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Friday, July 1, 2016, 1:28 PM

Classic Private Property Rights and Public Coffers

Introduction

In April 2014, we posted a blog discussing the North Carolina Supreme Court’s opinion in Beroth Oil v. NCDOT, 367 N.C. 33, 757 S.E. 2d 466 (2014).  (See here)  In that post, we compared high frequency stock market trading and the Transportation Corridor Act (the “Act”).  We suggested that the Act and high frequency stock market trading serve the same purpose—manipulating market prices to the advantage of traders and the North Carolina Department of Transportation (NCDOT). 

The Act allowed NCDOT to cast the dark shadow of condemnation blight over targeted properties by recording a map in the land records and indexing the map under the names of all property owners whose property was included in the possible future road corridor (“Recordation Right”).  Thereby, all prospective purchasers were on record notice that the property was targeted for possible future forced acquisition.

The recorded map chilled market value—only those who speculated on monetary recoveries in future condemnation lawsuits were prospective purchasers of the targeted property. 

In that earlier post, we noted that two Justices in Beroth Oil dissented and concurred in part with the majority’s opinion.  These Justices were ready to conclude that when a recorded corridor map had interfered with property owners’ rights, an inverse condemnation had occurred.   


Today, our post discusses Kirby v. NCDOT, 2016WL3221090 (June 10, 2016), a unanimous opinion of the North Carolina Supreme Court written by Justice Newby, the justice who wrote the dissenting and concurring opinion in Beroth Oil.

Kirby v. NCDOT

In addition to the Recordation Right, the Act imposes a duty on local governments forbidding them to issue development approvals for property shown within the corridor of a recorded map (“Permit Duty”).  The duration of Permit Duty could be three (3) years after application for a permit and potentially an indefinite period. 

The legal effect of the Permit Duty is the focus in Kirby v. NCDOT, 2016WL3221090 (June 10, 2016). 

Facts and Trial Court Ruling

In Kirby v. NCDOT, the plaintiffs (property owners) filed numerous claims against NCDOT arising from NCDOT’s recordation of corridor maps for Western or Eastern Loops of the Northern Beltway, a planned loop around Winston-Salem, North Carolina.  One of the claims was a claim of inverse condemnation.  NCDOT sought summary judgment on the inverse condemnation claim and the trial court granted summary judgment in favor of NCDOT and dismissed the plaintiffs’ inverse condemnation claim without prejudice as being unripe. 

The North Carolina Court of Appeals

The North Carolina Court of Appeals reversed the trial court.  The Court of Appeals surveyed the law of inverse condemnation, noting that under the power of eminent domain, the sovereign determined the extent of the taking and its duration.

According to the Court of Appeals, both police powers – the power to regulate property to prevent detriment to the general welfare - and eminent domain powers – the power to take property because of its need for public use - reside in the sovereign.

The Court of Appeals noted that the title of the enabling legislation for the Act stated that it was “to control the cost of acquiring rights-of-way,” and that the public detriment the Act avoided—increased acquisition costs—arose only when NCDOT actually committed to constructing the road and sought to acquire the property shown on the corridor map.

The Court of Appeals observed that, a “mere plotting or planning in anticipation of a public improvement is not a taking”.  Kirby 769 S.E. 2d 218, 234, quoting Browning v. N.C. State Highway Comm’n, 263 N.C.130, 135(1964).  However, the Permit Duty barred local governments from approving development on the land identified by a corridor map.  Therefore, the legal effect of recording a corridor map pursuant to the Act was different than a mere plotting or planning in anticipation of a public improvement. 

Accordingly, the Court of Appeals concluded that NCDOT exercised its power of eminent domain when it filed the transportation corridor maps.  The Court of Appeals reversed the trial court and remanded the case to the trial court to consider evidence as to the extent of damages suffered by each property owner as a result of the respective takings and the amount of compensation due to each property owner.

The  North Carolina Supreme Court

The North Carolina Supreme Court affirmed the unanimous decision of the Court of Appeals written by Chief Judge McGee and wrote its own opinion.  The North Carolina Supreme Court concluded:

By recording the corridor maps at issue here, which restricted plaintiffs' rights to improve, develop, and subdivide their property for an indefinite period of time, NCDOT effectuated a taking of fundamental property rights.  Kirby p. 6.

The North Carolina Supreme Court cited three authors of classic private property rights—William Blackstone, John Locke and James Madison.  The Supreme Court emphasized that the fundamental right to property and the jealously guarding against governmental taking of property has existed “from the very beginnings of our republic.”  Kirby p. 4. 

