The court said that the challenged Ordinance was adopted to implement the County Comprehensive Plan and allowed interim use by the landowner of the dedicated property until the County needs it.  If the landowner believes the rough proportionality of the dedication is excessive, she may apply for a discretionary waiver, but must provide extensive appraisal and other information at her own expense for determination of a County review committee which may pay the differential, grant credits on systems development charges or provide for other waivers of costs of associated improvements, or any combination thereof.  A landowner may also apply for a variance from the waiver by showing that the application of that waiver causes a hardship; however, the variance is highly discretionary.  Plaintiff owns 16.5 acres of land zoned commercial.  Under the challenged Ordinance, there was a 50-foot right-of-way overlap of a future public road along one side of the property for approximately 1400 feet.  Plaintiff applied for site plan approval for a shopping center.  Defendant demanded the right of way, while the Florida Department of Transportation (“FDOT”) demanded a further 90-foot setback.  Plaintiff resubmitted the site plan with the reservation of right objecting to the dedication and setback and did not appeal the grant of the site plan approval with those conditions.  Nor did Plaintiff seek a waiver or variance; instead Plaintiff filed this action in Federal District Court.

The action did not assert a taking, except under Nollan and Dolan, and also raised due process and equal protection challenges, as well as access to the courts and denial of a jury trial grounds.  On cross motions for summary judgment, the federal magistrate found the challenged Ordinance most susceptible to a substantive due process challenge, finding it bore no rational relationship to a legitimate governmental purpose but rather was effectively an extortion scheme by which the county leveraged its police power with a system of burdensome appeals to acquire property, thus circumventing the eminent domain process.  The magistrate made very various rulings recommending invalidity of the Ordinance.  Both sides appealed to the federal judge.

Defendant first argued that the due process claim was not ripe, as would be a taking claim in similar circumstances.  Under Lingle v. Chevron U.S.A., 544 U.S. 528, 541-42 (2005) there are four possible takings claims to which the government may go “too far” under the takings clause:  permanent occupation, deprivation of all economically beneficial use, failure of the Penn-Central factors, or failure to meet the nexus and rough proportionality tests of Nollan and Dolan.  For due process purposes, the enactment of the challenged Ordinance, with its complicated system to avoid just compensation, makes a final decision as to Plaintiff’s property and, if the allegations be true, entitles Plaintiff to nominal damages at least.  The court rejected defendant’s contention that there was a four-year statute of limitation on challenging the constitutionality of the Ordinance before a concrete injury occurred.  Even if there were such a limitation, the court found that if there were such a statute of limitations, this complaint was timely.

The court noted the frequent conflation between the due process and takings claims and added that a plaintiff may have a substantive due process claim if a regulation does not advance a legitimate governmental purpose – a very different issue from that of just compensation.  If the taking not be for a public use or be arbitrarily and capriciously applied, there could be a substantive due process violation.  In this case, the magistrate found that the challenged ordinance leveraged the police power so as to compel a landowner to relinquish rights granted by the Constitution or to expend its time and effort in defending property rights.  Nollan and Dolan prohibit the discretion to grant or deny a governmental accommodation in return for relinquishment of a constitutional right.  This is true under the free speech and search and seizure clauses and enforced by substantive due process.  Under Nollan and Dolan, it is possible for a real property exaction to occur if there is a nexus between the exaction and the impact of the use and that exaction is administered in rough proportionality.

In this case there was some relationship between the exaction and the need for a transportation facility; thus there was no “Nollan problem.”  However, under Dolan, it is the public agency that bears the burden of proof to show rough proportionality.  In this case the challenged ordinance reverses that burden and requires the County to prove nothing as well as to be the arbiter of the amount of just compensation it will pay.  Any right to develop land is thus held at ransom – a perverse outcome and effectively a scheme of extortion.  If the landowner refuses to dedicate the land, the property remains undeveloped.  If the landowner agrees, it effectively waives the right to just compensation unless it undertakes a burdensome administrative process.  This case, therefore, is about due process, rather than takings.

In this case, Defendant required conveyance of the land in the transportation corridor to be made to the County at no cost, avoiding eminent domain altogether and requiring a landowner to undergo an “in-house review” in which the landowner has the burden of proof.  The land accumulated under the scheme may never be used – there is no requirement that the County ever build a road and nothing prevents it from diverting the property to another use or selling it.  While building and maintaining an adequate road system is a legitimate governmental purpose, the means chosen to achieve those objectives must be constitutional.  Landowners could bring an inverse condemnation action under Florida law, but it would not be on the same footing as a landowner in a traditional eminent domain proceeding, with its attendant protections of an appraisal, attorney fees, burden of proof, and payment into court before a taking occurs.  For those who do not seek to develop before the road is ready to be built utilize statutory eminent domain proceedings, while those who seek to develop earlier must presumably give up the land for free.  The court added:

