2006

What happens when a religious institution claims that local land use regulations impermissibly burden its First Amendment rights to freedom of religion?  A recent case decided by the Ninth Circuit, Guru Nanak Sikh Society of Yuba City v. County of Sutter, 456 F.3d 978 (9th Cir. 2006) (Aug. 1, 2006), illustrates the conflict. 

After its proposal to develop a temple on one parcel was denied, a Sikh group sought a conditional use permit (CUP) from Sutter County, California, to construct a temple on another parcel designated for agricultural use.  The County planning department recommended approval, with a series of conditions designed to mitigate the proposed temple’s impact, such as limiting the number of people attending the temple to 75, and several design modifications to the building.  The Sikhs accepted the conditions. 

After a public hearing at which members of the public opposed the CUP, mainly on the basis of noise, traffic, interference with neighboring agriculture operations, and predicted lowering of property values in the area, the county planning commission narrowly approved the application, subject to the conditions.  Several neighbors appealed to the county Board of Supervisors which denied the CUP. 

The Ninth Circuit first held that the denial of the CUP was a “substantial burden” on the temple’s free exercise of religion.  The Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) thus applied, and required the government to show that the burden on religion was outweighed by a “compelling governmental interest.”  In other words, before the government may deny a religious institution a specific land use permission, it must have a very good reason, and be able to prove it.  In this instance, the court found that the County’s denial of the temple’s first request, combined with the County’s denial of the CUP even after conditions to mitigate impacts had been accepted by the Sikhs, was a substantial burden on their religious freedom:

Because the County’s actions have to a significantly great extent lessened the prospect of Guru Nanak being able to construct a temple in the future, the County has imposed a substantial burden on Guru Nanak’s religious exercise. 

The County did not offer any countervailing “compelling interests,” and did not even attempt to meet the burden of persuasion imposed on it by RLUIPA.  The Ninth Circuit also determined that RLUIPA was a valid exercise of Congress’ power to enforce the Fourteenth Amendment, and its power to enforce the Free Exercise Clause of the First Amendment. 

This case shows that RLUIPA continues to be a powerful tool to prevent land use authorities from undue interference with a religious use of property.

    

   Continue Reading ▪ Religious Land Use Trumps Local Permit Denials

The Hawaii Supreme Court recently decided a case that provides some guidance to those who practice in the often ill-defined space between executive agencies and the courts, a place land use lawyers and their clients frequently find themselves.

In Hui Kakoo Aina Hoopulapula v. Board of Land and Natural Resources (Sep. 21, 2006), the court confirmed that in order to properly demand a “contested case” (a trial-like administrative hearing) and thus preserve a right to judicial review of agency action, the party demanding the hearing must follow the agency’s rules to request it, even if it appears futile to do so.

In that case, the electric company asked the State Board of Land and Natural Resources for a long-term lease of brackish water from a Big Island aquifer for “industrial use and fire suppression” for a generating plant. 

Parties who have long objected to the generating plant objected to the proposed lease and orally asked the Board for a contested case at a public hearing the Board scheduled on the electric company’s request.  The Board rejected the oral request for a contested case and issued the lease after a public auction.  The objectors did not file a written request for a contested case with the Board, as required by the Board’s rules of procedure.

The objectors then sought judicial review in circuit court of the issuance of the lease, and the denial of the contested case.  Circuit court review of administrative agency action is limited to appellate review of the administrative record produced after a contested case.  Thus, if no contested case is held in the agency, the circuit courts lack subject matter jurisdiction. 

The circuit court, finding that no contested case was conducted by the Board, determined it lacked jurisdiction, and the supreme court affirmed, never reaching the substantive issues raised by the objectors.  Lack of jurisdiction prevented the courts from considering the case at all.

The key holding of the case is that a proper written demand for a contested case is a jurisdictional prerequisite to judicial review.  Even when the agency has denied an oral demand.  The court held that the agency’s “no” may not have really meant “no,” and the objectors may have been able to change the agency’s mind with a written demand for a contested case. 

No demand for a contested case means no contested case is conducted, and no contested case means that a party disappointed with the result of agency action cannot run to court and seek reversal.

    Continue Reading ▪ Contesting Contested Cases

At a recent conference I attended, one of the speakers, an eminent scholar of constitutional law and frequent US Supreme Court advocate, suggested that the Court’s decision in Kelo was the correct result because it allows the decision on whether a taking of private property is “for public use” to be made in the fora where it should be made, state legislatures and state courts. 

In Kelo, as you may recall, a bare majority of the Court held that the “for public use” language in the Fifth Amendment’s Takings Clause does not permit the federal courts to review the substantive validity of an exercise of eminent domain.  In other words, the reasons advanced by the condemning authority are nearly immune from federal judicial review. 

The resulting firestorm in state legislatures and local governments, and the state court decisions in Hathcock and City of Norwood, the argument goes, are the natural result of the US Supreme Court avoiding injecting itself into an area the federal courts have no business being.  Thus, Kelo shows that the system works the way it should. 

