Posted by: Patricia Salkin | February 8, 2021

Fourth Circuit Holds Property’s Diminution in Value was Insufficient to Establish a Regulatory Taking

This post was authored by Matthew Loescher, Esq.  

Appellant Clayland Farm Enterprises, LLC owned approximately 106 acres of waterfront property adjacent to the Chesapeake Bay in the Village of Royal Oak in Talbot County, Maryland. The Camper family first acquired the property in 1969, and the Camper siblings inherited the property and formed Clayland after their mother died in 2002. Since 1969, the Camper family has used the property for farming and has leased portions for residential use. This case arose from three local zoning ordinances designed to limit new residential development pending the completion of a comprehensive rezoning plan. The district court held that the ordinances were constitutional under the Takings Clause and the Due Process Clause and that Clayland’s equitable claims were moot. Clayland appealed in this case.

The court first analyzed whether Bill Nos. 1214 and 1257 constituted a taking. Prior to the County enacting Bill No. 1214, the property was valued at $3,250,000; after the County enacted Bill No. 1214, the property was valued at $1,950,000. Thus, after the County enacted Bill No. 1214, the property decreased in value by $1,300,000, or approximately 40 percent. Nevertheless, the court noted that it had previously found that a hypothetical 83 percent diminution in value was insufficient to establish a regulatory taking. Furthermore, under Bill Nos. 1214 and 1257, Clayland could subdivide any existing parcel into one additional lot, develop at one unit per two acres, or proceed with the approved six-lot Darby Farm subdivision. The record further reflected that the County had planned to review and revise its 2005 Comprehensive Plan before Clayland even had the opportunity to begin development. Accordingly, the court held the balance of the Penn Central test ultimately favored the County.

Next, Clayland contended that Bill Nos. 1214, 1257, and 1229 violated its substantive due process rights. The  court rejected this contention, finding that Clayland could not establish that the Bills limiting development—Bill Nos. 1214 and 1257—deprived it of a property interest because Clayland lacked any relevant, cognizable property interest. Even assuming that the tier map designations deprived Clayland of a cognizable property interest, the court found that the tier map was rationally related to the County’s zoning powers. As such, the County enacted Bill No. 1229 pursuant to and in conformity with Maryland’s Septics Law.

Clayland lastly claimed that the district court erred in dismissing as moot its remaining claims seeking declaratory and injunctive relief. However, as those claims all sought prospective equitable relief on laws no longer in effect, the equitable claims were moot and there was no live controversy.

Clayland Farm Enterprises, LLC v Talbot County, MD, 2021 WL 419460 (4th Cir. CA 2/8/2021)

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