In sum, the Ordinance discriminates based on economic aspiration.  Against the class of landowners who never attempt to develop, Pasco County will acquire land by eminent domain, beginning when and if Pasco County needs the land.  A landowner without need of a permit enjoys the protection of condemnation and receives the “just compensation” guaranteed by the Constitution.  A landowner who aspires to develop property and who aspires to a permit for a grocery store, a doctor’s office, an apartment building, or the like faces an immediate confiscation of land.  For these landowners, a last but forlorn hope for just compensation is in Pasco County’s prolix, opaque, and overbearing Ordinance.  Further, these landowners’ just compensation is an elusive contingency, held for ransom by a committee methodically acquiring property at a steep, aggregate discount.

Thus the court concluded there was an improper use of the police power and a failure to advance a legitimate governmental purpose (i.e., not using eminent domain but the extortion of administrative scheme).

The court found no equal protection violation, given the use of a rational basis analysis where the landowner was required to negate any plausible inference that there was a legitimate basis for the transportation facility.  Similarly, the Plaintiff failed to show how its access to the federal courts and right to a jury trial were denied.  The court also declined to reach claims based on the Florida Constitution, noting that Plaintiff had also filed similar claims in state court.

With a flourish, the court concluded:

Pasco County has enacted an ordinance that effects what, in more plain-spoken times, an informed observer would call a “land grab,” the manifest purpose of which is to evade the constitutional requirement for “just compensation,” that is, to grab land for free.  Viewed more microscopically, Pasco County’s Ordinance designs to accost a citizen as the citizen approaches the government to apply for a development permit, designs to withhold from a citizen the development permit unless the citizen yields to an extortionate demand to relinquish the constitutional right of “just compensation,” and designs first and foremost to accumulate – for free – land for which a citizen would otherwise receive just compensation.

Aware undoubtedly of the brazenness of the Ordinance, Pasco County has garnished the Ordinance, has disguised the Ordinance, has planted in the Ordinance a distraction, using the familiar phrase “roughly proportional” or “rough proportionality,” words intended to evoke the soothing reassurance of the Supreme Court’s decision in Dolan, words intended to deploy aggressively the foggy notion that if the words “roughly proportional” appear in a scheme to regulate land, the scheme is constitutional. Not so.

The parties laboriously briefed in this action an array of theories. Both the magistrate judge and I have examined, exhaustively and exhaustingly, the contending theories, briefed and unbriefed.  The magistrate judge has opined formidably. Accepting the magistrate judge’s report for the most part but viewing the law in part from a slightly different vantage, I contribute some additional analysis and accept the magistrate judge’s conclusion.  Another judge might find the magistrate judge’s opinion or this opinion inexact in this or that particular of constitutional law.  Nonetheless, this Ordinance is an unmistakable, abusive, and coercive misapplication of governmental power, perpetrated to cynically evade the Constitution.  The Ordinance cannot stand, whether for the precise reasons stated here or for a related reason.

This case is a tour de force in its analysis of the effect to frustrate the constitutional protection of dealing with the just compensation clause by way of the due process clause.  Constitutional requirements cannot be frustrated by jerry-built devices allocating burdens and requiring the party deprived of property to take the initiative of securing just compensation.  The case presents an object lesson in what local governments should not do.

Hillcrest Property LLP v. Pasco County, 2013 WL1502627 (M.D. Fla. 4/12/2013).

The opinion can be accessed at: http://scholar.google.com/scholar_case?case=11475200835668003192&hl=en&as_sdt=2&as_vis=1&oi=scholarr

Special thanks to Edward Sullivan, Esq. of Garvey Schubert and Barer for providing this summary.

Hejna v Board of Appeals of Village of Amityville, 2013 WL 1442463 (N.Y.A.D. 2 Dept. 4/10/2013)

The opinion can be accessed at: http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2013/D37845.pdf

La Russo v Neuringer, 2013 WL 1318816 (N.Y.A.D. 2 Dept. 4/3/2013)

The opinion can be accessed at: http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2013/D37812.pdf

In mid-2004, the Tines built a deck on the back of the house which was not visible from the street and extended twelve additional feet toward the lake, further into the setback area.  The Town did not perform any inspections after 2003, and did not appear to know about the deck, since the Tines did not obtain any building permits or other permission for the deck project.  When the Tines decided to sell the property in 2008, they sought a certificate of zoning compliance and certificate of occupancy from the Town, which sent an official to inspect the property.  The official discovered the illegal deck during that inspection.  At that point, the Tines sought to obtain a variance for the deck, which the Zoning Board denied.

In January 2009, the Town sent the Tines a notice of violation and cease and desist letter ordering the Tines to remedy the setback violation caused by the deck.  The Tines appealed the order, claiming that the statute of limitations on enforcement against them for the illegal deck had lapsed, since the violation had existed for more than that statutory three years.  The Zoning Board denied the appeal; a decision which the Tines appealed in Connecticut state court.

