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Motion For Reconsideration Of HAWSCT's Opinion In Ala Loop: Are Zoning Statutes "Environmental Laws?"

The State (actually Waiola Waters of Life, the defunct charter school) has asked the Hawaii Supreme Court to reconsider its decision in County of Hawaii v. Ala Loop Homeowners, No. 27707 (July 9, 2010). In that case, the court held "[w]e further conclude that article XI, section 9 of the Hawai'i Constitution creates a private right of action to enforce chapter 205 in the circumstances of this case." Slip op. at 4. 

The State argues:

Wai'ola asks for reconsideration for three reasons. First, the Court has made new law that will significantly affect multiple sectors of our community, all levels of state and county government, and countless administrative and judicial proceedings that are pending in the courts and before state and county land use and environmental regulatory agencies.

Given the present procedural posture of the case, the principle of judicial restraint counsels again addressing the argument the Ala Loop Association and amicus advanced on certiorari, that article XI, section 9 implies a private right of action to enforce "laws relating to environmental quality:"

Here are the motion and the Ala Loop Homeowners' response:

• State's Motion for Reconsideration (filed July 19, 2010)

• Ala Loop Community Association's Response (filed Aug. 4, 2010)

Wisconsin Ct App: Property Owner's "Check" Is Subject To Town's Condemnation "Checkmate"

There are a host of issues in DSG Evergreen v Town of Perry, No. 2009AP727 (Wis. Ct. App. July 22, 2010) (the appellant raised seven grounds for appeal in this condemnation case), but this is the one that caught our eye. The property owner claimed that the town could not condemn its 1.5 acre parcel because it would create a lot that violated the county's minimum lot size for agriculture-exclusive parcels. Under the county land use ordinance, unless an ag parcel fronts a public road, it must be at least 35 acres. See slip op. at 12. The court held that yes, the parcel did fall below the 35-acre minimum size because it did not front a public road, but that it was the property owner who created the problem with it "swapped property with its neighbor after the appraisal." Id. at 13. Thus, the court concluded, the issue the property owner raised was "of its own making." 

We observe that, to the extent that the size of this lot may be a problem, it is plainly a problem of DSG’s own making.  It is undisputed that the 1.5-acre lot at issue did not exist when the Town had the proposed condemnation project appraised.  Shortly thereafter, however, DSG swapped property with a neighbor who owned adjoining land, thereby eliminating the access easement the Town had provided DSG, creating the possibility that if the condemnation project was successful, it would create an illegal 1.5-acre parcel.  The clear evidence is that DSG was fully aware of the property the Town wished to condemn for the Hauge Church project, but swapped the parcel with its neighbor anyway just before negotiations were to commence.  A reasonable inference from this transaction at this time in the condemnation process is that DSG was aware that through this land swap, the condemnation would result in creating a lot that did not comply with the minimum size lot ordinance. The equities of the case call for relief to the Town by not holding the Town to the alleged problem of creating a lot in an agricultural-exclusive zoned area that is less than 35 acres.

Id. The property owner tried to pull a fast one in the court's view, and the eminent domain gods won't be cheated from their due quite so easily.

The court added: "In any event, we agree with the Town that DSG lacks standing to challenge the Town’s creation of a lot of less than 35 acres in violation of Dane County ordinances. It is for Dane County to raise the challenge DSG makes here, not DSG.  DSG does not cite to any part of the Dane County zoning ordinances that permits a private citizen to enforce the minimum lot size ordinance, and we are not aware of such an ordinance." Note that this is likely a different result than would have been reached in Hawaii, since the Hawaii Supreme Court recently held that state land use statutes are "environmental" statutes that may be enforced by private party lawsuits.

The court also rejected the property owner's claim that the town did not prepare an adequate Agricultural Impact Statement. See slip op. at 8-12.

Permit Condition Requiring "Active" Farming Struck Down Under Nollan/Dolan

We rarely post developments from trial courts, but every now and then a trial court order is so interesting that we deviate from our usual rule. Here's one that's worth sharing.

In Sterling v. California Coastal Comm'n, No. CIV. 482448 (Cal. Super. June 18, 2010), the San Mateo County Superior Court (the county immediately south of San Francisco) invalidated a permit condition imposed by the California Coastal Commission that would have required the property owners maintain their property "in active agricultural use," meaning that they "either personally conduct agriculture on all their land or enter into a lease with a third party willing to engage in agricultural use on the land." In other words, forced farming.

You read that right. Did we mention that the family seeking the permit are not farmers or ranchers, that the vast majority of the 143-acre parcel is not prime ag soil, that the property could not be "viably farmed," and that they sought the coastal development permit to build a house?

Read the court's decision for the procedural details, but here are the highlights. The Sterlings purchased a 147-acre parcel in rural San Mateo County zoned Planned Agricultural Development, a designation that permits up to two homes on the parcel. Only 10 acres of that land are considered prime agricultural soil, and no part of the parcel was farmed. A portion of the upland portion was leased to nearby ranchers to graze 10 head of cattle, with no profit to the Sterlings. The Sterlings sought the permission of the County to build a single home and proposed that the grazing of the 10 head of cattle continue. The County unanimously approved, with 32 conditions (none of which are germane here).

The California Coastal Commission, however, would have none of it. It appealed the approval, "to itself." After a more than two-year delay in which the Coastal Commission refused to hold hearings, it approved of the home building plan subject to 11 new conditions and the 32 conditions already imposed by the County. Here's the agricultural use easement condition:

All areas of the Property [except for the 10,00 square foot development area and driveway] shall at all times be maintained in active agricultural use.

the Sterlings must, as permittees, "either personally conduct agriculture on all their land or enter into a lease with a third party willing to engage in agricultural use on the land;"

"[Prior to issuance of the coastal development permit], the applicants [the Sterlings] shall dedicate an agricultural conservation easement to a public agency or private association approved by the [Commission] Executive Director."

the "easement deed shall run with the land in favor of the People of the State of California...and shall be irrevocable."

Slip op. at 4. Rather than accept the permit with the conditions, the Sterlings sought a writ of administrative mandate.

The court concluded that the agricultural easement was a taking because there was no Nollan nexus between the exaction and any reasons that would support denial of the permit, nor was there Dolan "rough proportionality" between the proposed development (less than one acre), and a perpetual easement of 142 acres. 

On the Nollan issue, the court concluded the property was not being used for agriculture, so the Sterlings' home would not interfere with actual agricultural use, only potential agricultural use. Yet, the exaction required actual agricultural use, "rather than simply ensuring agricultural potential." Slip op. at 6.

The court also rejected the Commission's claim on the Dolan issue that the exaction was proportional since the Sterlings already engage in agricultural use (remember those 10 head of cattle?). The court held the grazing was voluntary, and it was not proportional to impose a mandatory requirement to farm or ranch simply because the property owner voluntarily allowed a few cows to graze his land. The court also concluded that the exaction was disproportionate since it virtually wiped out any further development rights in the parcel when compared to the 10-cattle grazing plan. See slip op. at 8.

Finally, the court rejected the Coastal Commission's argument that the easement was justified to protect agriculture:

Protecting agriculture is a valid government goal. But the means chosen here by the CCC to achieve that goal -- imposing the affirmative agricultural easement on the Sterlings -- cannot pass constitutional muster because they are neither (1) clearly nor (2) proportionately connected to the impact of the Sterlings' home. The easement condition is irreconcilable with Nollan, Dolan and the Constitution, and must be set aside. The petition for writ of mandate is granted.

Slip op. at 9.

Florida Court Of Appeal: State Must Pay When It Destroys Healthy Orange Trees

When the state purposely destroys healthy citrus trees as part of a program to address citrus canker, it must pay the owners of the trees just compensation.

In Dep't of Agriculture & Consumer Services v. Borgoff, No. 4D08-4474 (May 12, 2010), the Florida District Court of Appeal (Fourth District) affirmed an $11 million class action jury verdict ordering the Department of Agriculture to pay for the more than 100,000 non-commercial trees it cut down and destroyed in Broward County. The Department's eradication program destroyed any citrus tree within 1,900 feet of any tree found with citrus canker. The court concluded this was a taking: 

Cutting down and destroying healthy noncommercial trees of private citizens could hardly be more definitively a taking. Government has regulatory power for the very purpose of safeguarding the rights of citizens, not for destroying them.

Slip op. at 6 (footnote omitted) (emphasis added). The court first concluded that it would not disturb the jury's determination that healthy citrus trees "are not harmful or destructive, even though found within 1,900 feet of a tree having citrus canker." Slip op. at 3. The Department asserted that its scientific evidence was more convincing, but court held that it was the function of the jury to choose which side's evidence should be accepted. Because"[t]here is evidence in the record that the healthy trees taken under the [eradication program] had continued to produce the fruit, the juice, the shade, the pleasing aromas, the agreeable vistas — all the virtues for which their owners carefully planted and tended them," slip op. at 3, the appeals court would not override the jury's conclusion.

The court also rejected the Department's argument that healthy trees exposed to citrus canker were valueless because they were a nuisance, and will eventually develop canker. "It is apparent from the history of this case that [the Department] destroyed these privately owned healthy trees not because they were really 'imminently dangerous' to anybody but instead to benefit the citrus industry in Florida." Slip op. at 4 (citation omitted). Nuisance is reserved for things that cause imminent "inconvenience or damage" to the public, and the court rejected the Department's claim that the healthy trees were a danger: 

If trees are destroyed not to prevent harm but instead to benefit an industry, it is difficult to understand how [the Department] can argue on appeal that the trees legally constituted a nuisance without any value.

Slip op. at 4. The court also rejected the Department's claim that multi-factored takings tests are applicable instead of a per se physical invasion rule. See slip op. at 5-6. Calling the multi-factored test "recondite," (the opinion does not cite Penn Central, but what else could it be referring to?), the court held: 

Under any possible meaning, if government cuts down and burns private property having value, then government has taken it. And if government has
taken it, government must pay for it.

Slip op. at 6.

Lastly, the court bluntly rejected the Department's claim that the Florida legislature replaced the common law claim for inverse condemnation for destruction of citrus trees with a statutory claim. Slip op. at 6 ("Like most of the arguments of [the Department] in this dispute, it seems to have been made without regard to history, positive law or precedent.").

