Cert Granted in North Oaks v. Sarpal

Yesterday, the Supreme Court agreed to hear the appeal of North Oaks v. Sarpal.  To refresh, this case started as North Oaks’ attempt to make a homeowner move a shed to comply with setbacks.  The trial court and the Court of Appeals blocked the City’s action, concluding that because the City (unwittingly) gave Sarpal a flawed property survey map and assured him it was correct, the City was barred from enforcing the correct setbacks.

In a previous post, I hoped that review would be granted, since this Court of Appeals opinion is way out of step with past precedent and current practice.  The doctrine at stake here is “equitable estoppel” – when does “fairness” require that an owner get a pass on a zoning violation?  Since 1980, it’s required “wrongful conduct” on the part of the government.  Subsequent interpretation, confirmed by the Supreme Court in 2006, pegged that phrase to mean “malfeasance,” i.e. somebody attempting to harm the owner.  In general, this is good policy; you shouldn’t get a variance from existing law through the mere bumbling of public officials.  This is especially true in the wake of Krummenacher A City planner has no power to change the zoning code intentionally, and the City Council can’t grant a variance short of a taking, so why should we allow these things to happen because the maps on file at the City are flawed, but nobody’s caught it yet?  If the city staff has maliciously set you up, then that’s different.  If you can prove that, you’ll possibly get a break (there are three other factors to meet first).

The current result in Sarpal eliminates “malfeasance,” and drops the bar down to “mistake.”  Or maybe, “confident mistake” since it’s the insistence of North Oaks planners that the survey map was correct that really seems to get the Courts’ attention (the trial court applied estoppel, the Court of Appeals decided that wasn’t erroneous or an abuse of discretion).  Now we wait to see if the Supreme Court remains consistent with its 2006 holding and reverses, or if another portion of land-use law gets substantially rewritten by the Court.

No Written Reasons Needed to Meet 60-Day Rule

There’s been plenty of fodder for posts lately, but I’ll skip to the 60-day rule decision handed down yesterday by the Supreme Court since that closes the loop on a running discussion here.  I thought the Supreme Court might be looking at making a change in the “60-day rule,” and now it’s happened.  The Court of Appeals disposed of this case (Johnson v. Cook County) in a brief unpublished opinion last August that followed prior decisions requiring a local government to not only act upon a zoning request in 60 days, but also to adopt written findings within that time-frame if the request is denied.  The key portion of the statute (15.99, subd. 2(a)) is this:

Failure of an agency to deny a request within 60 days is approval of the request.  If an agency denies the request, it must state in writing the reasons for the denial at the time that it denies the request.

The logic behind the Court of Appeals’ ruling, and the prior cases supporting it, is that adopting written findings is an essential part of a “denial,” and the denial is ineffective unless those findings exist.  This is certainly good practice, as any board or council is foolish to take any adverse action without fully stating its reasons for doing so on the record.  Putting findings into a written resolution for a vote, particularly on zoning matters that have likely gone through staff review and a planning commission hearing, is simply common sense.  That said, the question remains whether doing so is mandatory to avoid automatic approval or is simply a good idea.

The Supreme Court now says, “just a good idea.”  It hinted in a 2007 decision, Hans Hagen Homes, that written findings might not be mandatory.  Of course, it’s unfortunate that the Court chose to write “denial is complete when a city votes to deny the application and adopts a written statement of its reasons for denial” (emphasis added), because that sure does makes it seem like the Supreme Court ratified the existing understanding of the Rule.  Only in a footnote in Hans Hagen did the Court leave its tip that this may not be, saying that the statute could be read more narrowly, but since nobody asked for that, the Court would “leave it for another day.”  Is it asking too much for opinion-writers to choose between declarative statements and hedges, or at least not to use both while discussing a single issue?

Anyway, the Court follows through on the hint buried in its 2007 footnote, and decides that written findings are not mandatory to avoid an automatic 60-day approval.  Justice Dietzen, writing for the Court, separates the sentences of 15.99, sub 2 into component parts: a “time deadline,” a “penalty provision”, and a “written-reasons requirement.”  From there, the implications are obvious; the “penalty provision” only references the “time deadline,” and thus the “written-reasons requirement” has no direct penalty, making it directory instead of mandatory.  This makes sense as an abstract reading of the statute, but I’m disappointed that the Court completely avoids a discussion of the logic that supported the contrary reading – that written findings were necessary to “complete” a denial.  In that reading, the “written-reasons” sentence is not a standalone requirement, but a clarification of the basic requirement to “approve or deny” requests within 60 days.  This is a perfectly plausible reading, backed by past precedents, and as I noted above, good and competent practice.  I won’t lie; this decision is a relief to county and city attorneys and makes compliance with the 60-day rule much, much simpler.  I just think that when a court knows it’s taking the law in a new direction, it has to put in the effort to not just explain its logic, but explain why it’s rejecting the logic of previous decisions.

