The owner’s land is a peninsula most of the time, but when Flathead Lake, Montana, rises a few months each year, it needed a bridge to access. So it asked the County “How about a bridge? We will only use it when the water rises.” County said yes, issued a permit.
NIMBY neighbors, however, had another idea, They sued the County to void the permit: “What about the Montana Lakeshore Protection Act?” they asked. Trial court agreed, declared the permit void, and ordered the owner to restore the area to its natural state. Montana Supreme Court affirmed.
Next up: the owner’s inverse claim against the County. We got a vested property interest, and “removal of the bridge by court order amounted to a taking[.]” Slip op. at 3. Trial court agreed with the County that the permit was void ab initio, and thus no vested property right. Moreover, the owner could not show that the County had taken or damaged the partial bridge for public use (the bridge came down because of the Montana Lakeshore Act, not us said the County). Back up to the Montana Supreme Court.
In Flathead Props. v Flathead County, No. DA-24-0233 (Dec. 31, 2024), the court reversed. This was an appeal from a motion to dismiss, so the court took as true the allegations in the complaint. There was reliance on the permit, and “[o]nce the bridge was constructed, Appellant presumably owned the bridge in fee and had the right to use, exclude, transfer, or dispose of the property … [and] seemingly had a constitutionally protected property interest in the bridge itself.” Slip op. at 7.
The court also analyzed the complaint’s allegations as a regulatory taking (even though it was pleaded as an “inverse” claim):
Here, appellant’s complaint asserts it had a vested property right in the bridge, as described above. Additionally, appellant asserted the bridge added value to its property and the removal of the bridge thus deprived appellant of all use of the bridge. Appellant’s complaint also asserts it relied on the County’s permit to expend money and construct its bridge. Finally, appellant asserts the County deliberately issued the permit which later turned out to be faulty. As such, we find the facts asserted by appellant’s complaint are also sufficient to withstand a 12(b)(6) dismissal under a regulatory takings analysis
Slip op. at 8-9.
What about the notion that an owner cannot reasonably rely on an invalidly-issued permit? Not dispositive: “[t]his Court has not yet considered whether reliance on a faulty permit” can result in a vested right. Slip op. at 5. And what about the idea that no bridge for part of the year does not seem to lead to a conclusion that the entire property can’t be used, or that the bridge removal rendered it valueless. Indeed, the court carefully avoided the merits of the case, noting only that “[w]e make no judgments on whether Appellant’s claims would win at trial or survive a motion for summary judgment after further development of the factual record.” Id.
This is the right approach at the pleading stage. The place to weed out factually weak claims is summary judgment, not motions to dismiss. More courts should take heed and approach this the same way. Instead, we see most courts serving as gatekeepers, throwing out many if not most takings claims at the pleadings. Rather than having the complaint do what complaints do (provide notice of the basic facts and the plaintiff’s beef with the defendant), takings complaints are often treated by courts as technical exercises like when you plead fraud — they require particularity, invocation of magic words, and hypertechnical pleading.
Be like Montana!
Flathead Props. v Flathead County, No. DA-24-0233 (Montana Dec. 31, 2024)