More about the decision from the Miami Herald: Court upholds $11M citrus canker payout, but Florida vows to appeal. It looks like we have not seen the last of this issue.

Sunday Eminent Domain Round-Up

What we're reading today:

• Curbing abuse of eminent domain - A Denver Post editorial on a new Colorado statute designed to limit the power of the government to declare farmland "blighted" ("The new law says land that has been classified by the county assessor as agricultural land cannot be condemned for urban renewal. However, it makes an exception for agricultural land that is an enclave within cities and has had development around it for at least three years. We will have to see how the law shakes out in the coming years, but that seems to be an awfully big exception. That's exactly the kind of land that usually needs the most protection from government.").

• Court of Appeals eminent domain case set for June - The Columbia Spectator reports that oral argument in the Kaur case is set for June 1, 2010, at 2 pm ET. In that case, the New York Supreme Court, Appellate Division (First Department) struck down the attempted taking of land north of Columbia University in New York City because of the record reflected overwhelming private benefit. Here is the Court of Appeals' oral argument calendar. Our schedule and technology permitting, we will be live blogging the oral arguments like we did for the Atlantic Yards case.

• Book Review: Jeff Benedict's 'Little Pink House:' The Back Story of the Kelo Case - Lawprof George Lefcoe has published a book review of LPH in the Connecticut Law Review, which is posted on SSRN.  

Little Pink House is a fast paced account by Jeff Benedict of the events surrounding the 2005 U.S. Supreme Court decision in Kelo v. City of New London. Along with tracking Benedict’s story line, this review also highlights some of the core legal and policy issues that are an important part of the story for law-trained readers. At the core of the tale is how Kelo and a handful of her neighbors challenged the New London Development Corporation’s (NLDC) use of eminent domain for the economic redevelopment of the Fort Trumbull neighborhood. A libertarian-inspired public interest law firm named the Institute for Justice (IJ) agreed to represent the beleaguered property owners.

Our shorter and much less academic review of Little Pink House is here.

• J. David Breemer, Ripeness Madness: The Expansion of Williamson County's Baseless "State Procedures" Takings Ripenss Requirement to Non-Takings Claims, 41 Urban Lawyer 615 (2009). .  

  In this article, David Breemer critically examines the extension of Williamson County’s state procedures ripeness requirement to claims beyond takings claims. Breemer argues that the extension is improper given the origin and limited scope of the state procedures requirement, precedent establishing critical differences between the standards, injuries and remedies relevant to a takings claim and those applicable to other claims, and precedent allowing multiple causes of action from the same facts. Ultimately, Breemer concludes, the state procedures ripeness requirement must be abandoned because it is doctrinally bankrupt and dysfunctional in practice. In the meantime, courts must cease applying this takings ripeness doctrine to due process and equal protection property claims because there is no authority for this trend, and its amounts to a jurisdictional coup d’état that illegally rescinds 42 U.S.C. § 1983 for property owners.

  ABA members can access the full article pdf here.

Upcoming HAWSCT Oral Arguments: Are State Zoning Laws "Environmental" Statutes?

Update: we confirmed with the Clerk that the arguments are on Tuesday, October 13, 2009, and not on "Thursday" October 13 as noted on the Judiciary web site. We will be live blogging the arguments starting at about 9:45 a.m., Hawaii time.

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On Tuesday, October 13, 2009 at 10:00 a.m., the Hawaii Supreme Court will hear oral arguments in a case considering whether Haw. Rev. Stat. §  205-1 et seq., gives rise to a private right of action. The core issue in the appeal is whether Hawaii's statewide zoning laws are "laws relating to environmental quality" which may be privately enforced, or whether they are classic Euclidean zoning laws which can't. The Hawaii Constitution (art. XI, § 9) provides that "any person may enforce" the "right to a clean and healthful environment, as defined by law relating to environmental quality, including control of pollution and conservation, protection and enhancement of natural resources."

In County of Hawaii v. Ala Loop Homeowners, No. 27707 (cert. granted Sep. 2, 2009) (order here) a "new century charter school" sought to begin operation on land classified (zoned) as agriculture on the island of Hawaii. Such uses are not normally allowed in the Ag zone. The school's neighbors,the Ala Loop Homeowners, asserted the school needed a special permit pursuant to Haw. Rev. Stat. § 205-6, which allows a county planning commission to permit certain "unusual and reasonable uses" within an agricultural or rural district, despite the land not being zoned for such use. The County filed a declaratory action, seeking confirmation the school was exempt under state law from any special permit requirement. The trial court permanently enjoined the school. The Intermediate Court of Appeals reversed:

In Pono v. Molokai Ranch, Ltd., 119 Hawai‘i 164, 194 P.3d 1126 (App. 2008), cert. rejected, 2008 WL 5392320 (Hawai‘i 12/29/08), this court held that private citizens do not have a private right of action to enforce the provisions of HRS Chapter 205 and, therefore, lack standing to invoke a circuit court's jurisdiction to determine their claims to enforce Chapter 205. The enforcement of HRS Chapter 205 is precisely the relief sought by the Association and granted by the Circuit Court in this case.

. . . .

We conclude that the Association did not have a private right of action to enforce their Chapter 205 claims and, therefore, the Circuit Court lacked subject matter jurisdiction over the Association's claims. See Pono, 119 Hawai‘i at 180-90, 194 P.3d at 1142-52; see also Lanai Co., Inc. v. Land Use Comm'n, 105 Hawai‘i 296, 97 P.3d 372 (2004) (HRS § 205-12 authorizes the counties, not the LUC to enforce Chapter 205); accord Rees v. Carlisle 113 Hawai‘i 446, 153 P.3d 1131 (2007) (circuit court lacked jurisdiction because the subject ordinance did not create a private right of action).

The ICA's summary disposition order is here.

Here are the cert application and the State's opposition, and two amicus briefs supporting the applicant:

• Application for writ of certiorari
  

• State of Hawaii's Opposition

• Amicus brief of Native Hawaiian Legal Corporation

• Amicus brief of Hawaii's Thousand Friends

The case relied upon by the ICA, Pono v. Molokai Ranch, Ltd., 119 Haw. 164, 194 P.3d 1126 (Haw. Ct. App. 2008), cert. rejected, 2008 WL 5392320 (Haw. Dec. 29, 2008), was rejected for review after the plaintiff made many of the same arguments. We represented Molokai Ranch in that case, and filed this brief in opposition to the application for writ of certiorari, which explained why chapter 205 is a zoning law, and not a "law relating to environmental quality" and why a statute which allows fee-shifting in cases seeking injunctive relief for failure to obtain a permit was not a legislative recognition of a private right of action.

The Judiciary web site summarizes the issues in the oral arguments:

Petitioner Ala Loop Community Association (Ala Loop) filed an application for writ of certiorari requesting that this court review the judgment of the Intermediate Court of Appeals (ICA). The ICA, citing Pono v. Molokai Ranch, Ltd., 119 Hawaiʻi 164, 194 P.3d 1126 (App. 2008), cert. rejected, 2008 WL 5392320 (Hawaiʻi Dec. 29, 2008), concluded that Ala Loop did not have a private right of action to enforce its Hawaiʻi Revised Statutes (HRS) chapter 205 claims against Respondent Waiʻola Waters of Life Charter School, and therefore, the Circuit Court of the Third Circuit lacked jurisdiction over those claims. Ala Loop contends that the ICA erred because, inter alia, it failed to consider Article XI, Section 9 of the Hawaiʻi State Constitution and HRS § 607-25 (Supp. 2002).

Details of the argument schedule are posted here (as noted above, the site lists the arguments as being held on "Thursday" October 13, but that is confirmed to be a typo).

Requesting cert review by the Hawaii Supreme Court of an ICA decision is a bit different than asking the U.S. Supreme Court to take your case. Like that process, the Hawaii procedure asks the court for discretionary review, but it is not called a "petition" but an "application," and the application is either "rejected," "dismissed," or "accepted" under the standards established by Haw. Rev. Stat. § 602-59. Unless the court orders additional briefing, none is submitted, and the decision is made by review of the record, the briefs filed in the ICA, the ICA's decision, the application briefs, and oral arguments.

The procedures and the short time frame make it difficult for amici to participate meaningfully in these cases, which by their nature are cases of public importance. Amici have little time after an application is filed to muster support or opposition, so almost must know ahead of a filing whether a decision is certworthy and that an application is forthcoming. In other words, you really need to have your fingers on the pulse in order to get full briefing to the court.

Materials And Links From Today's Water Law Seminar

To those who attended today's seminar "Integrating Water Law and Land Use Planning," thank you.  The materials from my session on "Water Rights, Property Rights and the Law of Settled Expectations" are below. 

• Kaiser Aetna v. United States, 444 U.S. 164 (1979) - the Hawaii Kai Marina case - physical invasions, regulatory takings, and interference with settled expectations.

• Haw. Const. art. XI, § 7  (the declaration of public trust).

• Hawaii's Takings Clause.

• U.S. Constitution, amend. V (federal takings clause).

• U.S Constitution amend. XIV (federal due process clause).

• 42 U.S.C § 1983 (federal civil rights statute).

• 42 U.S.C § 1988 (prevailing party attorney's fees statute).

• Maui Tomorrow v. State of Hawaii, 110 Haw. 234, 131 P.3d 517 (2006) - Hawaii water law is not a federal case.  Summary of the decision here.
  

• The State zoning law, Haw. Rev. Stat. ch. 205.

• The Hawaii State Planning Act, Haw. Rev. Stat. ch. 226.

• The Hawaii Water Code, Haw. Rev. Stat. ch. 174C.

• Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), the case in which the U.S. Supreme Court first upheld the segregation of land uses in an Ohio suburban town into districts against a substantive due process challenge. Law students study the case, land use lawyers and planners know it intimately, and "Euclidean" zoning has become the shorthand for district-based single use zoning.

• Hadachek v. Sebastian, 239 U.S. 394 (1915) - the government's police powers can be used to protect against nuisances.

• Joseph L. Sax, The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471 (1970).  Copy available here.  

