Court of Appeals 08.24.10

A couple of cases of interest on the unpublished list today:

Dayspring Development, LLC v.  Little Canada:  A case on its third trip to the Court; this time, the Court holds that the LLC lacks standing to seek compensation for a regulatory taking that occurred between 2003 and 2005.  At the time of the taking, the principal officer of the LLC owned the property individually, only quitclaiming the property to the LLC after the City relented and granted a final plat and development agreement.  The Court determines that the interest in takings compensation is separate from the general ownership interest, and the transfer of property to the LLC failed to convey the right to takings compensation.  This is not the usual outcome for a regulatory takings case, but the Court felt that because the takings period was finite (ending with the plat approval), the right to compensation should be treated as a standard eminent-domain claim, accruing to the owner at the time of the taking, unless the interest is specifically conveyed.  The logic is simple enough, but don’t be surprised if the Supreme Court picks it up to chew over the need for a separate transfer of the right to compensation.

Otsego v. New River Hospital District:  What drives a judge to quote classic-rock standards in an opinion?  Read Judge Johnson’s concurrence in this case and decide for yourself.  I can’t decide whether it’s a stellar display of legal principle applying over personal opinion, or just a judge throwing a tantrum after being talked out of legislating from the bench.  The opinion certainly makes clear that launching an appeal when your only argument is “arbitrary and capricious” is normally a fool’s errand.  Where Judge Johnson loses me is that it’s not because of a weak legal standard or drafting problem in the Legislature; it’s the proper separation of powers in government that keeps the courts from playing Monday-morning quarterback with executive and legislative decisions.  In short, it’s a feature, not a bug.  This opinion should immediately go into the curriculum of high-school civics classes throughout the state.

Harmsen v. Minneapolis: Notable for the return of a normal application of the Ridgewood estoppel analysis.  “Normal,” in the sense that affirmative misconduct – malfeasance – is required to prevent the enforcement of otherwise valid law.   Last month, in North Oaks v. Sarpal, a different three-judge panel seemed to throw that requirement overboard when it held that “erroneous government advice” was enough to satisfy the test (or at least was enough to back up a trial court judge who thought so).  It’s not at all clear how “erroneous advice” differs from any other mistake a planning department employee might make, but that’s now the central holding of a published Court of Appeals opinion.  The facts in Harmsen don’t set up a great conflict between the opinions, but it shows that the Sarpal decision needs to be harmonized, somehow, with the Ridgewood-KMart line of cases on wrongful conduct.  If “malfeasance” is not the standard, then the standard effectively becomes “Does the judge blame the city or the owner for the problem?” – especially if the decision is only reviewed for abuse of discretion.


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.

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.

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.

Court of Appeals 04.07.09

Two unpublished decisions today for discussion.  The first resolves a challenge to White Bear Lake’s decision to grant a variance and CUP amendment to an owner in the Marina Triangle.  The opinion does not break new ground in affirming the City’s approval of the applications, other than scoring another point for a highly deferential use of the Mohler three-part variance-approval analysis.   The other is a wrongful-termination case, in which much of the “termination” discussion went away in the appellant’s veteran’s-preference hearing (decided last year).  The remaining allegations of retaliation and defamation are turned away by the Court via summaries of existing law.  The Court does extend Carradine absolute immunity to the members of an ambulance service board – worth filing away for the next time you deal with a hot advisory-board issue (or member).

Court of Appeals 3.24.09

Two cases of interest released today:

– A published decision in Halla Nursery v. Chanhassen reversing a district court order preventing Chanhassen from enforcing its sign ordinance.  The facts are quite unique – most of the decision applies facts to a 1997 judgment between the parties, in place of ordinances.  The opinion eventually comes around to applying “vested rights” doctrine, both to the judgment and to the City’s attempts to enforce its sign ordinance.  In both realms, the Court of Appeals finds no vested rights – the owner is supposed to know the rules that apply to them, even when government officials do not.  This is the latest in a string of recent cases that have reinforced the notion that the government at large will not be held responsible for the mistakes and mis-statements of any of its officials. 

– An unpublished decision in Minnesota Commerical Railway Co. v. Rice Creek Watershed District, which applies the airport-noise (Alevizos) takings standard to water projects – here, whether an RCWD project caused damage to a railway bridge.  The analysis is light as the facts to pin blame on RCWD seem to be in short supply; the railway had a thirty-year gap in their maintenance records for the bridge from the early 70s to just before RCWD installed their project.  The opinion also briefly touches on statutory immunity and the value of a good administrative record.

Today’s Supreme Court Opinions 2.26.09

The Supreme Court released one opinion on land use decisons this morning, The Big Lake Association v. Saint Louis County Planning Commission.  The zoning decision under contest is a PUD approval for a resort property near the BWCA.  Saint Louis County has two categories of PUD for “resorts” which could have applied here – a commercial (the one used) which in theory applies to transient-stay and service-intensive properties; and a residential PUD which applies to properties with longer-stay housing such as cabins or timeshares, and fewer services.  The legal issue at stake before the Court was whether opponents of the plan, who now argue that the proposal should have been reviewed as a residential PUD (where it would fail as presented), sufficiently raised the issue when the County Planning Commission considered the PUD approval.  The Court of Appeals decided that they did not, and held that the issue was waived.  The Supreme Court agreed, finding that separation-of-powers principles prevent the Court from interfering in a quasi-judicial zoning decision if the matters were not raised to the deciding body.  In the recounting of the record within the opinion, it appears that no opponent took the commercial v. residential issue head-on, or even directly referenced the density standards that form the main difference between the two standards.  The Court also went on, in dicta, to decide the underlying reasonableness of the approval, though that issue was not before the court in the first place, and certainly not  after finding the issue waived.

The takeaway from this decision is that there are few “jurisdictional” mistakes a city or zoning board can make.  Opponents of a plan, if they believe the wrong standard is being applied, should be specific at every level about the “right” standard or zoning process a plan should be taking.