At trial, the court concluded that the statute of limitations for enforcement of zoning violations began to run at the time of construction, not at the time that the Town was given notice of the zoning violation, and finding that the deck in this case was a “building” for purposes of applying the statute of limitations.  Since more than three years had elapsed since the offending building was constructed, the court held that the Town’s attempt to pursue the zoning violation and enforce the setback was untimely.  The Town here appeals.

On appeal, the Connecticut Supreme Court considered whether the deck constituted a “building” for statute of limitations purposes.  Conn. General Statutes § 13(a) provided that “when a building is so situated on a lot that it violates a zoning regulation of a municipality which prescribes the location of such a building in relation to the boundaries of the lot . . . and when such building has been so situated for three years without the institution of an action to enforce such regulation, such building shall be deemed a nonconforming building in relation to such boundaries.”  The statute does not define “building,” but the Court determined that the plain meaning of the term contemplated a structure with walls and a roof, not merely an attached deck.  Therefore, the Court held that a deck was not a “building” under § 13(a) and the Town’s enforcement action against the Tines for the illegal deck was not barred by the 3-year statute of limitations set forth in that provision.  The Court reversed the trial court’s decision and upheld the Zoning Board’s decision to dismiss the Tines’ appeal of the enforcement order.

Tine v. Zoning Board of Appeals of the Town of Lebanon, 308 Conn. 300 (Conn. 4/23/13)

The opinion can be accessed at: http://scholar.google.com/scholar_case?case=14764313810007497123&hl=en&as_sdt=2&as_vis=1&oi=scholarr

Barros v Town of Ossining Zoning Board of Appeals, 2013 WL 1632502 (N.Y.A.D. 2 Dept. 4/17/2013).

The opinion can be accessed at:  http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2013/D37978.pdf

Town of Hempstead v Board of Appeals of the Town of Hempstead, 2012 WL 1319372 (N.Y.A.D. 2 Dept. 4/3/2013)

The opinion can be accessed at: http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2013/D37813.pdf

On appeal, CCS argued that the court erred in claiming that the informal conversations between CCS’s expediter and Brookhaven officials amounted to adequate pre-deprivation process. Furthermore, CCS contended that the delay in acting on its claim for correction of its CO failed to accord adequate post-deprivation process. 

The Second Circuit affirmed the trial court’s judgment, though for different reasons, noting  that it is firmly established in the Second Circuit that in order succeed on a due process claim, the plaintiff, in proving a federally protected property interest in a permit, “must show that, at the time the permit was denied, there was no uncertainty regarding his entitlement to it under applicable state or local law, and the issuing authority had no discretion to withhold it in his particular case.” In Brookhaven, before a building permit is issued, the chief building inspector must determine if any code violations exist on the property. Here, CCS sought to construct a building that contained a side structure not accounted for in the CO, and thus there was a code violation precluding the issuance of the permit. CCS had the burden of proving that no violation existed on the property in question, but because an existing violation created “uncertainty” as to CCS’s entitlement to the permit, CCS could not demonstrate that it held a property interest in an unissued permit affording it due process protections. 

C.C.S.COM USA, INC. v. Gerhauser, 2013 WL 406173  (2^nd Cir. (NY) 2/4/2013) 

The opinion can be accessed at: http://scholar.google.com/scholar_case?case=2579384603276814126&hl=en&as_sdt=2&as_vis=1&oi=scholarr

The Appellate Division found that there were issues of fact in the record relating to causation which led them to affirm the ruling of the Supreme Court. The court noted that takeout lenders also had suspicions about the zoning issues before the crane collapse, and that all the later events contributing to the plaintiff’s loss should be considered by a fact-finder.

Arbor Realty Funding, LLC v. Herrick, Feinstein LLP, 103 A.D.3d 576 (A.D. 1st Dep’t. 3/26/2013)

The opinion can be accessed at: http://www.nycourts.gov/reporter/3dseries/2013/2013_01216.htm

Horton, another developer, purchased most of the subdivision property from BRS subject to the above proffer fees. Horton began paying $12,000 for each building permit issued, but later learned that the County would still charge him the additional $4,000 per permit as the hook-up fee. Horton decided to continue paying the excess amount in order to avoid any further damage to himself and the construction, and eventually filed a declaratory judgment action asking the trial court to declare that the County could not lawfully assess the $4,000 fee against it. The court agreed with Horton, holding that he was not obligated to pay the fee. Also before the court was Horton’s restitution action seeking reimbursement of the fees. The Board put forth the voluntary payment doctrine as an affirmative defense, and the court sided with the Board on this issue: “After ruling in Horton’s favor in the declaratory judgment action, the court held in this action that Horton was nevertheless barred from being awarded reimbursement of the unlawful fees because it paid them ‘voluntarily’ within the meaning of the voluntary payment doctrine.”