• In re Water Use Permit Applications (Waiahole), 94 Haw. 97, 9 P.3d 409 (2000) (the mother of all Hawaii water law cases -- the decision so vast it required its own table of contents)

• In re Waiola O Molokai, Inc., 103 Haw. 401, 83 P.2d 664 (2004) (burdens of proof).

• State and local government agencies have public trust duties - Kelly v. 1250 Oceanside Partners, 111 Haw. 205, 140 P.3d 985 (2006).

• A counterpoint to Waihole: David L. Callies & Calvert G. Chipchase, Water Regulation, Land Use and the Environment, 30 U. Haw. L. Rev. 49 (2007).  Copy posted here.

• Hawaii vested rights: Arrow of Time - Vested Rights, Zoning Estoppel, and Development Agreements in Hawaii - 2006 U. Hawaii Law Review article. Drop me an email, and I will email you a pdf, or send you a hard copy (tell me which).

• Upsetting settled expectations in shoreline law - accretion and erosion: Maunalua Bay Beach Ohana 28 v. State of Hawaii, No. 28175 (Haw. ICA) - here's the brief we filed which illustrates the principle that the legislature (or a court) cannot simply change the settled law without raising takings concerns. The issue in that case is whether the state or littoral landowners are entitled to ownership of accreted land. In "Act 73," the legislature declared that shoreline land naturally accreted belongs to the State of Hawaii and is public property.  The act overturned the age-old rule of shoreline accretion and erosion, which held that beachfront owners lose ownership of land when it erodes, but gain it when it accretes.  Instead of these balanced rules, Act 73 made the erosion/accretion equation one-sided: the State wins every time. 

• Compensation for regulatory taking of water rights - Casitas Municipal Water District v. United States, No. 2007-5153 (Mar. 3, 2009).

Federal Circuit: Eggonomic Impact Not Eggregious Enough To Require Feds To Shell Out Compensation

Okay, we've decided to surrender to temptation and let fly with bad (and obvious) egg puns. But at least they're out of our system in the beginning. After that, no more yolks. We promise.

In Rose Acre Farms, Inc. v. United States, No. 2007-5169 (Mar. 12, 2009), the U.S. Court of Appeals for the Federal Circuit held that a regulation restricting the sale of eggs was not a taking under Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), because the economic impact of the regulation "was not severe" and the character of the government action "strongly favored" the government.

Rose Acre Farms owns egg-laying chickens.  A lot of them: "eight layer-hen farms with millions of hens." The USDA first promulgated temporary, then final regulations that restricted the interstate sale and transportation of eggs determined to be contaminated with salmonella. After illness outbreaks were traced to three of Rose Acre's farms, the company was forced to sell its eggs from these farms as "breaker eggs" (pasteurized eggs used in products such as cake mixes), instead of table eggs. Breaker eggs have about a 10% lower value. Approximately 43% of Rose Acre's table eggs were used as breaker eggs.

After its legal challenge to the validity of the regulations was upheld by the Seventh Circuit, Rose Acre sought just compensation in the Court of Federal Claims. The first trial resulted in an award of $6.1 million for a categorical taking plus $2.5 million in attorneys fees and costs, but the Federal Circuit disagreed with the applicable legal standard, and sent the case back for further consideration of the Penn Central factors.  The Penn Central test applies three factors:

The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. See Goldblatt v. Hempstead, supra, at 594. So, too, is the character of the governmental action.

Penn Central, 438 U.S. at 124.  After a second trial in which the testimony mostly consisted of expert witnesses (or should that be eggsperts? - sorry, couldn't resist), regarding economic impact, the CFC determined that Rose Acre would suffer a diminution in profit of 219%, held the character of the government action favored the USDA, and did not reconsider its earlier decision on Rose Acre's investment-backed expectations.  Weighing these factors anew, the CFC awarded $5.4 million in compensation, plus attorneys fees and costs.

The Federal Circuit held that "there was, and still is, little dispute about the underlying economic data to be used in assessing the economic impact," but that the disagreement arose over how to analyze the data, slip op at. 13, because "the same data appear to provide vastly differing depiction as to the severity of the economic damage incurred by Rose Acre, depending on whether one looks as lost profits or lost values." Id. at 15. After identifying the relevant property as the 135 million dozen eggs Rose Farms produced on the three affected farms overall (and not the value of the farms as going concerns), the court chose diminution in value.  The court explained:

The trial court’s analysis suffers as a result of limited guidance on the profits-based measure, as the court did not compare the 219% diminution in return to anything, such as some benchmark standard. Instead, the court simply viewed the number as indicative of a severe economic impact. This examination is flawed because it does not set any baseline or standard to which to compare an inherently relative number. And, as Dr. Reiff [a testifying expert] explained, comparing diminution in return in one case to diminution in value in another case "doesn't mean much." The dearth of comparable diminution-in-return numbers in the case law may have been the root of the trial court’s cursory analysis, but comparable numbers seem necessary to assess whether the lost profits represent a severe impact.

Slip op. at 15-16. The court continued:

Because the parcel of property is now clearly defined as the diverted eggs themselves, we are convinced that it was clear error to place sole reliance on the diminution in return metric. The eggs are a discrete asset, the market value of which is readily ascertainable. Indeed, as mentioned above, the parties do not materially dispute the average market value of the eggs in the table market versus the breaker during the regulated period. These data provide a clear picture of the decrease in value of the eggs.

Instead, when we consider all three offered metrics of economic impact, with the primary weight given to the diminution in value, we conclude the trial court clearly erred in determining that Rose Acre suffered a severe economic impact due to the SE regulations. Rose Acre points to no case in which a court has found a diminution in value of 10% as being severe or as favoring a taking. Additionally, the infirmities in the diminution in return metric, as discussed above, warrant against placing much, if any, weight on that calculation on the facts of this case. We hold therefore that, although the monetary loss to Rose Acre was not insignificant, it did not even approach the level of severe economic harm and thus does not strongly favor Rose Acre.

Slip op. at 27-28 (footnote omitted).

On the "character of the government action" Penn Central factor, the court held that Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) "changed the takings landscape" and that a court can "no longer ask whether the means chosen by the government advance the ends or whether the regulation chosen is effective in curing the alleged ill."  Slip op. at 33. Those questions are reserved for a due process inquiry, which Rose Acre had litigated and lost in the Seventh Circuit. The court held that under the character prong, a court may only look at "'the actual burden imposed on property rights, or how that burden is allocated.'" Slip op. at 34 (quoting Lingle, 544 U.S. at 543).  Because the USDA rules applied to most egg producers nationwide and did not single out Rose Acre, and because the purpose of the regulations was to protect food safety, the character factor tipped in the government's favor.

The court concluded no taking occurred:

When we review all the factual findings above, we conclude that they require a holding of no compensable taking. First, Rose Acre’s economic impact is not severe. Second, although the reasonable investment-backed expectations favor Rose Acre, they are not strong enough to be dispositive. Third, the character of the government’s regulations strongly favors a non-taking.

. . . .

Although Rose Acre may feel otherwise, the law of regulatory takings does not generally compensate property owners when a regulation’s economic impact is slight and temporary but the potential for physical harm to the public is significant. Here, infected eggs could have caused serious illness and possibly even death.

Slip op. at 43-44. Rose Farms' litigation with the federal government started in 1990 which resulted today 19 years, two federal trials, and three appeals later, with a finding of no liability. We hope that Rose Farm didn't and spend the millions in compensation and attorneys fees it was awarded by the CFC. That would have been counting its chickens before they were hatched.  One last bad pun to see if you read this long post to the end.

New York Court Of Appeals: No Need For A Comprehensive Taking Plan

In a brief memorandum opinion, the New York Court of Appeals (the state's highest court) today affirmed the Appellate Division's decision in Aspen Creek Estates, Ltd. v. Town of Brookhaven, a case challenging a municipality's ability to take property for farmland preservation. The court held: 

Petitioner contends that the United States Supreme Court's decision in Kelo v City of New London (545 US 469 [2005]), which dealt with takings for purposes of economic development, requires a preexisting farmland preservation plan to justify the taking of its property as a public use within the meaning of the Fifth Amendment (see US Const Amend V ["nor shall private property be taken for public use, without just compensation"]). We need not, and do not, reach the issue whether petitioner's interpretation of Kelo is correct, since the challenged taking was constitutionally proper even assuming that a preexisting farmland preservation plan was necessary. Petitioner's property was taken pursuant to a legislatively declared public policy in favor of farmland preservation and as part of the Town of Brookhaven's master plans endorsing farmland preservation. In furtherance of these plans, Town voters passed three bond acts providing $130 million to acquire development rights or fee interests in undeveloped land in the Town; among the areas specifically designated for preservation was the 500-acre tract of farmland in which petitioner's parcel is located.

In short, the public benefits of the taking in this case were not incidental or pretextual in comparison with benefits to particular, favored private entities; petitioner's remaining arguments likewise lack merit. Finally, the parties have not argued, and we do not decide, whether the New York Constitution (see NY Const, art I, § 7[a]) imposes a more stringent standard for takings than does the Fifth Amendment as interpreted by Kelo.

The Appellate Division's opinion approved a taking of private property to preserve it as farmland.  The court's majority held that the goal of preserving farmland generally qualifies as a public use/purpose, and that there was no evidence of pretext in the record demonstrating that the presumption of public use should be questioned, even though the property owner asserted that the land would eventually be leased or sold to another private owner.

The property owner also asserted that because the taking was not part of a plan, it did not deserve judicial deference.  Recall that in Kelo v. City of New London, 545 U.S. 469 (2005), the majority took great pains to establish that the taking of Mrs. Kelo's house was part of a "'carefully considered' development plan," and was therefore entitled to judicial deference.  Kelo reviewed the decision to take property by eminent domain in much the same fashion that the courts review police power zoning decisions under due process analysis: courts wash their hands for the most part as long as the zoning is enacted "in accordance with a comprehensive plan."  This aspect of the Kelo decision has received some attention, but little traction so far.  See, e.g., MiPro Homes, L.L.C. v. Mount Laurel Township, 878 A.2d 38 (N.J. Super. 2005), aff'd 910 A.2d 617 (N.J.) (per curiam), cert. denied, ___ U.S. ___ (2007); Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006). 