The North Carolina Supreme Court recognized that fundamental private property rights are subject to reasonable regulations  and that “[t]he safety of the people is the supreme law.” Id.  However, “[t]he language of the Act plainly points to future condemnation” and “[t]he…Act’s indefinite restraint on fundamental property rights is squarely outside the scope of the police power.”  Kirby, p. 5. 

The North Carolina Supreme Court directed that the valuation of the property owner’s loss was to be determined by calculating the value of the land before the map was recorded and the value of the land afterwards, taking into account any and all pertinent factors.  

Comments

  1. In Kirby, NCDOT contended that the Act was a regulatory statute and not an eminent domain law.  As reflected by decision of 10 appellate court judges and justices (3 North Carolina Court Judges and 7 North Carolina Supreme Court Justices), NCDOT’s position is wholly unpersuasive in 2015-2016. 

It is easy to stop at this “dead loser argument” conclusion and move to the next case.  But stopping at this conclusion goes only skin deep.  Going deeper provides a more nuanced and meaningful understanding:

a.       In 1987, the General Assembly plainly said it was adopting a law to control public costs for acquiring rights-of-way for the state highway system.  It was an honest declaration of legislative intent and made the courts’ job to discern the purpose of the Act quite simple.

Now, to insulate policy decisions from meaningful judicial review, the General Assembly would likely state its intent as something like “Uniform State-Wide Planning for State Highways”.  Today, people have talking points.

b.       If NCDOT’s arguments in 2015-2016 are so feckless, then why did it take 29 years to declare that the effect of recording a map pursuant to the Act triggered a taking? 

Respectfully, I suggest that the law and world is different now.  With nearly three decades of development of the law of individual private property rights, and the law of various species of takings, the Act was ripe for challenge.

c.       NCDOT’s argument that the Act’s interference with property rights was only for three (3) years after a property owner applies for a development permit is mistaken.  Similar to building a road, private development requires substantial sums of money expended on planning and permitting and there are multiple interrelated permits and approvals issued consecutively.  The world moves quickly and a three-year delay on issuance of a threshold development permit kills most good development ideas. 

  2. It would be wise to note that the North Carolina Supreme Court used the word “fundamental” six (6) times in its six (6) page opinion and cited three great political and legal thinkers.  The discipline of political economy is an important study for lawyers in the 21st century who practice land use law—because political economic philosophy lies behind court decisions—like the operating program running in the background of your computer.

  3.  Not only has law changed, but technology and real estate development practices have changed too.  Today, NCDOT could simply post its corridor maps on the internet and let the marketplace work.  In short, one wonders why the Act is necessary in the 21st century.




Wednesday, June 29, 2016, 4:21 PM

Let's Talk North Carolina Leases: The Name of the Game Is the Correct Name

A lease is a contract.  It is a contract in which the lessor (think, landlord or tenant/sublandlord) grants to another person or entity, called the lessee (think, tenant/sublandlord or subtenant), the right to possess and use a definite portion of land and/or a structure for a definite term in consideration of rental payments, all of which is specified in the lease contract.

A valid lease of real property in North Carolina -- that land, that building on that land, the space in that building on that land -- that exceeds three (3) years in duration from the making must be in writing and signed by the party to be charged in the enforcement of the lease (which can be either lessor or lessee, depending).  This applies to a lease for exactly three years, as well as a lease for a period of less than three (3) years if it can endure for more than three (3) years.  Also, a lease of more than three (3) years in duration must be recorded in order to be effective against purchasers of the property.

Ok, so, generally speaking, a lease in North Carolina should be in writing and should probably be recorded.  But what should the lease say?  Well, there is more discretion between the lessor and lessee in a commercial lease context (see, e.g., Gardner v. Ebenezer, LLC, 190 N.C. App. 432 (2008)) than in a residential context (see, e.g., N.C.G.S. 42-38, et seq.), in terms of what can and cannot be contracted to.  But, any lease in North Carolina must contain the following: (a) the name of the lessor and the name of the lessee, (b) a description of the leased premises, (c) a designation of the term of the lease, and (d) a statement of the rent.  Today, in the first part of this series, we're going to address (a) the name of the lessor and the name of the lessee.

