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Posts from July 2013.

In State ex rel Dept. of Transp. v. Singh, No. 110469, A1495660, 2013 WL 3215699 (Or. Ct.. App. June 26, 2013) , the State sought to close two reservations of access by eminent domain on Highway 34 to a property that was improved with a convenience market and also to close access to the County Road using its police powers.  The property owner, Mr. Singh, moved to dismiss the condemnation case for the State’s failure to comply with the Condemnation Procedures Act because its statutory offer of just compensation (1) did not include a specific description of the location and extent of the rights of post-taking access to Mr. Singh’s property, and (2) did not address all compensable damages to the property as a result of the elimination of access to the property. The trial court granted Mr. Singh’s motion for summary judgment and dismissed the State’s complaint. The State appealed.

There was no dispute that the taking eliminated all rights of access to Mr. Singh’s property, and that absent reasonable alternative post-taking access, Mr. Singh’s remaining property would be land locked. In order to mitigate the damage to the remaining property, the State attempted to grant Mr. Singh rights to access and use a new road to be constructed across the neighbors’ private properties for access to his remaining property. As the trial court correctly ruled, however, there was nothing in the State’s offer (or the Complaint) describing with any definiteness or certainty the location or right to use a proposed new access road to Mr. Singh’s property. The State merely “offered” to build a road, at some generally-described location, and at some undefined point in time, all to be determined at the State’s sole discretion. The Court of Appeals agreed with the trial court’s dismissal of the condemnation action for failure to comply with the Condemnation Procedures Act. ORS 35.346(1) required the State to “make a written offer” to the property owner (a) “to purchase the property or interest,” (b) “to pay just compensation therefore,” and (c) to “pay just compensation for any compensable damages to the remaining property.” Implicit in the concept of an offer under the statute is that the amount offered is specifically tied to the terms of the offer. Thus, the amount of damages that a condemner offers must be based on an evaluation of the compensable damages that the remaining property will suffer if the property owner accepts the terms of the proffered agreement.

Because the appraiser for the State made the assumption in its appraisal that there would be access different than what was “offered,” the dismissal was appropriate.  The Court of Appeals held there is no requirement that the complaint include a metes and bounds description of the future access that the condemnor will provide. However, when the State chooses to make an offer of compensation before the specifics of a future access are certain, the statute requires that the compensation offer include compensation for that uncertainty. The trial court correctly dismissed the condemnation complaint.

Interstate Outdoor Advertising, L.P. v. Zoning Board of the Township of Mt. Laurel, No. 11-3837 (3rd Cir., Feb. 11, 2013) involved passage of challenged amendments to the Township’s sign ordinance after plaintiff filed billboard permit applications. The amendments allowed commercial signs to include noncommercial displays and required sign regulations otherwise to be administered in a content-neutral manner. While hearings on the permits were ongoing, plaintiff filed suit challenging the entire ordinance on First Amendment grounds. The trial court granted summary judgment and dismissed the case. Plaintiff appealed.

The court analyzed the dismissal separating commercial from noncommercial speech. As to the commercial speech, there was no allegation that the billboards were misleading or advanced illegal activity, so the ordinance was tested to determine whether it served a substantial governmental interest and swept no further than necessary to advance that interest. All parties agreed that defendant has a substantial interest in aesthetics and traffic safety, so the court examined the “fit” between these legislative goals and the means chosen to advance them. The trial court had deposition testimony on summary judgment as to both issues and the Third Circuit heard challenges to the reliability of defendant’s studies and experts by way of plaintiff’s briefs and argument, in which it asserted an issue of material fact.

The Third Circuit cited Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981) in which the Supreme Court found that similar cases were governed by the “law of billboards” which could uphold a complete billboard ban if the governmental body had a sufficient basis to believe that billboards were unattractive or presented traffic safety hazards. The fact that the billboards were proposed in an unattractive industrial area was of no import and defendant’s citation of evidence to support the ordinance was not a sign of its bad faith. The Court said that even if there were a factual challenge to the traffic safety aspects of the ordinance, the Court would uphold the same because it advanced aesthetic interests of the community. There was no apparent ulterior motive to show that defendant attempted to suppress speech and local governments are not required to provide studies to advance each specific regulation but rather can rely on previous studies done by others and relating to billboards. The studies relied upon in this case to support the ordinance were not factually unreasonable, nor palpably false. As in Metromedia, the ordinance can be written to prohibit all billboards and need not be selective in that prohibition.

As to noncommercial speech, these regulations may be upheld if justified without reference to their content, serve a significant governmental interest, and leave open ample alternative channels of communication. The challenged ordinance is content-neutral and, as discussed with regard to commercial speech, serves a substantial governmental interest. Alternative channels of communication are open by way of on-premise signs, internet advertising, direct mail, radio, television, circulars and flyers, motor vehicle signs and public transport advertisements. The fact that billboards are not available or that one target audience cannot be reached completely is of no import, as maximizing profits is not a constitutional goal and does not mean that no reasonable alternative channels of communication are available. Moreover, Metromedia standards for the proposition that a complete ban on billboards is an appropriate way to deal with traffic safety and aesthetic concerns. The grant of summary judgment was thus upheld.