Neither the Appellate Division nor the Court of Appeals, however, was bothered at all by the utter lack of a formal (or even an informal) plan, Kelo's "carefully considered" language notwithstanding.  The Appellate Division simply implied one:

In any event, while it does not appear from the record that the precise boundaries of the Manorville Farmland Protection Area [the alleged "plan"] have been carefully considered by the Town, it is clear from the comments made by various speakers at the hearing that the desirability of preserving farmland in Manorville has indeed been recognized by civic associations and public officials.  A plan prepared by the Manorville Taxpayers Association in 1993 set preservation of the remaining farms in the hamlet as a goal. . . .

Slip op. at 6.  So let's see if I get this straight. There was no plan to preserve farmland, but since someone "commented" at a public hearing that preserving farmland is desirable, and because a vague "legislative policy" exists "in favor of farmland preservation," the court is free to imply that a plan not only exists, but that it is "carefully considered" and therefore due judicial deference?  Is is highly doubtful that a plan by civic groups gleaned from comments at a public hearing, or broad aspirational policy statements are the kind of comprehensive action the majority had in mind in Kelo.  The fact that a condemnation takes place within the context of a comprehensive plan is, in theory, designed to give the courts confidence in the result, but if an action takes place without a plan, courts should be more willing to give it a hard look, as in cases of "spot zoning," for example. 

A second point is also spurred by the above quote.  If the implied plan to take property to preserve farmland has been in existence since 1993, then the just compensation awarded to the property owner should take into account the rise in value from that date to the time of the taking, since the so-called "plan" has blighted the property since 1993.

The Court of Appeals' memorandum decision and the Appellate Division's opinion are squarely at odds with a decision by the Pennsylvania Supreme Court in Middletown Township v. The Lands of Josef Seegar Stone, No 64 MAP 2006 (Dec. 28, 2007), a decision we analyzed here. In that case, the court struck down an attempted taking of property for farmland because it was a pretext to hide the "true purpose" of the taking for recreational purposes. Aspen Creek is also at odds with the recent decision from a California Court of Appeal in City of Stockton v. Marina Towers LLC, No. C054495 (Feb. 13, 2008), where the court held that the city's resolution of necessity was so "nondescript [and] amorphous," and "so vague, uncertain and sweeping in scope that it failed to specific the 'public use' for City sought acquisition of the property."

2008 Land Use In Review: Environmental Law

We aren't officially an "environmental law" blog, and when we do cover the issue, it is mostly on the periphery.  However, in 2008, we hit a couple of significant issues that had some relevance to land use law. 

First, in the U.S. Supreme Court's first decision of the Term, Winter v. Natural Resources Defense Council, Inc., No. 07-1239 (Nov. 12, 2008), the Court held that prior to issuing preliminary injunctions preventing the Navy from training with mid-frequency active sonar, the lower courts must balance the equities and the public interest, and that the Navy's interest in training for deployment clearly outweighed the environmental concerns of the plaintiffs.  Why did a land use law blog care about a case involving the Navy's use of sonar in training exercises off the California coast?  First, as we explained here, the case is philosophically interesting because of the arguments regarding when courts should defer to the judgment of the executive branch and the military. Second, we filed an amicus brief in the case on behalf of nine retired Admirals and several service support groups (posted here), supporting the Navy's arguments. My Damon Key colleague Mark Murakami and I even published an op-ed in the Honolulu Advertiser about the decision.

Second, in Nuuanu Valley Ass'n v. City & County of Honolulu, No. 28599 (Oct. 24, 2008), the Supreme Court of Hawaii clarified when a project that is not being built on state or county land meets the definition of "use" of such lands triggering review under the Hawaii Environmental Policy Act, Haw. Rev. Stat. ch. 343. The developer of private residential land in urban Honolulu sought to subdivide the property, which required hooking up new drainage system to existing lines. The court held that the connection of new drainage lines to an existing system did not meet the definition of "use" of state or county land, even though the existing system is public. More here.

Finally, the Hawaii Intermediate Court of Appeals, in Ohana Pale Ke Ao v. Board of Agriculture, State of Hawaii, No. 27855 (May 21, 2008), held that the State Board of Agriculture was required to undertake an Environmental Assessment under Hawaii state law prior to approving a permit for the importation of genetically-modified algae for processing in facility on state-owned land at which non GMO algae was already being processed.  More here.

Hawaii Agriculture at Risk: Water Law and Land Use

In theory, Hawaii reveres agriculture: pre-western contact Hawaii was primarily an agrarian society, many of us trace our family's history to the post-contact "plantation days," and today, even environmental groups proclaim they support farmers and ranchers and want to "keep the country country."  Who among us of a certain age didn't work in the cannery or the fields during summer break, or doesn't miss Arakawa's? The state Constitution even, in article XI, section 3, expressly protects farming and ranching by commanding the State to “conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands.”

But often the theory of agriculture runs headlong into the reality. For example, agricultural uses may be prohibited on ag land, an interisland ferry by which farmers can transport their goods to market is shut down by the courts due to environmental worries, and most critically, Hawaii's unique and byzantine maze of water law, which seems to give lesser standing to ag uses than other uses, threatens the water supply. In these and other situations, farmers and ranchers turned to the legislature, which enacted, for example, the Hawaii Right to Farm Act, which prohibits most nuisance lawsuits against "farm operations," and Act 5, which voids new private deed covenants restricting agricultural uses of ag land.

Thanks to Hawaii House Blog (the blog of the majority in the Hawaii House of Representatives) for posting "The Rodney Dangerfield of the Economy" summarizing a recent joint meeting of the House Committees on Agriculture and Water and Land & Ocean Resources where local farmers and ranchers briefed lawmakers on the state of Hawaii agriculture, the troubling times they face, and the need for balance in the law. [Disclosure: I am general counsel for Hawaii Farm Bureau Federation, and represent HFBF in the East Maui water case mentioned in the post].

One place to start: clarify that ag uses of land and water have constitutional status, and should be treated at least on par with other uses, not (as they currently seem to be) as mere commercial uses, undeserving of equal consideration. 

Best Plaintiff Group Name: Association of Irritated Residents

An opinion today from the California Fifth District Court of Appeals: Association of Irritated Residents v. San Joaquin Valley Unified Air Pollution Control Dist., No. F03956 (Nov. 11, 2008). The case involves whether a local air pollution control agency must "actively" assess the impacts of agriculture "volatile organic compounds" (aka cow waste) before adopting air pollution control rules.  The court held that it must.

But what really grabbed me was the plaintiff: "Association of Irritated Residents."  (Oh, I get it: "AIR").  Reminds me of those catchy names plaintiff's groups often use (see, e.g., United States v. SCRAP (Students Challenging Regulatory Agency Procedures), 412 U.S. 669 (1972)), and the cheeky acronyms that float around the land use arena to describe motivation (e.g., NIMBY), which we discussed in this post.

But I think "Association of Irritated Residents" is the best. Pretty much one-size-fits-all.

Kauai Springs Update: Civil Rights Case, Kauai Planning Commission Appeals

The latest on the Kauai Springs cases. In the civil rights case, we've filed a motion for Kauai Springs seeking summary judgment on the substantive due process, permit approval, and 42 U.S.C. § 1983 claims. Download a copy here. The exhibits to the motion (available separately here) include the court's earlier Findings of Fact and Conclusions of Law in the related administrative appeal in which Kauai Springs prevailed in August 2008. Hearing is set for December 10, 2008 in the fifth circuit court.

Also, on October 22, the County of Kauai Planning Commission appealed the final judgment in the administrative appeal to the Hawaii Intermediate Court of Appeals. The circuit court's findings which the Planning Commission is appealing are posted here. More to follow once the briefs are filed.

For more information about these two related cases, here are some links to earlier media coverage:

• "Kauai Springs wins lawsuit against Planning Commission" (The Garden Island, Aug. 20, 2008)

• A May 2006 story about the case from the Honolulu Star-Bulletin

• A story from the Kauai newspaper about the TRO that halted the County's attempt to shut the business down while the appeal was being considered.

• Another story about the preliminary injunction that allowed Kauai Springs to stay open.

• "Kauai Springs: Still Open for Business" from Hawaii Reporter.

HAWICA: No Private Right of Action to Enforce Land Use Laws

In a lengthy opinion, the Hawaii Intermediate Court of Appeals in Pono v. Molokai Ranch, Ltd., No. 28359 (Oct. 21, 2008), held that the State Land Use Law, Haw. Rev. Stat. ch. 205, does not create a private right of action allowing for non-governmental enforcement of the law.  The court also held there is no private right of action to enforce the Molokai Community Plan. 

Judge Foley concurred, and would have held that the plaintiff did not exhaust its administrative remedies because it did not appeal the Public Works Director's decision to the Board of Variances and Appeals.

Disclosure: my Damon Key colleagues Greg Kugle and Ken Kupchak represented Molokai Ranch.

More to follow after a chance to digest the opinion. 

Hawaii Farm Bureau Federation: Materials From Friday's Discussion

Here are the materials from today's discussion:

• a summary of Hawaii's "buffer bill" -- printable 1-page pdf here.

• text of the buffer bill

• a short article summarizing Hawaii's Right to Farm Act from Hawaii Agriculture magazine

• the Hawaii Right to Farm Act

• an article about Act 5, and ag-restrictive deed covenants (CC&R's)

• official text of Act 5

• the "GMO algae" case from the Hawaii Intermediate Court of Appeals

Hawaii's "Buffer Bill"

Farmers and ranchers should be aware of a new law passed by the Legislature last session that adds another layer of protection for Hawaii agriculture.

A new section was added to the Land Use Law (chapter 205) requiring that before the State Land Use Commission approves a petition for a “boundary amendment” (a change in the state’s land use designation for a parcel), for lands “contiguous or adjacent to” land designated agricultural, it must include two conditions.

First, the conditions must prohibit any action that would interfere with or “restrain” farming operations, as long as those farming operations are consistent with generally accepted agricultural and management practices. This requirement mirrors the language in Hawaii’s Right to Farm Act, which prohibits nuisance lawsuits against farmers and ranchers who employ generally accepted practices. In other words, farmers and ranchers determine what are the best agricultural and management practices.