Again, it remains best practice to have written findings ready to go if a board or a council might deny a zoning request, even after this opinion.  Justice Dietzen notes as much in the home stretch of the opinion, reminding the audience that if a decision is made without findings or identified factual support, it will likely be overturned in court.  This decision simply frees a board or council to state its reasons verbally at a meeting while moving the denial of a request (or in making a vote against approval), and having those reasons transcribed at a later date.

Supreme Court 05.06.10

The Court released its opinion in Halla Nursery v. Chanhassen, another in the recent line of cases ruling on local government errors.  The Court of Appeals ruled last March that Halla could not claim vested rights through a building permit that should never have issued, and the Supreme Court affirms that today in a unanimous opinion written by Justice Meyer.

Half of the opinion is interpretation of a previous settlement between the parties – Halla never pulled permits to build its facilities in the mid-90’s, leading to a consent decree that covered signage on the property.  In 2005, Halla applied for approval of a new sign, which was bigger than allowed in the consent decree and also included illumination and message boards.  The consent decree prohibited illumination and the City ordinance required a CUP for the message boards, but someone in the City planning department approved it anyway.  Only when the sign was just about done and a citizen complained about the electrical hookups being installed did the City catch the error and seek a stop-work order. 

After dispensing with Halla’s arguments about the judgment, Justice Meyer recaps the law on the vested rights doctrine – both in our state and in several other jurisdictions.  The final result is a strong statement:  “we hold that the vested rights doctrine does not apply when a landowner substantially completes a project in reliance on an erroneously issued sign permit.”  Since the analysis was not in any way limited to sign permits, I would expect that rule to also apply to other kinds of permits.

Supreme Court Rules Unallotment Improper

Earlier today, the Supreme Court released its unallotment opinion.  On a 4-3 vote, the Court affirmed Judge Kathleen Gearin’s decision that the Governor’s unallotment of funds was improper.  Chief Justice Magnuson wrote the majority opinion, joined by Justices Page, Meyer and Paul Anderson.  Justice Gildea wrote the dissent, joined by Justices Dietzen and Barry Anderson. 

The case is ostensibly decided on statutory interpretation, thus avoiding a constitutional ruling.  I say “ostensibly,” because the strongest part of the majority opinion’s “interpretation” is its examination of constitutional separation of powers.  Finding ambiguity about the time constraints that govern when unallotment can be exercised, the crucial distinction made by the majority is between budget creation and budget execution.  Finding that our state requires the production of a balanced budget, the Chief Justice reasons that the Governor and Legislature must arrive at a balanced budget before it can be executed.  In the budget-creating process, the majority reasons, the constitution gives the Governor only three true “powers”: approve bills, veto bills, or line-item veto bills.  With these actions, the acts of the Legislature either go into effect, or it has a real-time opportunity to respond through an override or new legislation.  Allowing unallotment at this stage clearly upsets the balance of power; the Governor can artifically create a “shortfall” by vetoing revenue measures, thus allowing a complete re-write of the budget.  The Chief Justice applies this reasoning to conclude that the Legislature could not have intended to simply hand its budget functions over to the Governor.  The majority interprets the statute to only confer unallotment powers to the Governor after the creation of a balanced budget and the start of the budget biennium.  In so doing, the justices conclude that Governor Pawlenty jumped the gun, and support Judge Gearin’s conclusion that the unallotments are void.

The dissent finds no ambiguity in the statute, and chides the majority for “rewriting” the statute.  Justice Gildea then proceeds to find the statute constitutional.  The flaw in the dissent is that it spends no time addressing the constitutional process for creating a budget, instead focusing its energy on responsibility for “avoiding deficit spending.”  Tellingly, in doing so, the dissent never notes that the “deficit” here is artificial – the Governor vetoed the revenue bills that would have put the budget in balance, and declined to call a special session to arrive at a balanced budget through constitutional procedure.  Far from “assisting” the Legislature in “avoiding deficit spending,” the Governor singlehandedly created a deficit and then used unallotment to rewrite the budget to his liking, while denying the Legislature its constitutionally granted opportunities to respond. 