While that proposition is not entirely disagreeable (and I agree it seems to have been the impetus for the Court’s majority), it does not appear to be consistent with the Court’s approach to other rights secured by the Bill of Rights. 

For example, would it be surprising if a US District Judge declined to hear a challenge that a local ordinance violated the First Amendment’s Free Speech clause, holding that such decisions should be made in state courts, or local legislatures?  You bet it would.

However, property owners who claim that state or local action violates the Takings Clause receive just that sort of treatment. 

Whether it is the bizarre “ripeness” doctrine from the Williamson County case (which tells a property owner that she must seek redress for state claims in state courts first, but that if she loses there, she is barred from asserting her federal claims in federal court); or the Kelo decision in which the federal courts have washed their hands of the “for public use” language in the Fifth Amendment, it seems strange and inconsistent for certain constitutional rights to have priority status, and the federal courthouse door thrown wide open for those, but slammed shut for others.

   Continue Reading ▪ Isn’t Property a Constitutional Right?

A Hawaii circuit (trial) court, as reported here, has declared that “Act 73,” (codifed here and here) which determined that certain land “accreted” on Hawaii’s shorelines is “public land,” is an “uncompensated taking” of private property. 

The court held that the Act was a “sudden change in the common law,” and prevented the littoral owner from registering the property or quieting title.

The common law doctrines of accretion and erosion were generally uniform, and the littoral property owner took the bitter (erosion) with the sweet (accretion): if her property naturally washed away, she lost it; but, conversely, if land naturally accreted on her property, it was hers.  One of the incidentals of owning property next to the ocean or stream.

Act 73 radically altered that balance, determining as a matter of legislative fiat that the State owned accreted land, while not disturbing the usual rules of erosion.  Under Act 73, the littoral owner could not secure title to accreted land, yet continued to lose title to eroded land. 

In other words, “heads the State wins, tails you lose.”   

     Continue Reading ▪ Regulatory Taking of Accreted Beachfront Land

I have recently completed the Hawaii chapter in a compendium on the eminent domain laws of each of the fifty states entitled (not surprisingly): Law and Procedure of Eminent Domain in the 50 States.

Each chapter of this publication is devoted to a summary of a single state’s eminent domain laws, and provides the basic tools for understanding each jurisdiction’s condemnation law, including who has the power to take, sources for condemnation authority, the rules of just compensation, and the procedural aspects of eminent domain litigation.

The compendium is sponsored and published by the ABA Section on Litigation (Committee on Condemnation, Zoning and Land Use). 

The individual state chapters, mine included, are posted for download for ABA members here. 

    Continue Reading ▪ Eminent Domain Compendium Published

The University of Hawaii Law Review has published an article on vested rights and development agreements, authored by me and my Damon Key colleagues Ken Kupchak and Greg Kugle.

“Vested rights” is a body of law designed to protect property owners who rely upon government assurances — often in the form of development permits — if the government subsequently attempts to change its mind, or revoke the issued permits.

The title of the article is Arrow of Time: Vested Rights, Zoning Estoppel, and Development Agreements in Hawaii, and the citation is 27 U. Haw. L. Rev. 17 (2004).

Although the article carries a date of 2004, it was published in February 2006, since the U.H. Law Review was a tad behind schedule.

Here’s a summary of the article, from its Introduction:

The modern land regulation and development process is a complex, lengthy, expensive, and very often uncertain undertaking.  The uncertainty is compounded by the ability of the government to change the regulations applicable to property after the owner has begun planning or building but has not completed construction.

Attempting to balance these competing interests, the courts have responded by creating the doctrines of vested rights and zoning estoppel. These closely-related principles permit the government to retain flexibility in land use planning only if a property owner has not proceeded sufficiently along the development path that it would be unconstitutional or unfair to prevent it from completion.

Once an owner’s rights have “vested,” the owner possesses development rights…if the government is estopped, it is prevented from applying any future incompatible, albeit legal, regulations to the property.  Vested rights and zoning estoppel thus counterbalance the government’s unfettered ability to use its police power to regulate land uses, providing some insulation of the land development process from shifting political winds.

This Article details the development of the doctrines by the Hawai’i courts and the application of vested rights and zoning estoppel in Hawai’i land use litigation. It also discusses remedies, and analyzes alternatives to vested rights and zoning estoppel litigation such as development agreements, land swaps, and transferred development rights.

It is a fairly comprehensive treatment of vested rights and zoning estoppel law in Hawaii, and compares our courts’ approach with that of fellow jurisdictions.  It also suggests some areas where the law can be filled out more fully in Hawaii. 

Finally, it deals with the interplay between development agreements and vested rights.  You can’t understand one without understanding the other.   

If you’d like a reprint of the complete article, drop me an e-mail.

    Continue Reading ▪ Law Review Article on Vested Rights and Development Agreements

I’m on the faculty of a legal education seminar titled “Eminent Domain: Legal Update and Practical Tips” scheduled for Octber 12, 2006.  Details here.  Download the brochure here.