“Farming operation” is also defined by reference to the Right to Farm Act, which defines the term broadly to include agriculture, aquaculture, and ranching operations, among others. Also included are accessory uses such roadside stands, fertilizer application, and labor operations.

Second, all prospective developers or purchasers of the land must be notified about the requirements of the Right to Farm act, and that notice must be included in any real estate disclosures.

The intent behind the new law is to prevent farmers and ranchers from having to absorb all of the impacts when non-agricultural interests move next to or near land designated for agricultural uses. Previously, when non-agricultural interests moved next to a farm, for example, the farmer may have been called upon to establish a buffer on his land to protect his new neighbor from things such as spray drift or other common agricultural practices.

The new law makes it necessary to take the farmer into consideration, and to provide notice to all involved, in order to foster discussion and prevent farmers and ranchers from having to bear the entire burden of encroaching urban uses.

Download this article as a 1-page pdf here.

Victory in Kauai Springs Zoning Permit Appeal

Yesterday, the Kauai circuit court granted a permanent injunction, and ordered that Kauai Springs's applications for three zoning permits should not have been denied by the Kauai Planning Commission in January 2007.  The case is an appeal from an agency decision under the Hawaii Administrative Procedures Act (a procedure known in other jurisdictions as a petition for a writ of administrative mandate or a petition for a writ of mandamus).

As reported in today's Garden Island:

In a legal victory that was described by its attorney as a “total home run,” the Kaua‘i Springs bottled water company was granted three permits by 5th Circuit Judge Kathleen Watanabe yesterday in a strong rebuke of obstacles put up by the Kaua‘i County Planning Commission.

Kaua‘i Springs owner Jim Satterfield, who attended the proceeding with some 10 family members, said that he was almost “moved to tears” by the decision and categorized it as a “huge success.”

Watanabe, who said she was happy that Satterfield was in the courtroom to witness her ruling, decided the Planning Commission had “exceeded its jurisdiction” and was “clearly erroneous” in originally denying the Class IV, zoning and special permits to the company last year.

. . .

Ever since the injunction was granted, allowing the company to stay in business while the merits of the case were being hashed out, Kaua‘i Springs was “operating under a cloud,” said attorney Robert Thomas of Honolulu firm Damon Key Leong Kupchak Hastert.

Read the entire TGI story here.  The briefs in the case and past news stories are posted here.

Yesterday, the Kauai circuit court granted a permanent injunction, and ordered that Kauai Springs's applications for three zoning permits should not have been denied by the Kauai Planning Commission in January 2007.  The case is an appeal from an agency decision under the Hawaii Administrative Procedures Act (a procedure known in other jurisdictions as a petition for a writ of administrative mandate or a petition for a writ of mandamus).

As reported in today's Garden Island:

In a legal victory that was described by its attorney as a “total home run,” the Kaua‘i Springs bottled water company was granted three permits by 5th Circuit Judge Kathleen Watanabe yesterday in a strong rebuke of obstacles put up by the Kaua‘i County Planning Commission.

Kaua‘i Springs owner Jim Satterfield, who attended the proceeding with some 10 family members, said that he was almost “moved to tears” by the decision and categorized it as a “huge success.”

Watanabe, who said she was happy that Satterfield was in the courtroom to witness her ruling, decided the Planning Commission had “exceeded its jurisdiction” and was “clearly erroneous” in originally denying the Class IV, zoning and special permits to the company last year.

. . .

Ever since the injunction was granted, allowing the company to stay in business while the merits of the case were being hashed out, Kaua‘i Springs was “operating under a cloud,” said attorney Robert Thomas of Honolulu firm Damon Key Leong Kupchak Hastert.

Read the entire TGI story here.  The briefs in the case and past news stories are posted here.

Op-Ed on GMO Algae Case

Check out Jay Fidell's op-ed in the Honolulu Advertiser, "Appeals court decision threatens our biotech sector" about the recent Intermediate Court of Appeals decision in Ohana Pale Ke Ao v. Bd. of Agriculture, State of Hawaii, No. 27855 (May 21, 2008). 

In that case, the ICA held that the state must complete an environmental assessment (EA) prior to approving a permit allowing the importation of genetically engineered algae.  Jay writes:

The case involves a permit for importation of a genetically engineered algae, a choice target of environmental activists. But the court decision is not limited to genetically modified organisms: It covers all animal and plant organisms, GMO and otherwise. And it doesn't affect just permit applications — it also affects permits already granted for organisms already in the state. Agricultural research and cultivation also will undoubtedly be affected. Hard cases make bad law.

The retroactive nature of the decision reminds us of the Superferry. There, the applicant did everything the Department of Transportation asked for and got its approval. Then, years later, the court imposed additional requirements. How different is that from what happened here? The applicant here did everything Agriculture asked for and got its permit. Then, years later, the court imposed additional requirements. How can you rely on what government tells you? How can you do a business plan? How can you get investors?

Our summary of the decision here. 

Kauai Springs Zoning Permit Appeal: Reply Brief

Yesterday, we filed the Reply Brief in Kauai Springs' appeal from the January 2007 decision by the Kauai Planning Commission to deny three zoning permits to the small, Kauai-family-owned water bottling company.

For more information about the case, here are some links to earlier media coverage:

• A May 2006 story about the case from the Honolulu Star-Bulletin

• A story from the Kauai newspaper about the TRO that halted the County's attempt to shut the business down while the appeal was being considered.

• Another story about the preliminary injunction that allowed Kauai Springs to stay open.

• "Kauai Springs: Still Open for Business" from Hawaii Reporter.

The Opening Brief is posted here.  The Kauai Planning Commission's Answering Brief is posted here.

HAWICA: EA Required For Importation of GMO Algae

The Hawaii Intermediate Court of appeals has issued an opinion in Ohana Pale Ke Ao v. Board of Agriculture, State of Hawaii, No. 27855 (May 21, 2008).  The court ruled on two issues related to the importation of genetically-modified algae into Hawaii by the tenant of a State-owned facility on the Big Island of Hawaii:

This appeal presents two issues: (1) whether the Board was required to comply with the Hawaii Environmental Policy Act (HEPA), Hawaii Revised Statutes (HRS) chapter 343, before approving a permit to import genetically engineered (GE) algae for production in a facility on state lands; and if so, (2) whether two prior environmental impact statements (EISs) prepared for the state lands where production of the GE algae is planned satisfied the Board's HEPA obligations.

Slip op. at 1-2.  I attended the oral arguments and blogged about the issues in the case here.

The ICA held the Board should have required an EA. The court rejected the Board's argument that the permit procedures in Haw. Rev. Stat. ch. 150A, which were enacted after chapter 343 and contain a detailed process for the importation of microorganisms worked an implied repeal of the EA requirement.  The court held that the plan to grow the organisms at the state facility is "an action that proposes the use of state land," slip op. at 13, and therefore "HRS § 343-5 plainly and unambiguously required the preparation of an EA before the Board could approve [the] application."  Id.  The court held that although chapters 343 and 150A may "overlap in their application and purpose, they do not conflict and both can be given effect."  Id. at 16.

On the second issue, the ICA held the two earlier EISs did not satisfy the Board's obligations:

The two EISs, which were prepared more than three and two decades ago, respectively, confirm that the NELH and HOST parks were still conceptual or in their infancy stages when the EISs were prepared.  It is clear from the EIS that as the nature and details of individual projects to be conducted at either park became known, further HEPA review was expected. 

Slip op. at 21.  The ICA did not address how this holding squares with section 343-5's requirement that the EA be accomplished at "the earliest practical time."  The Hawaii Supreme Court addressed this requirement in the "Koa Ridge" case.  Sierra Club v. State of Hawaii Office of Planning, 109 Haw. 411, 126 P.3d 1089 (Jan. 27, 2006). 

Kauai Springs Zoning Permit Appeal

Today we filed the Opening Brief in Kauai Springs' appeal from the January 2007 decision by the Kauai Planning Commission to deny three zoning permits to the small, Kauai-family-owned water bottling company.

The case is an appeal from an agency decision under the Hawaii Administrative Procedures Act (a procedure known in other jurisdictions as a petition for a writ of administrative mandate or a petition for a writ of mandamus).  I won't go into the details of the case in this post, since the brief spells out the facts and the arguments in support.   

For more information about the case, here are some links to earlier media coverage:

• A May 2006 story about the case from the Honolulu Star-Bulletin

• A story from the Kauai newspaper about the TRO that halted the County's attempt to shut the business down while the appeal was being considered.

• Another story about the preliminary injunction that allowed Kauai Springs to stay open.

• "Kauai Springs: Still Open for Business" from Hawaii Reporter.

The Opening Brief is posted here (2.5mb pdf).

Comprehensive Eminent Domain Plan: If You Don't Have One, The Court Will Make One Up

In Aspen Creek Estates, Ltd. v. Town of Brookhaven, 2007 NY Slip Op 09583 (Dec. 4, 2007), the Appellate Division of the New York Supreme Court approved a taking of private property to preserve it as farmland.  The court's majority held that the goal of preserving farmland generally qualifies as a public use/purpose, and that there was no evidence of pretext in the record demonstrating that the presumption of public use should be questioned, even though the property owner asserted that the land would eventually be leased or sold to another private owner.  The facts of the case are set out in the opinion, and by Professor Patty Salkin in her analysis of the decision, so I won't repeat them in detail here.  Two points, however, merit discussion.

First, the property owner asserted that because the taking was not part of a plan, it did not deserve judicial deference.  Recall that in  Kelo v. City of New London, 545 U.S. 469 (2005), the majority took great pains to establish that the taking of Mrs. Kelo's house was part of a "'carefully considered' development plan," and was therefore entitled to judicial deference.  Kelo reviewed the decision to take property by eminent domain in much the same fashion that the courts review police power zoning decisions under due process analysis: courts wash their hands for the most part as long as the zoning is enacted "in accordance with a comprehensive plan."  This aspect of the Kelo decision has received some attention, but little traction so far.  See, e.g., MiPro Homes, L.L.C. v. Mount Laurel Township, 878 A.2d 38 (N.J. Super. 2005), aff'd 910 A.2d 617 (N.J.) (per curiam), cert. denied, ___ U.S. ___ (2007); Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006). 

