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.


The DNR Adjusts

In the last several months, the Supreme Court has eviscerated the DNR’s ability to directly manage shoreline property development.  The DNR had exercised review authority over shoreline variances and insisted that its agency rules overrode local ordinances, even when local ordinances had been DNR-approved.  Those powers have now vanished, and in March the DNR suggested that it was going to simply challenge “bad” local decisions in district court.

Today’s Star Tribune reports that the agency is following through on that plan.  As it turns out, for all the Court has done to limit the DNR this year, the Krummenacher variance decision will likely give the agency its mojo back.  The DNR has sued a township in western Minnesota to nullify a variance granted to allow a lake home within 15 feet of the shoreline.  The news story, and the Star Tribune’s prior reporting, makes clear just how much of a seismic shift the Krummenacher holding creates; local officials in the area estimate that 70% – 90% of variance requests are approved by local officials.  In the past, just about anybody who presented something out of line with zoning was simply advised to apply for a variance.  Again, if the use made sense (or at least didn’t offend anyone), the variance was easy to get as long as the “problem” arguably creating the need for a variance wasn’t the owner’s fault.  At this point, cities and towns should just stop suggesting that owners should seek variances, as the standard is now extremely difficult to satisfy.  That, and if it involves a shoreline, bluffline, or scenic area, the DNR will sue you for approving it.

Variance Law Clarified By Supreme Court

The Court released its opinion in Krummenacher v. Minnetonka, which now turns out to be a landmark opinion on land-use variances, rather than a case about nonconforming uses.  Chief Justice Gildea wrote the unanimous opinion. 

The fireworks start on page 11, when J. Gildea picks up the meaning of the phrase, “the property in question cannot be put to reasonable use if used under conditions allowed by official controls.”  Background: for at least the past 20 years, cities (and for that matter, courts) have taken that phrase to mean that the proposed use is reasonable but blocked by the zoning code.  Short of something truly nutty, this is always the case, and the analysis moves on to whether the problem is or is not the landowner’s fault, or whether the proposal will “alter the character” of the area.  The City of Minnetonka analyzed the request along these lines, and the Court of Appeals approved.

The Supreme Court, on the other hand, decides that “put to reasonable use” is a very tough standard, one that should only be met when absolutely necessary to avoid a regulatory taking.  Justice Gildea eventually gets around to a fairly compelling justification for this holding: comparing “undue hardship” as it’s been understood to operate with our precedent on “practical difficulties,” which is supposed to be a more lenient standard.  Using the prevailing interpretation of “reasonable use,” she demonstrates that “undue hardship” has somehow become the easier standard to meet, and concludes that this cannot stand with the prior Supreme Court decisions on “practical difficulties” (the “undue hardship” cases have to this point been Court of Appeals decisions). 

I say, “eventually,” because for some reason the opinion tries to insist that the “plain language of the statute” requires a different finding.  Justice Gildea accuses the Court of Appeals of “rewriting the statute” (something that must be set as an AutoComplete phrase for her at this point) for following conventional wisdom and past precedent in the matter.  The “plain language” argument is horribly misplaced here.  The near quarter-century of contrary interpretation (without much controversy, either) is one fact that, at the very least, should destroy any notion that the language is “unambiguous.”  More troublesome, though, is that in decreeing a “plain meaning” for the statute, Justice Gildea herself rewrites the statute.  The statute reads: “put to reasonable use.”  The City, following conventional wisdom and precedent, applies the phrase as “put to a reasonable use.”  The challenger here insists that it should be “put to any reasonable use.”  That’s the whole debate – which modifier should be plugged in between “to” and “reasonable” to apply the statute to some facts?  You can, and Justice Gildea does, make a compelling contextual argument that “put to any reasonable use” is the right answer, but to insist that your conclusion is the “plain meaning of the statute” in this situation is just wrong.  If this is “strict constructionism,” then strict constructionism has no meaning.  We have settled methods for interpreting statutes, and they should be used when there is ambiguity, instead of doing partial analysis and then propping that up by declaring “plain meaning.”

So this case now goes back to Minnetonka for review under the variance standards as declared by the Court.  My question at the outset, and especially now, is: why did this get here?  Why is this application (to expand a non-conforming garage) going through variance?  As the Court made clear in the first half of its opinion, cities have the power to allow the expansion of nonconforming uses.  Moreover, cities can use any critieria they like in deciding whether to approve such an expansion – the sole requirement is to pass an ordinance allowing expansion, and describing how such permission can be obtained.  Minnetonka chose to use its variance procedure to consider these requests.  However, there is absolutely no reason that this must be tied to a variance procedure; to me, using variance considerations here make no sense.    The property is already nonconforming, thus is already at variance with the terms of the zoning code.  So from what, exactly, is the expansion request varying?  Under this Krummenacher decision, variance is now just an escape hatch used to avoid regulatory taking – which is exactly what nonconforming use doctrine is in the first place. 

