum lot size were passed in 1980. Therefore, the creation of the lot predates the zoning regulations. Ordinarily, most zoning regulations have provisions for this type of difficulty and usually allow the use of such smaller lots when they were created prior to the adoption of the zoning regulations.
In our case however the city or County refuses to allow the use of the property for anything. The local government refuses to issue a permit. What’s to be done?
First, obviously, under the doctrine of Williamson County, the applicant must file an appeal to the zoning board requesting a variance or any other kind of relief which might be available to him. Ordinarily, the board will deny this application. A substandard lot size is ordinarily not a grounds for a variance here in Tennessee. You must have some exceptional physical feature of the property (not the size of the lot itself) to justify a variance.
What’s next? Certainly the property owner could appeal the decision of the zoning board by way of a common law writ of certiorari, but that is almost certainly doomed to failure. Again, if the variance was properly denied by the zoning board, and in most of these kinds of cases that certainly would be the case because the size of the lot itself is not an exceptional physical feature, the writ of certiorari is not likely to be helpful. Furthermore, unlike the case from New York we have been discussing above, under the Tennessee common law writ of certiorari, an original action may not be joined with the petition for writ of certiorari itself. Since a claim for damages because of a takings is an original action, it cannot be joined with the petition for writ of certiorari.
Therefore, once the board of zoning appeals has denied the application for a variance, and independent lawsuit (not an appeal from the zoning board) should be brought alleging damages. It is important to recognize that this lawsuit must be filed within one year after the date on which the owner is put on notice of the alleged taking. This is the ultimate holding in the Supreme Court decision involving B & B Enterprises. In that case, a subdivision application was denied and it took several years to appeal the decision and ultimately reverse it. After the decision was reversed, the property owner attempted to sue for a temporary taking. However, the Supreme Court found that since the lawsuit for the taking was filed well over a year after the denial by the planning commission of the subdivision application, the one-year statute of limitations had been exceeded.
B & B Enterprises of course argued that the takings claim was not complete or ripe until after the decision of the Tennessee Court of Appeals reversing the decision of the planning commission was entered. The Supreme Court disagreed.
Thus, the result in B & B Enterprises is somewhat similar to the decision in Qing Dong from New York. In both cases, the developer’s claim for damages was ultimately frustrated by failing to properly pursue a takings claim in state court within the proper time frame. Although I think the New York case could have been easily predicted and prevented, the same probably cannot be true about B & B Enterprises. The Tennessee Supreme Court’s application of the one-year statute of limitations is likely different from the way most land use practitioners might have expected. It is important to understand this difference, and to recognize that any time there might be a takings claim involved, suit must be filed within a year of that date or the risk of losing it forever is probable.
Let me make this suggestion to attorneys working in this field of endeavor. First, it is often appropriate when filing a common law writ of certiorari, to consider whether there are other claims which should be pursued but which cannot be included in the petition for common law writ. Often, there are claims that might be most appropriate in a declaratory judgment action but which arguably may not be appropriate within the common law writ of certiorari. In the takings context, an action for damages may also be appropriate.
For that reason, whenever filing a petition for common law writ of certiorari, it is certainly appropriate to consider whether a companion case seeking damages and/or declaratory and injunctive relief might be appropriate. Certainly, other than the additional filing fees, if there is reasonable concern about the necessity of filing a separate action, it is well worth filing to avoid this difficulty. Certainly, several times in my career, having filed the companion declaratory judgment action has saved me from an embarrassing dismissal of the certiorari case. It is always worth at least consideration.
Finally, if for some reason a separate companion case is not advisable, it might also be worthwhile to include allegations of a takings claim and or declaratory judgment in the petition for writ of certiorari itself. The local government may move to dismiss those claims as being beyond the scope of a certiorari lawsuit, but presumably the claims would be dismissed without prejudice, and given the Tennessee savings statute, those claims could be reinserted within a year. To be on the safe side, I suggest filing separate actions is most appropriate however.
It is certainly easy to miss the statute on these kinds of takings claims. The attorney must be alert to the various possibilities and make sure to file within a year after the local governmental action.