Justice Page concurs separately to suggest that he would have found the unallotment statute unconstitutional largely because its ambiguity allows these crises to arise. 

The Court’s opinion clearly voids the Diet Program unallotments, and in theory should prevent the Governor from following through with the announced unallotments scheduled to take effect on July 1.  The Legislature and the Governor, already fighting about the current projected shortfall, now has to grapple with an additional $1 to $2 billion of projected deficit.

More Pruning of DNR Authority

The Supreme Court released its opinion today on the St. Mary’s Point variance case, a close companion to the Lakeland variance case decided in February.  By reversing the DNR’s final decision, the Court restricts the DNR from overriding local ordinances that the DNR previously approved. 

As in the Lakeland case, this matter involved local approval of a variance which the DNR refused to “certify.”  It possibly could have been resolved on the same grounds as the Lakeland case (no authority to certify).  The Court majority, citing procedural reasons, focuses instead on the DNR’s role in approving local ordinances.  In this case, the dispute arose when the DNR determined its current rules differed from the local ordinance, and the agency chose to apply its rules.  Under the local ordinance text, a variance wouldn’t be needed (it’s not really explained in the opinion why the variance was sought, or granted).   The Court again looks at the text of the Lower St. Croix act, and concludes that the DNR’s authority ends when the local ordinance is approved, and the local ordinances govern over DNR rules.  Without DNR approval required, the project can go forward.

So through combination of these two decisions, there is no longer a DNR review requirement for local land use decisions in the lower St. Croix river valley.  Local governments must still send ordinance amendments to the DNR for review, but variances and CUPs are now effective on city council approval.

“60-day Rule Case” Turns Out Not To Be A 60-Day Rule Case

The Supreme Court released its ruling in the Lakeland-DNR variance case this morning.  The opinion comes with great anticipation, since the Court seemed to be grabbing non-controversial 60-day cases for review, pointing to a possible shift in doctrine on Minn. Stat. 15.99, the “60-day rule.” 

At least for the moment, that’s not happening.  The Court decided the case solely on the question of the DNR’s authority to “certify” a locally granted variance (an issue added by the Court following the initial oral argument).  Concluding that the DNR lacks the authority to certify or nullify a local zoning decision, the Court declared the DNR aciton (and, by extension, the part of the City ordinance requiring such certification) void, allowing the variance to go into effect.  The Court does not address other issues raised if a threshold issue like authority resolves the entire dispute.

The opinion is simple – the statutes giving DNR authority in this area do not give the agency the power to nullify local land-use decisions.  As the Court works through the statutes involved, it becomes pretty obvious that this is the case, and has been ever since the program began.  The DNR’s argues what appear to be very thin reeds, winding up with what is really an undefensible position: because the Legislature gave us broad rulemaking authority, we can do whatever we want (“Of course our rules must relate to protection of the river area, Senator, but we believe that local governments levy taxes in a way that threatens the riverbank, so the Commissioner needs the ability to certify City budgets.”).  Justice Gildea systematically takes apart each argument for powers beyond “assisting” local governments with their land use ordinances. 

Where this case ends up is in the building line of recent cases that holds every level of government to just what the constitution and statutes give to it – no more (this case, cases where local governments gave permits they shouldn’t have) and no less (ruling out estoppel when a government official drops the ball).  The rule is becoming clear (if it wasn’t already) that individual actors do not get to alter their granted powers through their actions.  If the Court can stick to this rule when it looks at Constitutional powers, the unallotment decision shouldn’t be that difficult for them.

Supreme Court 10.29.09

In August, I wrote about the same-day release of Pigs R Us v. Compton Township and Pawn America v. St. Louis Park.  Both cases involved the local government taking evasive action in the face of an unwanted project – a pig farm in the township, a pawnshop in the suburb.  Compton Township chose the “hastily rewrite the zoning code” maneuver; St. Louis Park enacted a moratorium.  Compton Township lost its case in district court and didn’t do any better on appeal.  St. Louis Park won its district court case and prevailed on appeal.  At the time, I thought the Court of Appeals might be mocking the Township by releasing the St. Louis Park opinion on the same day.  Paired together, there was a definite “right way, wrong way” feel to the decisions.

Well, the Supreme Court is taking the St. Louis Park case for review.  If you believe that “the Court grants cert to reverse,” perhaps there won’t be a “right way” to block an otherwise-permitted use when this case is resolved next year.  Compton Township, on the other hand, is headed back to District Court for a damages trial now that the Supreme Court denied its petition for review.