This case makes sense as an extension of the plurality opinion in Metromedia and likely reflects federal jurisprudence on the “law of billboards” under the First Amendment.

Koontz v. St. Johns River Water Management District, 570 US ___ (June 25, 2013) involved discussions between plaintiff applicant and defendant Water Management District which had jurisdiction over permits to dredge or fill Florida wetlands.  The District had specific authority under state law to offset environmental damages, including “creating, enlarging, or preserving wetlands elsewhere.”  In 1972 plaintiff’s father had purchased a 14.9 acre parcel that included wetlands.  Plaintiff succeeded to that parcel and proposed to develop 3.7 acres in 1994, agreeing to dedicate approximately 11 acres to the District for wetland preservation.  Defendant found this action to be inadequate and proposed alternatives including development of just one acre (which would require a dedication of 13.9 acres to the District) or development of 3.7 acres so long as plaintiff would help restore wetlands on District-owned property within the same basin several miles away or pay an equivalent amount to do so. 

Plaintiff refused to undertake or propose other alternatives; thus the permit was denied. Plaintiff sued for a taking.  The trial court found actions above and beyond the 11-acre dedication proposal violated both the nexus and rough proportionality requirements of Nollan v. California Coastal Comm. 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), respectively.  The Florida Court of Appeals affirmed but the Florida Supreme Court reversed, finding no taking as there was no condition on which to predicate a Nollan/Dolan violation and because the claim involved a demand for money which it found not subject to a takings claim under those cases.  The United States Supreme Court granted certiorari.

by Edward J. Sullivan and Carrie A. Richter

In a 5 to 4 decision last month, the United States Supreme Court ruled that a local government must make “rough proportionality” findings whether it approves or denies a development in those cases in which conditions of approval (including those involving payment of money) are discussed.  In that case, Koontz v. St. Johns River Water Management District, the Supreme Court dealt with a development permit denial because the applicant, Roy Koontz Sr., refused to either dedicate additional property or pay to improve a wetland elsewhere to offset the loss of wetlands resulting from this development.

Known as the “Nollan/Dolan limitations on unconstitutional conditions,” a local government may not condition the approval of a land use permit on the owner’s relinquishment of a portion of his property unless there is a nexus (connection) and rough proportionality between the government’s demand and the effects of the proposed land use.  Justice Alito, writing for the majority, found that these limitations apply whether the local government approves or denies the permit.  In other words, denials that state potential conditions concerning what would be necessary to gain approval must be framed as roughly proportional under the Takings Clause of the Fifth Amendment.

In addressing application of the doctrine on obligations to pay money, the majority distinguished previous holdings such as Eastern Enterprises v. Apfel, where a former mining company was required to pay for the medical benefits of retired miners, by finding the Fifth Amendment applied if there were a direct link between the government’s demand and a specific piece of real property.  According to the majority, allowing a pay-in-lieu option to a real property exaction cannot be a surrogate for avoiding rough proportionality.  How far the monetary exaction limitation reaches is difficult to say.  The majority says that it “does not affect the ability of governments to impose property taxes, user fees and similar laws…that may impose financial burdens on property owners” but goes on to state that this decision does not distinguish between “taxes from takings.”  Although systems development charges may fall within the ambit of a “user fee” exception, they are the result of a particular demand on property.  Thus finding the limits of this case is likely something that only lawyers will love.

Writing for the dissent, Justice Kagan, agreed with the application of Nollan/Dolan to permit conditions, even if they are not accepted and the permit is then denied.  Kagan cautioned that applying this test to a demand to pay money “bristles with conceptual difficulties.  And practical ones too:  How to separate order to pay money from…well, orders to pay money, so that the locality knows what is can (and cannot) do.”  According to the dissent, this lack of direction “casts a cloud” on local government action.  “If every suggestion could become the subject of a lawsuit under Nollan/Dolan, the lawyer can give one recommendation: Deny the permits, without giving Koontz any advice – even if he asks for guidance.”

Some, like Professor Echeverria, in writing for the New York Times (read article here), agreed with the dissent, claiming that this decision will cast such a pall that it will discourage discussions between developers and governments regarding appropriate permit conditions and will deprive the public of needed community benefits that come from the imposition of development fees including wetland mitigation efforts, road and utility upgrades, or park improvements. Although the situation is likely not that dire, California has required rough proportionality findings for conditions that require the payment of money for years and the same was true in Oregon when the Oregon Supreme Court noted the former limit on the Takings Clause to real property in West Linn Corporate Park v. City of West Linn.  Certainly Oregon’s tradition of requiring written findings in the case of both land use permit approvals and denials will provide one vehicle to help achieve this result.

What is more likely true is that this decision is going to make the whole process of obtaining a development permit less certain.  Local government planners will be wary of speculating in advance about calculating the improvement or fees that will apply through pre-application conferences and the like until the applicant has incurred the costs associated with conducting detailed transportation or infrastructure demand plans necessary to evaluate impacts.  Developers should expect that providing adequate findings will take longer.  In a time when governments seem to be falling over themselves to simplify the system and expedite development, the property rights advocates might conclude that this decision is little more than a pyrrhic victory.

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