It is worthwhile to apply this cautionary tale to the law here in Tennessee. First, we don’t know whether a takings claim based on overbroad zoning or other regulation is recognized here in Tennessee. As Justice Koch said, “However, this Court has not yet held that a regulatory takings claim can be asserted under Article I, Section 21 of the Tennessee Constitution. Currently, we have recognized only two types of takings claims – physical occupation takings claims and nuisance-type takings claims . . . Regulatory takings do not fall into either of these categories.” B & B Enterprises v Wilson County, 318 S.W. 3d 839 (Tenn. 2010). It is however worth noting that in 2013, the Tennessee Court of Appeals quoted B & B:
A regulatory taking results when a governmental regulation places such a burdensome restriction on a landowner's use of its property that the government has for all intents and purposes “taken” the property. In 1922, a near unanimous United States Supreme Court noted that a regulation that goes “too far” is a taking of property, presumably as much as a physical taking or invasion of property is a taking.Durrett Inv. Co., LP v. City of Clarksville, M2012-00807-COA-R3CV, 2013 WL 614411 (Tenn. Ct. App. Feb. 15, 2013).
The Court of Appeals then reversed the trial court decision dismissing the case of a city imposed moratorium on development. Presumably, our Tennessee courts would ultimately find that an overbroad regulation may amount to a taking under the proper circumstances.
Assuming that to be true, the question we are interested in here is how to preserve the right to sue in federal court if a local government has enacted an overbroad regulation. As noted above, the US Supreme Court decision in Williamson County requires that the plaintiff must exhaust their administrative remedies, and in addition must also exhaust any judicial remedies in state court before moving on to federal litigation.
Let’s take a sample case. Suppose a local government refuses to allow a property owner who owns a property which is somewhat smaller than the minimum required lot size in the applicable zoning district. Suppose for example the local government requires a 1 acre residential lot size, but the property owner has only three quarters of an acre. However, the lot was created in 1975, and the zoning regulations adopting the 1 acre minimum lot size were passed in 1980. Therefore, the creation of the lot predates the zoning regulations. Ordinarily, most zoning regulations have provisions for this type of difficulty and usually allow the use of such smaller lots when they were created prior to the adoption of the zoning regulations.
In our case however the city or County refuses to allow the use of the property for anything. The local government refuses to issue a permit. What’s to be done?
First, obviously, under the doctrine of Williamson County, the applicant must file an appeal to the zoning board requesting a variance or any other kind of relief which might be available to him. Ordinarily, the board will deny this application. A substandard lot size is ordinarily not a grounds for a variance here in Tennessee. You must have some exceptional physical feature of the property (not the size of the lot itself) to justify a variance.
What’s next? Certainly the property owner could appeal the decision of the zoning board by way of a common law writ of certiorari, but that is almost certainly doomed to failure. Again, if the variance was properly denied by the zoning board, and in most of these kinds of cases that certainly would be the case because the size of the lot itself is not an exceptional physical feature, the writ of certiorari is not likely to be helpful. Furthermore, unlike the case from New York we have been discussing above, under the Tennessee common law writ of certiorari, an original action may not be joined with the petition for writ of certiorari itself. Since a claim for damages because of a takings is an original action, it cannot be joined with the petition for writ of certiorari.
Therefore, once the board of zoning appeals has denied the application for a variance, and independent lawsuit (not an appeal from the zoning board) should be brought alleging damages. It is important to recognize that this lawsuit must be filed within one year after the date on which the owner is put on notice of the alleged taking. This is the ultimate holding in the Supreme Court decision involving B & B Enterprises. In that case, a subdivision application was denied and it took several years to appeal the decision and ultimately reverse it. After the decision was reversed, the property owner attempted to sue for a temporary taking. However, the Supreme Court found that since the lawsuit for the taking was filed well over a year after the denial by the planning commission of the subdivision application, the one-year statute of limitations had been exceeded.
B & B Enterprises of course argued that the takings claim was not complete or ripe until after the decision of the Tennessee Court of Appeals reversing the decision of the planning commission was entered. The Supreme Court disagreed.
The Planning Commission's action on February 26, 2002, put B & B Enterprises on notice that its reasonable investment-backed expectations for the use of its property had been frustrated. Regardless of the eventual outcome of the judicial proceedings, the Planning Commission began interfering with B & B Enterprises's economically beneficial use of its property by no later than February 26, 2002. While the duration of the judicial proceedings might later be relevant to determining the length of time that B & B Enterprises was denied the use of its property, it is not relevant to determining when B & B Enterprises was put on notice that a taking had occurred. Therefore, we hold that Tenn.Code Ann. § 29–16–124's one-year statute of limitations on B & B Enterprises's claim began to run on February 26, 2002.B & B Enterprises of Wilson Cnty., LLC v. City of Lebanon, 318 S.W.3d 839, 847 (Tenn. 2010).