The Aspen Creek court wasn't bothered at all by the utter lack of a formal (or even an informal) plan, Kelo's "carefully considered" language notwithstanding.  The court simply implied one:

In any event, while it does not appear from the record that the precise boundaries of the Manorville Farmland Protection Area [the alleged "plan"] have been carefully considered by the Town, it is clear from the comments made by various speakers at the hearing that the desirability of preserving farmland in Manorville has indeed been recognized by civic associations and public officials.  A plan prepared by the Manorville Taxpayers Association in 1993 set preservation of the remaining farms in the hamlet as a goal. . . .

Slip op. at 6.  So let's see if I get this straight.  There was no plan to preserve farmland, but since someone "commented" at a public hearing that preserving farmland is desirable, the court is free to imply that a plan not only exists, but that it is "carefully considered" and therefore due judicial deference?  Is is highly doubtful that a plan by civic groups gleaned from comments at a public hearing is the kind of comprehensive action the majority had in mind in Kelo.  The fact that a condemnation takes place within the context of a comprehensive plan is, in theory, designed to give the courts confidence in the result, but if an action takes place without a plan, courts should be more willing to give it a hard look, as in cases of "spot zoning," for example. 

The second point is also spurred by the above quote.  If the plan to take property to preserve farmland has been in existence since 1993, then the just compensation awarded to the property owner should take into account the rise in value from that date to the time of the taking, since the so-called "plan" has blighted the property since 1993.

ICA Oral Arguments in GMO Algae / EA Appeal

I sat in on today's oral arguments in the Hawaii Intermediate Court of Appeals (the nondiscretionary appeals court of first resort) in an interesting case, Ohana Pale Ke Ao v. Bd. of Agriculture, State of Hawaii, No. 27855.  From the arguments and a quick review of the briefs, the primary issue in the case is whether the Board of Agriculture was required to undertake an Environmental Assessment pursuant to Haw. Rev. Stat. ch. 343 prior to granting a permit for the importation of genetically-modified algae into Hawaii by the tenant of a State-owned facility on the Big Island of Hawaii.

The recording of the arguments can be downloaded here (63mb mp3).

Several "community groups" filed suit against the Board, claiming that an EA was required because the imported GMO algae would be used in the state-owned facility, and therefore "[p]ropose[d] the use of state or county lands," a triggering event under Haw. Rev. Stat. § 343-5.  In December 2005, the Third Circuit Court granted the community groups' motion for summary judgment, holding that the Board should have undertaken an EA as a matter of law.

On appeal, the Board argued that there was no new "use" of state-owned land because the state's facility was already being used for growing and studying algae, just not the particular GMO algae at issue; indeed, the GMO algae would result in less use of the facility, not more.  The Board also argued that the permit procedures in Haw. Rev. Stat. ch. 150A, which were enacted after chapter 343 and contain a detailed process, worked an implied repeal of the EA requirement.  Today's questions from the three-judge panel (Foley, Watanabe, and Nakamura) focused on two issues. 

First, whether the continuation of an existing use of state land -- although processing a new product in lesser quantities -- qualified as a "use" of state land within the meaning of § 343-5.  The plaintiffs' counsel stressed that "use" means use, and it is undisputed that the imported GMO algae would be using the state-owned facility, and therefore would be using state lands.  The Board argued that no new "use" was proposed, just a different product, and that under the plaintiffs' theory of what defines "use," the act of driving a car on state-owned streets could be considered a "use of state lands" that would trigger an EA.  After prompting by Judge Nakamura, the plaintiffs' counsel countered that argument, suggesting an overly broad reading of "use" could be limited by asking whether the activity (in this case the importation) was an "integral part of the project."  Judge Nakamura extracted a concession from the plaintiff's counsel who admitted that if the GMO algae was imported to be used in a privately-owned facility rather than one owned by the state, there would be no issue of an EA at all. 

The second thread of questioning was whether by enacting chapter 150A, the Legislature intended to limit chapter 343's applicability.  Section 150A-6.3 contains detailed standards, and the Board has promulgated administrative rules with a fairly stringent process to consider import permit applications.  Judge Foley asked whether this statute was the primary protection for the environment and public health.  Judge Foley, joined by Judge Nakamura, then asked the plaintiffs' counsel whether the Legislature's intent to "streamline" the import permit process by enacting chapter 150A would be rendered meaningless if the court did not hold that the EA triggers were not applicable.  If the Legislature did not intend to streamline the permit process by elimination of an EA, how is the process streamlined?

Finally, Judge Watanabe raised an interesting issue, the question of whether the state law  requiring agencies to adopt rules to process permits within a definite time, or they are deemed approved, would by impacted by the requirement of an EA/EIS, and whether outside vendors would have to be solicited by the Board.  Haw. Rev. Stat. § 91-13.5.  Counsel for the plaintiffs responded by suggesting that an EA/EIS would not add significantly to the processing time, and could be accomplished "in house" by the Board.

Although I am loathe to attempt a prediction in this case, the Hawaii Supreme Court (as evidenced by the recent "Superferry" opinion and a string of cases preceding it) has demonstrated it is more than receptive to arguments for a very low threshold for claims that a particular activity triggers a chapter 343 EA/EIS.  What the Supreme Court has not done is articulate any meaningful limitations on those triggers.  Will the ICA in this case?  Stay tuned. 

▪ Superferry EIS Case Summary pt. II: Throwing Open The Barn Door After the Horses Have Been Let Out

When does a person or organization have enough legal interest in an issue such that it can be a plaintiff in lawsuit?  Are there any systematic checks in place to keep the courts from being co-opted for political ends?  These were key issues raised by the Hawaii Supreme Court's opinion in the "Hawaii Superferry EIS case," Sierra Club v. State of Hawaii Dep't of Trans., No. 27407 (Aug. 31, 2007).  This post looks at the procedural issue of "standing," an issue that took up a majority of the court's 104-page opinion. 

An earlier post focuses on the substantive issue of whether the State DOT erred when it determined that improvements to Maui's Kahului Harbor necessary to the Superferry's Maui operation were within the categorical administrative exemptions to the Hawaii Environmental Policy Act, Haw. Rev. Stat. ch. 343, and therefore no Environmental Assessment was necessary.

▪ Superferry EIS Case Summary pt. I: Do Statutory Exemptions Mean Anything?

What purpose is served by the Legislature providing for an environmental assessment "exemption" if there are always exceptions to the exemption? 

That is the question raised by the Hawaii Supreme Court's opinion in the "Hawaii Superferry EIS case," Sierra Club v. State of Hawaii Dep't of Trans., No. 27407 (Aug. 31, 2007).

This post looks at the substantive issue in the case -- whether DOT erred when it determined that improvements to Maui's Kahului Harbor were within the categorical administrative exemptions to the Hawaii Environmental Policy Act, Haw. Rev. Stat. ch. 343, and therefore no Environmental Assessment was necessary. The Hawaii Supreme Court held DOT was wrong, and the improvements were not exempt.  The issue of "standing" took up a majority of the court's opinion, and I deal with that issue in this post.

I won't go into a blow-by-blow outline of the court's reasoning, which you can read for yourself, but will hit some key points that seem to have been overlooked so far in the analysis of the opinion.

I.  EA Needed, Unless Exempt

For certain triggering events, the government is required to produce an Environmental Assessment, unless the action has been declared "exempt."  As the court noted:

Projects are subject to the law if they (1) are either initiated by a government agency ("agency actions") or by a private party who requires government approvals for the project to proceed ("applicant actions"), and (2) propose one or more of nine enumerated land uses or administrative acts, known as "triggers." See HRS § 343-5(a)(1)-(9); Guidebook [for the Hawaii State Environmental Review Process], supra, at 9. If a triggering event occurs, an EA must be prepared, unless the program or project is declared exempt.

Slip op. at 7 (emphasis added).  There was no dispute that the improvements to the State's Kahului, Maui, harbor facility necessary for the Superferry's Maui service were a "trigger" to an EA, and the only question was whether the State DOT was correct when it declared the improvements fell within a categorical exemption. 

II.  Administrative Exemption Rulemaking

In chapter 343, the Legislature delegated to the State of Hawaii Environmental Council the authority to create rules for the processing of EA's and EIS's, and the authority to establish a process by which certain actions may be declared exempt because they will "probably" have little environmental effect:

(a)  After consultation with the affected agencies, the council shall adopt, amend, or repeal necessary rules for the purposes of this chapter in accordance with chapter 91 including, but not limited to, rules which shall:

. . . .

     (7)  Establish procedures whereby specific types of actions, because they will probably have minimal or no significant effects on the environment, are declared exempt from the preparation of an assessment;

Haw. Rev. Stat. § 343-6(a)(7).  These rules are set forth in Haw. Admin. R. § 11-200-1 et seq. and are published here.  Those rules provide categorical exemptions for certain "classes of action," set forth in detail in Haw. Admin. R. § 11-200-8(A).

III.  Agency Determinations of Categorical Exemption & Standards of Review

The very existence of a statutory exemption regime implies that the Legislature contemplated there are circumstances when an agency can determine there is no need for an EA.  The common meaning of the word exemption suggests some form of immunity or release from some duty.  Thus, it would have made little sense for the Legislature to have empowered the council to create an exemption process were it not understood that whatever actions determined to be exempt would be, for the most part, immune from full-blown judicial review each and every time a third party complained that the categorical exemption was applied in error. 

Otherwise, if every exemption determination was subject to an in-depth de novo legal challenge on the basis that the agency was merely incorrect, then there would be as a practical matter no "exemption" at all.  Such an interpretation would instead represent only a shift in the forum from the agency to a court, and a shift in the players from the public to self-appointed litigants.

Thus, it seems like the issue posed by the case was not whether the Superferry merited its exemption because it probably would or would not have environmental effects, but whether DOT exceeded its authority when it determined Superferry fell within one of the categorical exemptions.  But that is not the way the issue was framed by the opinion.  In other words, the case was essentially decided on the standard of review.