Also on the faculty are some stellar individuals in the property law and condemnation business: Professor David Callies, valuation expert Jan Medusky, and attorney James K. Mee. 

I will be addressing three subjects:

  • How Recent Case Law and Legislative Developments in Eminent Domain Law Will Impact You (with Prof. Callies)
  • Understanding Just Compensation (with Jan Medusky)
  • The Debate Between Government Rights and Property Owner Rights (with Jim Mee).

We will be dealing, among other topics, with the impact of Kelo and the legislative reaction to the opinion (unfortunately, none so far in Hawaii).  While a background knowlege of eminent domain concepts is helpful, it will not be necessary in order for an attendee to get a lot out of these sessions.

Update – October 12, 2006: materials from this seminar posted here.

   Continue Reading ▪ Eminent Domain seminar – October 12

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.

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

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.

    Continue Reading ▪ Protecting the Right to Farm

An earlier version of this commentary was published in the Honolulu Advertiser

According to Kaua’i government officials, how much property tax homeowners pay is an issue too important to be trusted to the people who pay them.

In recent years, the median value of Kaua’i homes has soared to nearly $700,000, a 48 percent increase this past year alone. The staggering prices are the product of a hyperactive market fueled by speculation, and investors flush with cash willing to pay top dollar for modest properties.

A rise in market value has little benefit to those who have no intention of selling. When a neighbor’s home sells, or is upgraded by a new owner, all of the properties in the neighborhood see an increase in assessed value, which the tax collector uses to justify increased property taxes.

There is little a homeowner can do, except challenge the assessment through the often byzantine maze of local bureaucracy, with only a slight chance of success.

Since 1998, the average Kaua’i homeowner experienced a nearly 50 percent increase in property tax, and county coffers are bulging. But middle-class families of longtime Kaua’i residents, seniors and others on fixed incomes are in danger of being taxed out of their homes.

After years to trying to convince their elected officials to provide tax relief, the people of Kaua’i exercised their right to change the system themselves. Local homeowners proposed an amendment to the Kaua’i Charter to roll back property taxes to 1998 levels for owner-occupied homes.

For those who bought their homes after 1998, property taxes are based on the assessment at the time of purchase. Yearly tax increases for all resident homeowners are capped at 2 percent.

Under this system, resident homeowners are not at the mercy of an unpredictable and volatile housing market and are able to plan their property-tax liability from year to year and to budget accordingly.

And there is no surprise to the new purchaser, who is able to factor future property-tax liability into the decision to buy.

The charter amendment was placed on the November 2004 ballot, and in the run-up to the vote, virtually every Kaua’i elected official attacked the measure, with the mayor and the County Council leading the charge.

They claimed it would adversely affect their ability to provide services. However, since 1998, the Kaua’i budget has risen 50 percent, and the current budget increased 25 percent over last year’s alone. Kaua’i government spending is now a record $123 million.

In spite of the organized and well-financed opposition, the people of Kaua’i approved the measure by a nearly 2-to-1 margin. Instead of accepting this decisive political defeat, Kaua’i officials went to court.

Against themselves.

The Kaua’i county attorney sued the mayor, the finance director and the County Council. The claim: the County Council has a monopoly on property-tax policy, and the people of the county had no right to propose and vote on the charter amendment.

To top it off, the county attorney represents both sides in the lawsuit. The litigation is backed by a $100,000 war chest of taxpayer money, budgeted for private lawyers hired to attack the charter amendment.

Four local homeowners intervened in the officials-against-themselves case. They argued that government officials should not be able to concoct a lawsuit, in which they are both the plaintiff and the defendant, in order to gain court approval for their claimed real-property-tax policy monopoly.

The Kaua’i Circuit Court voided the charter amendment, ruling that only county councils may set property-tax policy, and the people have no right to do it themselves by amending their charter.

The homeowners have now appealed to the state Supreme Court because the people — not just local politicians — have the right to vote and decide on how property taxes are imposed.

Until now, this case has received scant attention beyond Kaua’i’s shores, but Honolulu property owners should take notice.

With similar market forces at work and an average 26 percent increase in property value, Honolulu homeowners are beginning to rethink whether property taxes should be tied to an unpredictable housing market that penalizes long-term owners for not selling their properties.

Would Honolulu’s politicians consider enacting a measure like Kaua’i’s? If the Kaua’i case is any guide, it is doubtful.

Property-tax relief only comes when government officials understand that if they don’t provide it, the people will. Or when the people — fed up with inaction of government officials — do it themselves.

If the arguments of Kaua’i officials prevail on appeal, however, the right of the people to directly set property-tax policy will be lost forever. If this occurs, any incentive for government officials to reform the current property-tax system will drop dramatically.

In the end, this case will determine whether “we the people” determine how much property tax we are willing to bear, or whether the politicians alone have control.

Download the briefs in this appeal: Merits Brief | Reply Brief

Continue Reading ▪ Whose County is it, Anyway? Property Taxes, Charter Amendments, and the People’s Right to Vote