On one hand, there's a lot going on in the Maryland Court of Appeal's opinion in Maryland Reclamation Assoc, Inc. v. Harford County, No. 52 (Apr. 24, 2020), a case we've been following. The opinion is a whopping 81 pages, and details facts that go back decades. On the other hand, the opinion doesn't actually say a lot.
But what it does say is a doozy.
Here's your BLUF (Bottom Line(s) Up Front):
- Maryland agencies have jurisdiction to consider and rule on state constitutional issues including takings. Apparently, this is not something the court adopted in this case, but is a long-standing practice in Maryland. Count us as very surprised that agencies have the power to adjudicate constitutional rights. Very, very surprised.
- A property owner must raise their Maryland Constitution takings claim and present it for adjudication to very agency accused of taking property without compensation.
- The property owner must seek a "variance" from the agency -- not just to ripen the claim (see, e.g., Williamson County), but "where the application of a zoning regulation will deny the landowner of all beneficial use of its property, the Board of Appeals has the authority to grant an administrative remedy in the form of a variance—a constitutional “relief valve”—to avoid a takings claim."
- "[T]here a property owner establishes before the administrative agency that the application of a zoning regulation will deprive the property owner of all beneficial use of its property, the administrative agency has the authority to grant relief in the form of a variance. If the administrative agency grants this relief and permits the use by granting a variance, the property owner no longer has a takings claim and the right to alternative relief in the form of just compensation." You heard that right: if the agency grants the variance, you have no compensation claim under the Maryland Constitution. Sure does sound a lot like a variation of California's overruled Agins rule (only remedy for a taking is a writ of administrative mandamus).
- "It is also clear from our jurisprudence concerning unconstitutional takings claims arising from the application of zoning regulations that the Board makes the initial factual determination of whether a property owner can use its property for any other beneficial use, not the courts."
Where to begin with these conclusions?
Rather than walk through the factual details (again, this is an 81-page opinion), here's the quick background. Maryland Reclamation Association bought land back in 1990 to operate a rubble landfill. But after the purchase, the County changed its regs to prohibit (guess what) ... rubble landfills.
Mesne litigation ensued in various tribunals over the years. Eventually, MRA filed a regulatory takings claim under the Maryland Constitution's takings clause in 2013, and the jury awarded a whopping $45 million in just compensation and interest. Hartford County asserted the claim was barred by the three-year statute of limitations, and that MRA should have exhausted its administrative remedies by seeking a variance.
Some thoughts:
- On one hand, the court's conclusion can be read narrowly: that agencies have the jurisdiction to establish Williamson County-style "final decision" ripeness through their variance process. If that's all the court is saying, we're good.
- Also (on the same hand), you might read the court's conclusion narrowly to only require that an agency develop the factual record in a takings case. We might be okay with that, too.
- But on the other hand, we cannot read the opinion narrowly on either ground. The court not only recognized the agency's (exclusive, as we read it) jurisdiction to consider takings and other constitutional claims, it concluded that if the agency grants a variance (the takings "safety valve"), then the owner cannot seek just compensation. Both of those concepts blow our minds. We thought it was the judiciary that adjudicates constitutional issues, even state constitutional issues. Apparently not the rule in Maryland. And after First English, how can Maryland law not recognize a just compensation remedy at least for any temporary taking?
- Finally, what about the right to jury trial? The court concluded no harm, no foul: a property owner doesn't have the right to have a jury determine that there's been a taking, only the amount of just compensation if the court has determined there's been a taking. (And a court can't decide there's been a taking, because that is an agency matter.)
Thankfully, in our home jurisdiction this opinion would be a non-starter. Agencies, state or local, have no jurisdiction to adjudicate constitutional claims. Agencies can't be the judge of their own action. A plaintiff might also want to raise the specter of constitutional defect as an avoidance argument: "you should rule my way, agency, because if you don't, that might be a taking." But making that argument isn't truly asserting a "takings" claim, and certainly can't deprive you of the right to pursue compensation in a court.
You may have an obligation to ripen a claim by utilizing the defendant's administrative process and obtaining a final decision, but you may withhold from agency consideration the constitutional question. You may also have an obligation to develop the underlying factual record in the agency, but that doesn't preclude later litigation in court applying the law to those facts.
After all, an agency "appeal" isn't really an appeal, and the Board of Whatever isn't a court, and Commissioner X isn't really a judge. The Board is, at most, comprised of zoning experts. Not legal experts like a court. An agency appeal is, in our view, simply an process by which the agency decides internally whether it really wants to do something. But apparently in Maryland, when they describe an agency appeal as "quasi-judicial," they really emphasize the judicial. Is there no such thing as separation of powers in Maryland law? Guess not.
Finally, here's why we often read footnotes in a brief or court opinion separately, seriatim. Footnotes are often where the bodies are buried, and where the author responds to the most damaging counterarguments. So too here, we think. Check out footnote 19, which begins on page 71. Caution, it is dense. It spills over and takes up most of page 72. There, the court attempted to distinguish Williamson County's final decision requirement, and Suitum's justiciability requirement (something we're familiar with: see our recent cert petition on that issue). Count us as not convinced.
Maryland Reclamation Assoc., Inc. v. Harford County, No. 52 (Md. Apr. 24, 2020)