Thus, the result in B & B Enterprises is somewhat similar to the decision in Qing Dong from New York. In both cases, the developer’s claim for damages was ultimately frustrated by failing to properly pursue a takings claim in state court within the proper time frame. Although I think the New York case could have been easily predicted and prevented, the same probably cannot be true about B & B Enterprises. The Tennessee Supreme Court’s application of the one-year statute of limitations is likely different from the way most land use practitioners might have expected. It is important to understand this difference, and to recognize that any time there might be a takings claim involved, suit must be filed within a year of that date or the risk of losing it forever is probable.
Let me make this suggestion to attorneys working in this field of endeavor. First, it is often appropriate when filing a common law writ of certiorari, to consider whether there are other claims which should be pursued but which cannot be included in the petition for common law writ. Often, there are claims that might be most appropriate in a declaratory judgment action but which arguably may not be appropriate within the common law writ of certiorari. In the takings context, an action for damages may also be appropriate.
For that reason, whenever filing a petition for common law writ of certiorari, it is certainly appropriate to consider whether a companion case seeking damages and/or declaratory and injunctive relief might be appropriate. Certainly, other than the additional filing fees, if there is reasonable concern about the necessity of filing a separate action, it is well worth filing to avoid this difficulty. Certainly, several times in my career, having filed the companion declaratory judgment action has saved me from an embarrassing dismissal of the certiorari case. It is always worth at least consideration.
Finally, if for some reason a separate companion case is not advisable, it might also be worthwhile to include allegations of a takings claim and or declaratory judgment in the petition for writ of certiorari itself. The local government may move to dismiss those claims as being beyond the scope of a certiorari lawsuit, but presumably the claims would be dismissed without prejudice, and given the Tennessee savings statute, those claims could be reinserted within a year. To be on the safe side, I suggest filing separate actions is most appropriate however.
It is certainly easy to miss the statute on these kinds of takings claims. The attorney must be alert to the various possibilities and make sure to file within a year after the local governmental action.
Friday, July 12, 2013
Regulatory Takings
The Tennessee Court of Appeals has released another interesting case related to zoning, land use planning law, and regulatory takings. In Phillips v Montgomery County, the issue was whether or not the denial of subdivision approval by the county because the location of the subdivision would essentially block the extension of a state highway, was unconstitutional.
Unfortunately, the plaintiff chose to sue solely under the terms of the Tennessee state constitution but did not include a cause of action under the federal Constitution. An interesting question, related to this issue, is whether or not you need the name either constitutional provision. Perhaps it’s safer to mention both, but it seems to me that the Tennessee Rules of Civil Procedure to not require it.
In any event, in this particular case, the Tennessee Constitution was specifically referenced as a result any potential claim concerning regulatory takings under the federal Constitution were waived. In addition, since the doctrine of regulatory takings has not yet been recognized by the Tennessee Supreme Court, the Court of Appeals was reluctant to make new law by concluding that there was a Tennessee doctrine prohibiting regulatory takings. The court did specifically note its earlier decision, B & B Enterprises of Wilson County, LLC v. City of Lebanon, 318 S.W.3d 839 (Tenn. 2010), and since that case was authored by Justice Koch, it may be that this decision was the Court’s way of suggesting that this case be appealed to the Tennessee Supreme Court, where this issue could be fully addressed. Certainly, one would assume that the state courts could entertain a theory based on a regulatory taking.
However, since the plaintiff had also sued under the theory of inverse condemnation, the Tennessee Court of Appeals dismissed the other claims and remanded based on the inverse condemnation claim under Tennessee law.
Although not involved in this case, the three United States Supreme Court decisions, Nolan v California Coastal Commission, Dolan v City of Tigard, and Koontz v St. James River Management Utility, the latter of which was only decided in late June of this year, clearly establish that if an application is denied based on what amounts to an unrelated requirement of the local government, that it is not only a take, but that the burden of proof is reversed and shifts to the local government itself.
For example, in this Phillips case, the government admitted that the only reason for the denial of the preliminary plat was the proposed future extension of the state highway. Presumably, the only reason to deny the plat approval would be to prevent construction and thereby hold down the amount of money which the state or local government would have to pay in order to condemn the property for the extension. But again, this is inappropriate. The single property owner should not have to pay, by having his project delayed, for a project of this nature. This is a cost of the entire government, state or local, and should be borne by the taxpayers of government. It is simply unacceptable for a local government to deny plat approval under those circumstances.
Unfortunately, the plaintiff chose to sue solely under the terms of the Tennessee state constitution but did not include a cause of action under the federal Constitution. An interesting question, related to this issue, is whether or not you need the name either constitutional provision. Perhaps it’s safer to mention both, but it seems to me that the Tennessee Rules of Civil Procedure to not require it.