A lease instrument must identify, and identify correctly and carefully, both the lessor and the lessee. The lease needn't necessarily be signed by both parties, but it must identify both parties by name.  Problems can arise when one entity is named (or misnamed) in the lease, and another entity brings suit to enforce the lease.  In American Oil Co., Inc. v. AAN Real Estate, LLC, 232 N.C. App. 524 (2014), the lessee named in the lease was American Oil Group but the action on the lease was initiated by American Oil Company, Inc.  Because the name of the lessee and the name of the plaintiff in the lawsuit on the lease were different, and the plaintiff did not allege any facts in the complaint linking plaintiff American Oil Company, Inc. to lessee American Oil Group, the Court of Appeals held that the plaintiff lacked standing to bring the lawsuit on the lease, to enforce the lease, and affirmed the trial court's dismissal of the lawsuit.

On the other hand, though correct names are critical to a valid lease in North Carolina, courts will pierce a corporate veil where necessary in the enforcement context.  In East Market St. Square, Inc. v. Tycorp Pizza, IV, Inc., 175 N.C. App. 628 (2006), a commercial landlord sued commercial tenant and commercial tenant's sole shareholder claiming breach of lease.  The trial court awarded damages to the landlord and pierced the commercial tenant's corporate veil, resulting in liability of the sole shareholder.  The Court of Appeals affirmed, holding that the corporation was the alter ego and mere instrumentality of the shareholder and that the sole shareholder used the corporate veil to damage the commercial landlord.  A personal guaranty could have saved the need to pierce the veil as to the tenant, here, which is no small judicial task, but personal guaranties aren't always available.

The takeaway is this: name the lessor and the lessee, name each correctly, and apply that same diligence in any enforcement action. Yes, courts will pierce a corporate veil in some instances, such as where the lease names a "puppet" and enforcement requires jurisdiction over the puppeteer, but do not count on piercing; instead, pursue the notion of mutual guaranties.

Next time, we'll talk about premises descriptions.  Aren't you pumped?

I said corporate veil.  CORPORATE VEIL!

Mike Thelen practices in Womble Carlyle's Real Estate Practice Group out of the Firm's Raleigh office. He regularly represents a wide variety of clients, from local governments to businesses, in land use and real estate development litigations and transactions in state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw here and on Instagram at NCLandUseLaw here.

Thursday, June 16, 2016, 3:29 PM

Drilling to the Essence of a Land Use Proceeding

Introduction 
What type of land use proceeding is this?  Finding the correct answer to this question is critical to knowing your client’s rights and avoiding legal error.  Like different sports, there are distinct types of land use proceedings - legislative, quasi-judicial or administrative/ministerial.  Like a sport, the type of proceeding dictates the rules of the proceeding, such as the standards for decision-making, the rules of procedure and other substantive rules.

Similar to comparing basketball to baseball, the differences in “the rules of the game” in different land use proceedings are substantial.   For example, in a legislative proceeding, any person can speak at a public hearing, no speaker is sworn, there is no cross-examination of speakers, the decision-maker enjoys broad legislative discretion, makes only one finding and the decision is reversed by a court only when the record of the rezoning proceeding reveals no plausible basis for the decision.  On the other hand, in quasi-judicial or administrative/ministerial proceedings, every aspect of these proceedings differ with the rules of the game applicable to legislative decisions.

Likewise, the rules of the game between administrative/ministerial verses quasi-judicial proceedings are nearly polar opposite.  In a quasi-judicial proceeding every person (the applicant and other property owners) who suffer special damages are entitled to due process rights, including fair trial protections.  In administrative/ministerial proceedings, a public hearing is not required.    


In some circumstances, the answer is simple.  A traditional rezoning proceeding or ordinance text change is a legislative decision.  Most times, the difficulties arise when a proceeding is not legislative. The recent case of Butterworth v. City of Asheville, 2016WL2865128 (May 17, 2016) illustrates that finding the correct answer requires drilling to the essence of the proceeding.

Butterworth v. City of Asheville 
Facts
The procedural process in Butterworth is ordinary.  A developer files an application for approval of a proposed major residential subdivision.  Neighbors oppose approval of the subdivision.  Initially, the City’s planning staff reviews the developer’s application and thereafter the application is reviewed by a committee of City staff known as the City’s Technical Review Committee (TRC).  The TRC recommends approval of the application to the City’s Planning and Zoning Commission (Commission); the Commission makes the final decision regarding approval of a major subdivision and approves the application.  

A portion of the developer’s application requests a modification of the City’s general design standards relating to the width of the streets within the proposed subdivision.  The developer desires building streets narrower than required by general City standards.