The federal courts, in challenges to a federal agency's decision to declare a proposed activity exempt (also known as a Categorical Exclusion, or a "CATEX") from an EA under the National Environmental Policy Act, rely upon a fairly deferential standard of review: the decision may only be set aside if it is "arbitrary and capricious."  See, e.g., Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (1989); Alaska Center for the Environment v. U.S. Forest Service, 189 F.3d 851 (9th Cir. 1999).  A deferential standard permits agencies, not courts, to make exemption decisions, and keeps the policy and technical discussions in the Legislature's intended fora (the agencies), with a court intervening only when it appears the agency has exceeded its authority or its discretion.

In contrast, the Hawaii Supreme Court's treatment of the standard of review -- refusing to recognize agency discretion in the determination of whether a proposed class of actions will "probably have minimal or no significant effects on the environment" -- has, in effect, transferred the legislative delegation of power to determine categorical exemptions from agencies to whomever can demonstrate "standing" in a lawsuit.  And, as we all know, the Hawaii Supreme Court's standing criteria are notoriously low and notoriously flexible, permitting practically anyone claiming "environmental" or "recreational" injury to sue; it is more of a technical hurdle for plaintiffs' lawyers to plead around than a realistic gatekeeping device.  More on the standing issue here.

IV.  Exempt...Unless Not Exempt?

The non-deferential standard of review applied by the Hawaii Supreme Court means that there is little standing in the way of a lawsuit whenever it can be alleged that the agency is merely incorrect.  An action that has been determined to be within a categorical exemption can be challenged when, in a paraphrase of the statute, it "probably will [not] have minimal or no significant effects on the environment."  But if  a categorical exemption can be easily challenged, is there really an exemption as the term is commonly used? 

In that vein, however, the Superferry opinion may simply be the terminus of a road the court started down long ago.  As the opinion itself referenced, the court has in earlier cases taken on the role of "qualitative" judge of exemption determinations.  See Kahana Sunset Owners Ass'n v. County of Maui, 86 Haw. 66, 947 P.2d 378 (1997).  In that case, the court held that an exemption was inconsistent with "the letter and the spirit" of chapter 343, which impliedly required agencies to not only generate classes of exempt activities, but to make a determination in every case that the proposed activity will "probably have minimal or no significant effects on the environment." 

What the Superferry opinion adds on top of that is a non-deferential standard of review virtually assuring that judges may in any case micromanage an exemption determination, with the decision as to whether to hold up an exempted action turned over to anyone who meets the court's low threshold of standing to sue.   

The end result of the Superferry opinion seems to be that the Legislature's exemptions don't appear, in the court's view, to exempt much of anything.

* * * * *

Sidebar: A commenter asks a good question --

wasn't the issue not that the DOT was wrong, per se, but that it didn't follow the proper exemption process and consider secondary impacts? that would probably have been suspect even under the federal court standard.

One of the problems is contained in the language of the exemption rules themselves.  That language is an "exception to the exceptions," and provides that actions which have been declared exempt "because [usually] they will probably have minimal or no significant effects on the environment" can be declared not exempt because they may nonetheless have significant impact in a particular case:

    All exemptions under the classes in this section are inapplicable when the cumulative impact of planned successive actions in the same place, over time, is significant, or when an action that is normally insignificant in its impact on the environment may be significant in a particularly sensitive environment.

Haw. Admin. R. § 11-200-8(B). This process is similar to federal agency treatment of categorical exemptions under NEPA, so it should not impact the deference level of the standard of review.   

To address your two questions. 

First, my read of the opinion wasn't that it was limited to process analysis, as it would have been under a deferential standard of review.  The court dealt with the qualitative validity of the DOT's decision, not just whether it followed procedures. The arbitrary and capricious standard means that a court doesn't really inquire whether an agency is correct or not, just whether it is in the ballpark and has otherwise remained within its legal constraints.  Statutes like HEPA are "study and disclose" regimes, not "zero tolerance" laws; they are risk measurement tools, not guarantees against environmental harm.  So the issue under a deferential standard of review is not necessarily the risk involved, but whether the agency has been provided enough information to analyze the risk before it makes its decision. 

The court's treatment of the issue begins on page 83 of the slip opinion, and focuses on the question of the scope of the exempted action: whether it was simply minor improvements to Kahului Harbor, or whether the exemption determination also was required to look at the bigger picture, the Superferry project (either in whole, or as it relates to Maui service).  The court avoided ruling that the project needed to be considered as a whole, relying instead on "secondary impacts," holding, as you note, that the record did not indicate that DOT considered secondary impacts.  See slip op at 90 - 101.  Would it have made any difference to the court if the record did show that DOT considered, but rejected, alleged secondary impacts? 

This goes to the second part of your comment, and you may be right that even under a deferential standard of review, DOT's exemption may have been insufficient.  We don't know, of course, how the Hawaii Supreme Court would apply an "arbitrary and capricious" standard to the record in the Superferry case and whether that would be enough to alter the outcome. 

 

▪ Links for "Progress in Protecting Property Rights Post-Kelo"

To my colleagues at the LINC conference in D.C., thank you for the opportunity to present the topic.  Here are links to the cases discussed:

• Applying Kennedy’s Kelo concurring opinion – 49 Wb, LLC v. Village of Haverstraw, 2007 NY Slip Op. 05506 (Jun. 19, 2007) (New York)
• Blight slight – Mint Properties v. Centene Plaza Redev. Corp. (SC88487, Jun. 12, 2007), (Missouri)
• How to plead Kelo – Goldstein v. Pataki, 488 F.Supp.2d 254 (E.D.N.Y. 2007), appeal filed (2d Cir. 2007)
• Blight slight, part II – Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, 924 A.2d 447 (2007) (New Jersey) – blight means more than “not fully productive”
• Public use challenges not subject to Williamson County ripeness rules – Rumber v. District of Columbia, No. 06-7004 (D.C. Cir., May 25, 2007)
• Kelo applied to Euclidean taking – Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006)
• Statutory limitations – Cowlitz County v. Martin, No. 34943-4-II (Aug. 14, 2007) (Washington) – county’s taking for “fish passage” not authorized by statute
• Procedural due process in eminent domain – Brody v. Village of Port Chester, No. 00 Ci. 7481 (HB) (S.D.N.Y., July 18, 2007), on remand from 434 F.3d 121 (2d Cir. 2005)
• Notice in eminent domain – Divine v. Town of Nantucket, 449 Mass. 499, ___ N.E.2d ___ (July 19, 2007)
• Kelo pretext SCOTUS cert petition – MiPro Homes, LLC v. Mount Laurel Township (No. 06-1345) (cert. petition filed - conference on 9/24)
• Is the statute of limitations in Tucker Act claims jurisdictional – John R. Sand & Gravel Co. v. United States (No. 06-1164) (cert. granted May 29, 2007)

▪ Planet Kauai Blogs the Kauai Superferry TRO Hearing

Charley Foster at Planet Kauai has written up the details of the Superferry TRO hearing on Kauai.  Check it out.

Update: Here's his detailed report.  The critical issues appears to be the 120-day statute of repose to institute challenges under Haw. Rev. Stat. § 343-7(a):

The plaintiffs seemed to view themselves as essentially in the same position as the Sierra Club in its recent successful injunction motion on Maui. However the court expressed its doubts and pointed out that, unlike the plaintiffs here, the Sierra Club filed an objection to the exemption granted Superferry by HDOT two and a half years ago and within the 120-day period required under section 343 of HEPA. Judge Valenciano pointed out that the supreme court's decision made special mention of this fact - explicitly placing the event triggering the clock on this time limitation back to the grant of the exemption - and wondered out loud whether the top court might have done so in order to give guidance to lower court judges on precisely this issue.

This seems like a pretty high hurdle.  Statutes of repose -- as contrasted with statutes of limitation -- are, generally speaking, much more strictly construed.  Missing the deadline usually means no case.  Section 343-7(a) provides:

Any judicial proceeding, the subject of which is the lack of assessment required under section 343-5, shall be initiated within one hundred twenty days of the agency’s decision to carry out or approve the action, or, if a proposed action is undertaken without a formal determination by the agency that a statement is or is not required, a judicial proceeding shall be instituted within one hundred twenty days after the proposed action is started.

Charley also writes: "The Judge postponed making a ruling until tomorrow afternoon. Parties are to brief the court by 11 tomorrow morning on the 120 day statute of limitation under 343-7. I predict plaintiffs won't get their tro. Lots of arguments were made in the 3 hour hearing and I'll be posting about it later on."

▪ More on Kauai Springs Zoning Permit Injunction

Hawaii Reporter posts "Kauai Springs: Still Open for Business," a story about the injunction preventing the County of Kauai from shutting down the island's only drinking water company while its appeal is pending.  Full story here.

▪ Preliminary Injunction in Kauai Zoning Permit Case

A story from today's Garden Island News, about the Kauai Springs case, reporting that the circuit court has granted the company's request for a preliminary injunction, preventing the County from putting Kauai Springs out of business while the appeal is being considered. 

The case is the appeal by Kauai's only bottled water company of the Kauai Planning Commission's denial of a request for a permit to use agriculturally zoned land for a small bottling facility (pictured).  The Planning Commission denied the request because it had "concerns" that the State Commission on Water Resource Managment and State Public Utilities Commission might regulate Kauai Springs, despite the fact that both agencies expressly told the Planning Commisssion that they had no problem at all.

A state judge has verbally approved a preliminary injunction to allow Kaua‘i Springs to continue operating a water-bottling plant in Koloa as it appeals a county decision to shut down the facility.

The island’s only water company that draws from a local spring is appealing a decision by Kaua‘i County Planning Commission in March denying its request for a use permit, a special permit and a Class IV Zoning permit.

* * * *

Robert Thomas, an attorney with Damon Key Leong Kupchak Hastert, representing Kaua‘i Springs, has said the commission doesn’t have the right to decide on water matters, only land matters.

The company requested approval of the commission permits after a competitor complained it conducted an industrial activity on agricultural lands, Thomas said.

Company owner Jim Satterfield said he secured federal, state and county approvals when he opened his business in 2004.

Full story here.