In any event, in this particular case, the Tennessee Constitution was specifically referenced as a result any potential claim concerning regulatory takings under the federal Constitution were waived. In addition, since the doctrine of regulatory takings has not yet been recognized by the Tennessee Supreme Court, the Court of Appeals was reluctant to make new law by concluding that there was a Tennessee doctrine prohibiting regulatory takings. The court did specifically note its earlier decision, B & B Enterprises of Wilson County, LLC v. City of Lebanon, 318 S.W.3d 839 (Tenn. 2010), and since that case was authored by Justice Koch, it may be that this decision was the Court’s way of suggesting that this case be appealed to the Tennessee Supreme Court, where this issue could be fully addressed. Certainly, one would assume that the state courts could entertain a theory based on a regulatory taking.
However, since the plaintiff had also sued under the theory of inverse condemnation, the Tennessee Court of Appeals dismissed the other claims and remanded based on the inverse condemnation claim under Tennessee law.
Although not involved in this case, the three United States Supreme Court decisions, Nolan v California Coastal Commission, Dolan v City of Tigard, and Koontz v St. James River Management Utility, the latter of which was only decided in late June of this year, clearly establish that if an application is denied based on what amounts to an unrelated requirement of the local government, that it is not only a take, but that the burden of proof is reversed and shifts to the local government itself.
For example, in this Phillips case, the government admitted that the only reason for the denial of the preliminary plat was the proposed future extension of the state highway. Presumably, the only reason to deny the plat approval would be to prevent construction and thereby hold down the amount of money which the state or local government would have to pay in order to condemn the property for the extension. But again, this is inappropriate. The single property owner should not have to pay, by having his project delayed, for a project of this nature. This is a cost of the entire government, state or local, and should be borne by the taxpayers of government. It is simply unacceptable for a local government to deny plat approval under those circumstances.
Tuesday, February 26, 2013
Moratoria: Takings or Valid Planning Devices?
The Tennessee Court of Appeals recently ruled in a “takings” or “inverse condemnation” case that a moratorium enacted by a local legislative body for a fairly short period of time (eight months) might under the facts of the case render the city liable for a taking. Durrett Investment Company v City of Clarksville, Tenn. App. February 15, 2013. The trial court had dismissed the case pursuant to a motion to dismiss filed by the city but on appeal, the Court of Appeals reversed. Noting that there is “no bright line rule or formula… for determining when a regulation goes too far such that it is recognized as a taking,” and citing Tahoe-Sierra Preservation Council v Tahoe Regional Planning Agency, 535 US 302 (2002), the court concluded that the balancing test of Penn Central should apply. The factors considered there included:
(1) the economic impact of the regulation,
(2) the degree to which the regulation has interfered with the owner’s reasonable distinct investment- backed expectations concerning the property, and
(3) the character of the governmental action.
Penn Central v City of New York, 438 US 104 (1978).
There may be other relevant factors to consider as well. That’s probably just as well, because two of the factors enumerated in Penn Central seem to have gone by the boards. For example, the first factor, the economic impact of the regulation, seems to be much less important since the court has held that land use regulations can be a taking only if the landowner is deprived of all or substantially all economically beneficial use of the land. The third factor, the character of the action, originally was thought to distinguish between physical invasions of land and overbroad regulations. However, since the Supreme Court has since ruled that a physical taking is a per se violation, the third factor also seems to be somewhat superfluous.
The complaint alleged that the city knew that the property owner wanted to develop the property, and was in fact in the process of selling the property. The complaint also alleged that the road which was under consideration would not have been constructed for over 10 years. It is also worth noting that the moratorium did not affect all of the property of the plaintiff; only a fairly narrow corridor.
Most of the cases which have considered moratoria such as Tahoe-Sierra hold in favor of the government. In fact, the Supreme Court specifically noted that moratoria were widely used for planning purposes and upheld the 32 month moratorium at issue in that case as reasonable under the circumstances.
The Supreme Court also indicated that a moratorium over one year or more in length might be viewed with special skepticism. Indeed, most cases challenging moratoria with durations of less than one year fail, most likely for the reasons advanced by Tahoe-Sierra.
Although based on the other decisions involving moratoria, the result in this case might be slightly surprising, most likely the Court of Appeals felt that the factual background of the case had not been sufficiently brought into focus for it to make a decision on the ultimate issue of overbroad regulatory takings. A remand to the trial court will give both parties an opportunity to get all the facts before the court so that a fair and final resolution can be achieved.
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