My thought is that Minnetonka can moot this case, or at least make its life much easier at the re-consideration, by amending its ordinance to provide for a separate procedure to consider expansion of a nonconforming use or building.

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.

The DNR Gets It

The Star Tribune today has an article following up on the DNR/Lakeland variance dispute, looking at the constituencies behind the fight.  Legislators have introduced a bill to override the recent Supreme Court decision and “restore” the DNR’s role as a veto point for local-government variance decisions.  Interestingly enough, the DNR opposes the effort:

The DNR doesn’t support the legislative bill to restore its authority to support or deny local variances, Shodeen said. Instead, the DNR now prefers to take contested cases — situations where the agency thinks a city or township hasn’t followed laws already in place — to district court.

This strikes me as exactly the right approach.  Every zoning code has variance standards, and there is a decent body of law surrounding what is and what is not a proper variance.  Anyone bothered by a variance decision can take it to district court, where the city’s decision is tested against those existing standards.  The DNR’s rules, on paper, add nothing to those standards.  They just ensures that the DNR controls the decision, without any requirement to consider opposing viewpoints, or any direct accountability to the public.  The rules (and proposed bill) also ensured that the first round of fighting occurred in the administrative-hearing arena.  Bigger problems arise when the DNR uses this process to shift the goalposts – for instance, substituting “compliance with the intent of the scenic river plan” for “will not alter the essential character of the locality.” 

It’s good that the DNR recognizes that in large part, this is a waste, especially when factoring in the data that the process has really only stopped 2 projects in “recent years,” with 7 others proceeding on past DNR opposition.  There’s no compelling reason either in theory or in practice that the DNR’s objections to a local zoning decision not follow the path of everyone else’s objections – an appeal to district court.

Supreme Court 10.01.09

No opinions, but two cert decisions of interest.  The Court granted review in Krummenacher v. Minnetonka, in which the Court of Appeals held that variance procedures are appropriate to consider and approve changes in a nonconforming use.  When the opinion came out, I really didn’t find it all that remarkable.  Maybe the Court is just trying to catch up in the area of zoning nonconformities, where our reported case history is surprisingly sparse.  Review almost has to be on the main question of whether variance applies to nonconformities; it’s not in the Court’s nature to “correct error” in the City’s hardship analysis or in whether the record needed to be augmented at the district court level.  If there’s any quibble with the Court of Appeals opinion, it’s that the nonconformity statute permits cities to allow expansion “by ordinance,” which to me implies the need for a separate ordinance (and presumably a focused policy discussion) on the topic of expanding nonconformities.  Applying a variance procedure that was already on the books doesn’t fit that bill, though the Court’s reasoning seemed solid when I read it in July.

The Court denies review of the City of Sleepy Eye’s decision to fire its police chief.  At most, the Court might have taken the issue of whether the City had to afford independent review to the chief, but past cases have gone by the boards with a lot less than the two full hearings (a year apart, almost) that this employee received.  That, and perhaps the Court didn’t feel like spending time on the case of a police chief fired (in part) for huffing paint in uniform.  Just a guess.

Supreme Court 09.10.09

Via the Pioneer Press, the Court has requested supplemental briefs and additional argument in the Lakeland/DNR variance approval case (previous posts here and here).  The argument is set for October 12.   The issues noted in the article indicate that the Supreme Court is struggling to determine whether the DNR Commissioner has any decision authority at all once the agency approves a local regulation.  If that’s found lacking, then it probably follows that the local ordinance controls any decision once approved by DNR, regardless of the appearance of a conflict with DNR rules.

The Court issues an opinion vacating all prior actions on the St Paul Port Authority’s 876 Bonds, finding that the lower courts improperly extended a 1993 statute amendment to the bonds, which were all issued prior to 1991.  The short version is that development authority bonds issued since 1993 can be treated as a trust, even if no trust was specifically created, and the authority as trustee can attempt to fix problems (like running out of money, as the 876 Fund did) by petitioning the district court.  Development authority bonds issued before 1993 cannot take advantage of this mechanism, unless a trust was specifically created when the bonds were issued.  A wrinkle to watch going forward is the Court’s decision to remand the issue of the Authority’s 2002 and 2004 petitions to the district court.  Having found that the lower court had no jurisdiction over the bonds and should not have approved the Dutch auctions that took place, the question remains: is the motion to vacate those orders made within a reasonable time?  Translated: since the auctions have already happened and bondholders were paid (without objection at the time), what good is it to vacate the order that let that happen?  The district court gets that issue back for fact-finding and decision.