▪ More on Kauai Zoning Permit Case

The Star-Bulletin also reports on the Kauai Springs litigation, a case challenging the Kauai Planning Department's denial of a request to use land zoned "Agriculture" on grounds wholly outside its authority or jurisdiction:

The lawyer for Kauai Springs, however, said that water is a food like any other agricultural product and that closing down an agricultural business for commercially selling its product is ludicrous.

Robert Thomas, an attorney with Pacific Legal Foundation[*] representing Kauai Springs, said last week that the commission made a hasty decision, overstepped its bounds and made a decision on water rights, not land rights.

Both the state Public Utilities Commission and the State Commission on Water Resource Management wrote letters to the county, saying the company had met all their criteria.

Full story here.  [*Note - one correction: I'm representing Kauai Springs in my private capacity, and Pacific Legal Foundation is not presently involved.] 

▪ Kauai Zoning Permit Case Reported

Kauai's newspaper, in a story entitled "Kauai Springs operating for now," reports on a case:

“We’re in a holding pattern,” said Robert Thomas, an attorney with Damon Key Leong Kupchak Hastert representing Kaua‘i Springs.

In March, Kaua‘i Springs appealed the Planning Commission’s decision to deny its request for a use permit, special permit and Class IV Zoning permit.

The company had requested the additional permits after a competitor complained that it was conducting industrial activity on agricultural lands, according to Thomas.

When owner Jim Satterfield set up shop in 2004, he did so with county, state and federal approval.

Thomas said that while his client did not agree that more permits were necessary when the issue came up earlier this year, he decided to pursue them because there had not been problems in the past.

Full article here.

▪ 2006 Land Use in Review: Clean Water Act Jurisdiction

Rapanos v. United States, 547 U.S. ___ (Jun 19, 2006) was this year's big environmental case from the U.S. Supreme Court, yet it did little to resolve the question over the geographic scope of "navigable waters" as used in the Clean Water Act.  The CWA requires a property owner seek a permit from the Army Corps of Engineers prior to any activity that may involve "navigable waters of the United States."  The facts of the case are set out here.

The Court split 4-4-1, holding to overturn the decision of the Corps to require a Michigan landowner to seek a permit, but could not agree on a rationale.  The plurality decision left most commentators scratching their heads, unsure of what the rule of law was in the wake of the decision, and how to apply a ruling on which there was no majority opinion.  As in last term's Kelo and Lingle cases, Justice Kennedy issued a separate opinion that may forecast the eventual majority rule of law. 

Since I first wrote about the Rapanos decision, the issue has not become any clearer.  The lower courts are split as to how to apply the various opinions, and how to analyze CWA jurisdiction.  Another landowner caught up in the CWA net has asked for cert review, that as of this post, has not been acted upon by the Court. 

Until the Supreme Court resolves the question, the lower courts will be as confused as the commentators, and property owners who may be affected remain in legal purgatory.

Link: Rapanos blog.

▪ Man Bites Dog: Ag Uses to be Required on Ag Land

"Man bites dog" story of the day: Kauai developer to require ag use on ag land. It's a different twist since most of the controversy regarding "farm dwellings" and ag uses these days goes in the other direction:

The developers of the Kealanani agricultural subdivision hope to break a tradition in which agriculture-zoned lots are sold as country estates with little if any assurance that agricultural production will take place.

Their goal: to sell view lots for premium prices, but to come as near as possible to an ironclad requirement that owners farm on the property.

. . . .

The developers clearly are trying to break the image of "agricultural subdivision" as code for "rich-folks' estates." Thus far, their project has generated virtually none of the rancor that has attended projects like the Big Island's Hokuli'a. At one point, that project was halted by a court order that said it was actually an illegal use of lands earmarked by the state for agriculture.

A settlement in the case eventually allowed the project to continue, but for critics, the development remains an illustration of the so-called "fake farms," large homes built on agricultural lands where only nominal farming is done in a show of conforming to a state requirement that homes on agricultural lands must be "farm dwellings."

The Kealanani development's owners association will have the ability to fine owners who fail to fulfill their agricultural commitments, Kyno said.

The enforcement mechanism will presumably be restrictive covenants (CC&Rs), but this project should not raise the Act 5 issue, which is designed to invalidate CC&Rs that prohibit (not require) ag uses on ag lands.  More on ag subdivisions, CC&Rs, and Act 5 here.

    

▪ Examining the Impact of Act 5 on Restrictive Deed Covenants (CC&Rs)

an earlier version of this post was published in Hawaii Agriculture magazine (July – September 2006)

Hawaii law protects the “right to farm.”  But what exactly does that mean? 

In addition to the Right to Farm Act detailed here, the Hawaii Legislature recently outlawed certain agriculture-restrictive deed restrictions known as “conditions, covenants, and restrictions,” or CC&Rs. 

Ag-restrictive CC&Rs

Use of land within many so-called “agricultural subdivisions” is governed by CC&Rs which limit or restrict otherwise legal agricultural uses.  CC&Rs have been characterized as “private zoning,” because they represent a private agreement among neighboring landowners to mutually restrict the otherwise legal uses of their land. 

For example, ag-restrictive CC&Rs may restrict crop height or prohibit more than a certain number of animals on a parcel, despite these uses being perfectly permissible in an Agriculture district. 

Act 5

Overriding Governor Lingle’s veto, the 2003 Legislature enacted Act 5 (now codified here) and outlawed CC&Rs that restrict “agricultural uses and activities” on land classified "Agriculture," if the CC&Rs were created after July 8, 2003, the effective date of the Act. 

The definition of “agricultural uses and activities” is somewhat different than the definition of “farm operation” in the Right to Farm Act, but does cover a broad range of activities.

Protected agricultural uses include crop cultivation, orchards, farming, animal husbandry, ranching, aquaculture, forestry, wind energy generation, and accessory uses.  A more detailed list of protected activities is set out in the State Land Use Law.

The only ag-restrictive CC&Rs allowed are those that protect environmental or cultural resources, agriculture leases, or utility or access easements.  Act 5 also permits the counties to enact further limitations under their zoning power, but no county has yet done so.

“Voidable” not "Void"

Act 5 makes ag-restrictive CC&Rs “voidable,” not “void.”  What this means is that if a community association or neighboring landowner attempts to enforce an ag-restrictive CC&R, it is not automatically invalid and the farmer must properly assert Act 5 as a defense. 

In other words, if Act 5 is applicable, care must be taken to insure that the farmer does not inadvertently waive Act 5’s protections. 

Finally, what if a deed contains ag-restrictive CC&Rs that were agreed to before July 8, 2003?  If that’s the case, the Act 5 defense may not be available.  The Legislature avoided constitutional problems of interfering with existing agreements and property rights when it enacted the law, so only outlawed CC&Rs entered into after the Act’s passage.

   

▪ Protecting the Right to Farm

an earlier version of this post was published in Hawaii Agriculture magazine (April - June 2006)

Hawaii law protects the “right to farm,” but what does that mean? 

Can a farm's or ranch's neighbors complain about tractor noise, flies that may be attracted to livestock, the height of crops, or if spray drifts over their property?

Hawaii law, like the laws of many other states, contains a powerful legal tool to protect a farm against such claims: the Right to Farm Act, which prohibits certain tort claims against farmers and ranchers involving their use of their property.

Nuisance Lawsuits

Generally speaking, a property owner may sue neighboring landowners if his or her property is being used in a way that harms another’s property or the public.  These claims are known as “nuisance” lawsuits.

Typical claims in the agriculture context involve a neighbor complaining about odors, noise, dust, and insects, and other activities typical of farming operations.  And, unfair as it may seem, the result in a nuisance lawsuit is not governed by which landowner was there first

For example, a newly arrived neighbor might sue a nearby ranch claiming a nuisance, even if the ranch existed long before the neighbor purchased the property, and even if it was bought with the full awareness of the ranch’s operations.

The ability to bring a nuisance lawsuit is not set out in statutes or rules, but comes to us via the common law, or precedent-setting decisions by judges.  The Legislature, however, may supplant the common law by enacting statutes limiting the ability to file such lawsuits.

Constitutional Rights

The people of Hawaii recognize the importance of agriculture to our economy, our environment, and our lifestyle, and the Hawaii Constitution spells out the state’s express policy favoring agriculture and agricultural uses of land. 

In the Constitution, the State is commanded to “conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands.”

Reasonable Practices

In 1982, the Legislature recognized the potential threat to agriculture posed by nuisance lawsuits interfering with reasonable farm uses.  Implementing the constitutional mandate to “conserve and protect” agricultural lands, the Legislature enacted the Right to Farm Act, which bars nuisance lawsuits if certain conditions are met.

First, the protected activity must be a “farm operation.”   This is very broadly defined to include commercial agriculture, aquaculture, forestry, ranching and livestock, poultry, and beekeeping operations, among others. 

Also included within the definition of “farm operations” are accessory uses such roadside stands, machinery or irrigation pumps, chemical fertilizer and pesticide application, and labor operations

Second, the farming operation must use “generally accepted agriculture and management practices.”  In other words, if a farmer uses reasonable practices – as established by fellow farmers – those practices are protected.  The law also places the burden of proof on this issue on the person alleging the nuisance by creating a legal presumption that a farm is being operated reasonably according to industry standards.

The farming activity cannot be causing water pollution or flooding.  Also, the Act only limits nuisance claims by private parties, and does not prohibit the government from stopping farm operations that threaten the public health or safety. 

Right to Farm Act

If these conditions are met, the courts and all “public employees” – a term not defined but most likely meaning state and local government personnel and agency officials – are prohibited from determining that farming activity is a nuisance.   A farm that qualifies may operate normally without fear of being sued by neighbors.  As the Indiana Court of Appeals held when it determined that the Indiana Right to Farm Act protected a hog operation from a neighbor’s nuisance lawsuit about odors, “so long as the human race consumes pork, someone must tolerate the smell.”

As a final disincentive to nuisance lawsuits, the law also provides that if a farmer is frivolously sued for a nuisance despite the Right to Farm Act, the farmer may recover attorneys’ fees and costs.

In sum, the Hawaii Right to Farm Act allow the farmer – not neighbors or judges – to manage the farm.