On appeal to the Supreme Court of Virginia, the court first explained  the voluntary payment doctrine: “Where a party pays an illegal demand with a full knowledge of all the facts which render such demand illegal, [i] without an immediate and urgent necessity therefor [sic], or [ii] unless to release his person or property from detention, or [iii] to prevent an immediate seizure of his person or property, such payment must be deemed voluntary, and cannot be recovered back. And the fact that the party at the time of making the payment, files a written protest, does not make the payment involuntary.” In addition, all payments are presumed to be made voluntarily unless the plaintiff can prove otherwise.

To negate the voluntary payment defense, Horton put forth four arguments, the first being that the payments were made involuntarily because the County would not have issued the permits without the fees and this amounted to a seizure of a Horton’s right to develop the property. The court rejected this argument on the grounds that Horton was not in fact deprived of the right to develop the property. Indeed, he proceeded with development to the completion of the project. Secondly, Horton contended that he faced criminal and civil penalties for breaching the contract, so he was forced to pay. The court rejected this argument too, pointing out that the County never threatened him with criminal proceedings. Additionally, Horton would have had to demonstrate an “immediate and urgent necessity” for paying the County’s unlawful demand, which he did not.  The court elaborated on this necessity more for Horton’s third argument. There, he asserted this necessity as the reason for making the payments involuntarily, arguing that Horton’s need to construct the houses and finish the project amounted to an immediate and urgent necessity. But to succeed on a claim, a plaintiff must show that the immediacy of the situation precluded being able to seek an appropriate legal remedy. This proved fatal for Horton who acquired the permits and paid the fees for over three years and did not establish any reason why it could not have sought injunctive relief before acquiring any one of the permits. Therefore, this argument failed as well.

Lastly, Horton claimed that his protestations to County officials for paying the fees and its filing of the declaratory judgment action supported his claim for involuntarily making the payments. The court found this argument to be without merit because simply protesting an unlawful demand does not render payment of the demand involuntary. Because Horton could not establish that his payments were involuntary, he did not rebut the assumption that all payments are made voluntarily. Therefore, the court found in favor of the Board under the voluntary payment doctrine.

D.R. Horton, Inc v. Board of Sup’rs for County of Warren, 2013 WL 718757 (VA. 2/28/2013)

The opinion can be accessed at: http://www.courts.state.va.us/opinions/opnscvwp/1120384.pdf

On January 11, 2011, the Board held a public hearing on the Maddalonis’ site plan, and the Board then granted approval. Two months later, several neighbors, some who live adjacent to or across the street from the Maddalonis’ property and some who lived one half mile away, commenced an action to review the Board’s grant of approval. The neighbors alleged that the approval was arbitrary and capricious because the site plan violated setback and vegetation-clearing requirements. Also, they challenged the finding that the plan was consistent with the LWRP. Lastly, they argued that the Maddalonis’ would not be entitled to any variances from the setback requirements and clearing limitations purportedly necessary for the construction project. The Village agencies, comprising the Village, the Planning Board, and the Zoning Board of Appeals, plus the Maddalonis’, moved to dismiss the complaint for lack of standing, and the motions were granted. The neighbors subsequently appealed.

The Appellate Division, Second Department, affirmed in part and reversed in part. As for the consistency with the LWRP claim, the Appellate Division held that the Supreme Court had correctly dismissed the claim as time-barred by the applicable four month statute of limitations period. Secondly, the claim arguing that the Maddalonis’ were not entitled to be granted variances was correctly dismissed as unripe. As the Maddalonis’ had not made an application for variances and a final resolution had not been made, the claim was unripe for determination.

However, the Supreme Court improperly granted that branch of the separate motions which was to dismiss, as time-barred, the second cause of action, which sought review of the Planning Board’s determination to grant site plan approval.  Two weeks after the January 11th meeting, the Board sent a letter to the Maddalonis’ merely informing them that a decision had been reached, though not stating the actual outcome. Thereafter, the Board never submitted a document that could be construed as the Planning Board’s decision itself. The only document, therefore, that could constitute the Board’s decision would be the minutes from the January 11th meeting, but there was no indication in the record of when, or if, the minutes were filed with the Village Clerk. Because of this missing information, the 30-day statute of limitations period did not begin to run before this case was initiation. Accordingly, the case was remanded to the Supreme Court for a determination on the merits of this cause of action.

Matter of Shepherd v Maddaloni, 103 A.D.3d 901, 2013 WL 692818 (N.Y.A.D. 2 Dept 3/1/2013.)

The opinion can be accessed at: http://www.newyorklawjournal.com/CaseDecisionNY.jsp?id=1202590545212&slreturn=20130415104513