Lake Elmo’s Trade Barriers, Revisited

Lake Elmo’s mayor submitted an op-ed response to the Pioneer Press (appearing 12/17) concerning the story I wrote about last week.  The Mayor quickly gets out the point that the “homegrown law” is really a land-use regulation.  He frames the issue as one of a rogue landowner – it sure seems to be just one, based on the op-ed – who won’t abide by the City’s zoning code.  So far, so good.  If this is just about unchecked land use, then the City is on solid ground.

Unfortunately, it’s not.  At one point, the Mayor sets up a strawman: what if your neighbor turned his garage and front yard into a used car lot and kiddie play-place?  The implication is that “commercial” uses should only take place on “commercial” property.  Trouble is, Lake Elmo’s code allows this particular neighbor to sell flowers, pumpkins and Christmas trees from their farm property.  The mayor terms it an “exception,” but a conditional use permit is not an “exception” to zoning in any way, shape or form.  It’s an integral part of the regulation, and the owner is completely entitled to a permit if they meet criteria (see today’s other post).  The City can either eliminate the category of use (again, farmers have a more or less unfettered state-constitutional right to sell their own produce), or grant permits to owners that qualify.

Since there’s no real issue of “commercial” use versus “farm” use, the “grow your own” restriction seems to be the only issue at stake here.  Here, the gist of the original news article – a “homegrown law” creates winners and losers based on the source of the products offered for sale – unavoidably raises Commerce Clause issues.  Another way to say “create winners and losers” is to say the City “discriminates.”  A state or local government can occasionally adopt regulations which discriminate against out-of-state commerce, but it needs a very good reason that stands separate and apart from the goods’ place of origin.  There also needs to be no other way to accomplish this very important goal except to discriminate against out-of-state products.  It’s hard to see how this particular law stands under that standard, or any proposed compromise which would allow a certain percentage of “foreign” goods to be sold.

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Court of Appeals 12.22.09

The Court grants an outright reversal of a Morrison County CUP denial, ordering a CUP grant to a feedlot.  It should have been a remand, as crucial parts of the record – particularly on environmental impacts – come across as unclear or incomplete.  Normally, that signals a return to the County Board to correct any sloppiness in the decision, or at least to get the facts straight to see if the Board can make the right decision.  Instead, this Court went straight to the second-guess for some reason.   The Court’s irritation with the County Board permeates the opinion and likely dictated the harsher result.  Where did it come from? 

My money is on the Board’s second-guessing of its Planning Commission.  Over the last three or four years, the Court has consistently knocked down Council or Board decisions that go against a PC recommendation to approve.  In terms of legal arguments, the PC normally recommends conditions, which then gives the applicant a near slam-dunk argument that “reasonable conditions” can address any concerns.  It’s usually the atmospherics that doom the decision, though; the records of the Council or Board meetings that reverse the PC recommendations are usually circus sideshow-esque.  In a situation where everything has to be meticulously documented and nailed down, the elected bodies in this position usually do the exact opposite – ignore chunks of the application, rely heavily (or entirely) on one or two speakers who oppose the project, drag in dirt on the applicant from other projects, or invent vague and unattainable conditions or scenarios for approval.  Well, the Morrison County Board more or less did all of the above.  Making matters worse, this was the feedlot applicants’ third attempt at getting a CUP, so the Board’s knee-jerk reaction looks even worse in contrast to (what the Court presents as) the Planning Commisison’s measured and reasoned approach. 

We’re not quite to the point where we need to adopt a principle, “don’t ever, EVER overrule the Planning Commission.”  A PC recommendation should be seen as changing , that the Council or Board no longer has a free hand in the matter.  If the Council tends towards opposing the project, the deliberations must focus on the PC’s recommendations and especially the recommended conditions.  Try to refute any of the PC’s points in four sentences or less.  Make sure that if neighbors’ testimony is cited as supporting evidence that at least one document or “expert” statement also supports the finding (if neighbor opposition is all there is, then approve the permit).  When deliberations are done, take a recess to let the planner or clerk write down a set of findings and conclusions before voting.  Deliberate over the new document for a few minutes before taking a vote.  It won’t be a short meeting, but then the Court of Appeals won’t be granting land-use permits in your town, either.

Some Ordinances Should Stay Dusty

It’s been busy, and the courts haven’t provided much material for posts in the last two months.  I have a minute now, though, so it’s time to discuss the story on the front page of last Thursday’s Pioneer Press telling us about Lake Elmo’s plans to enforce a ban on “non-local produce, ” apparently including Christmas trees.  The way the news stories present it, Lake Elmo has an ordinance banning the sale of non-Lake Elmo produce, which has been on the books since 1980 but has been overlooked for the last 29 years.  City officials appear in the story making blatantly protectionist statements.  Having been awakened to the issue by a request to expand a parking area, the City plans to put the restriction into play starting Jan. 1.

The news stories don’t mention this, but it’s not even remotely legal for Lake Elmo to establish a trade restriction like that.  The Christmas trees of at least one of the sellers quoted come to his Lake Elmo location from Wisconsin.  Two words: “interstate commerce.”  The State doesn’t have the power to make this sort of regulation, so it’s a safe bet that Lake Elmo also lacks that authority. 

Of course, the “Lake Elmo ordinance” isn’t a blatant standalone trade restriction.  It’s a wrinkle in its zoning code.  In some of its agricultural districts, Lake Elmo allows “Agricultural Sales Businesses” as a permitted use.  Flip back to the beginning of their code book, and you’ll find “Agrigultural Sales Business” defined:

AGRICULTURAL SALES BUSINESS.  The retail sale of fresh fruits, vegetables, flowers, herbs, trees, or other agricultural, floricultural, or horticultural products produced on the premises.  The operation may be indoors or outdoors, include pick-your-own opportunities, and may involve accessory sales of unprocessed foodstuffs; home processed food products such as jams, jellies, pickles, sauces; or baked goods and homemade handicrafts.  The floor area devoted to the sale of accessory items shall not exceed 25% of the total floor area.  No commercially packaged handicrafts or commercially processed or packaged foodstuffs shall be sold as accessory items.  No activities other than the sale of goods as outlined above shall be allowed as part of the AGRICULTURAL SALES BUSINESS.

So the reality is that Lake Elmo has an ordinance on the books preventing importation of product from any source, not just banning “foreign” products while allowing free trade in Lake Elmo-grown produce.  So the problem is not that some of these tree re-sellers are bringing in the wrong product, it’s that they shouldn’t be in business at all.  Given how long some of these businesses appear to have been in place, there will be problems.  First, there’s non-conforming use protections: the farm featured in the article is described as “34-year-old,” pre-dating the ordinance.  If it was perfectly legal to sell imported trees in 1979, and this farm was doing that, it really doesn’t matter what Lake Elmo’s zoning code says today.  Then, there’s what might come up in the name of compromise: at the end of the article, a City official throws out the idea of a new license for selling imported products, or a percentage cap on non-local product.  These proposals are straight trade regulations which the City lack the power to enact.  The commerce issue remains a threat even without a compromise, since the definition really only distinguishes between “legal” ag sales businesses and “illegal” ones on the source of their merchandise.  And since Minnesota farmers already have a state constitutional right to sell the produce of their own farm without a license of any kind, the only places that will require a license are the importers.  There doesn’t appear to be an easy way out of this – either eliminate the requirement, or drive out anyone importing produce.  The title gives away my opinion, of course, but that’s the question facing Lake Elmo officials.