The City’s law authorizes the Commission to allow a modification of general design standards when there is topographical or other unusual physical characteristics that would cause strict compliance with the general standards to be an unusual and unnecessary hardship on the proposed subdivision. 

As part of its general review of the application, the TRC determined that the modification requested by the developer satisfied this standard. The TRC recommended that the Commission approve the modification requested by the developer.  While considering the TRC recommendation at its public meeting, the Commission allowed public comment from concerned citizens but did not conduct a public hearing where witnesses are sworn, parties are allowed to offer evidence, cross-examine witnesses and offer rebuttal evidence.  The Commission approved the modification requested by the developer.

The neighbors opposing approval of the major subdivision filed a petition for certiorari in Superior Court.  The City and the developer filed motions to dismiss the petition and the Superior Court dismissed the petition.  
Ruling and Analysis
The North Carolina Court of Appeals unanimously reversed the Superior Court decision and remanded the case to the Commission for further proceedings.

The Court of Appeals acknowledged that the City’s law expressly states that the Commission’s decision whether to approve a preliminary plat “shall be ministerial in nature.”  Nevertheless, the Court of Appeals drilled down to the portion of the developer’s application requesting approval of a major subdivision and focused exclusively on the grounds and standards stated in the City’s law allowing modifications.

The Court of Appeals reasoned that an administrative land use decision requires only “the mere application of specific, neutral, and objective criteria ….”  Butterworth, p. 6.  Approval of the modification in Butterworth would have been administrative had the grounds and standards stated in the City’s law possessed these qualities.

However, the grounds and standards stated in the City’s law authorizing approval modifications failed to satisfy these qualities.  Because City law required the Commission to exercise some discretion in applying generally stated standards when considering the developer’s request for a modification, the Commission’s decision was quasi-judicial.  Accordingly, the Court directed the Commission “to conduct further proceedings which provide the Neighbors with the level of due process required for quasi-judicial proceedings before that Commission.” Butterworth p. 7.

Comments
1. Because the level of due process rights possessed by parties is determined by the type of land use proceeding, courts are not be bound by custom, practice or labels of local law.  Instead, courts will drill down to the essential quality of each land use decision.

2. Butterworth illustrates the complexity of applying the distinction between administrative and quasi-judicial decisions practically.  It appears that the vast majority of the application complied with “specific, neutral and objective criteria.”  Instead of viewing the process as a whole, the Court of Appeals determined that the correct approach is to search for any aspect of a decision that is not administrative in nature.  Is the Court of Appeal’s remand satisfied by a proceeding that only concerns the modification, or does the Commission rehear the entire application?   Should the developer withdraw its request for a modification, is the prior approval final and no further proceeding is required? 

3. Butterworth reveals that the specific wording of local law describing the grounds and standards for approval of a land use request is critically important.  As the Court of Appeals states, “[t]his is not to say that every decision to allow a modification in a subdivision proposal is quasi-judicial in nature.  Butterworth, p. 5 (emphasis by the Court). Perhaps one factor recognized by the Court of Appeals in Butterworth is that the criteria stated in City law for approving a modification was similar to the criteria stated in state law for granting variances, a classic quasi-judicial decision.




Monday, June 6, 2016, 5:23 PM

Supreme Court Rules Landowners Can Challenge Jurisdictional Determinations

Our partner, Jimmy Kirkland, prepared the below summary of an important United States Supreme Court decision and Mike and I wanted to share it with the readers of our blog.
                                                                                                                                    

                                                                                                     John Cooke
__________________________________________________________

Supreme Court Rules Landowners Can Challenge Jurisdictional Determinations

June 3, 2016

On May 31, 2016, in a unanimous ruling, the U.S. Supreme Court held in USACE v. Hawkes Co. that approved jurisdictional determinations (“JD”) are final actions which can be reviewed by the courts. Under the Clean Water Act a permit is required to discharge pollutants into waters of the United States. Due to the complexity of the statute and implementing regulations and guidance documents it is often very difficult to determine if a particular piece of property contains wasters of the United States. Prior to Hawkes, if a landowner disagreed with a JD they faced potentially significant enforcement action, both civil and criminal, for discharging without a permit or they were required to spend hundreds of thousands of dollars and years to obtain a wetland permit from the Army Corps of Engineers before they could appeal the Corp’s determination that the property was a “water of the United States.”

Hawkes involved three companies in the business of mining peat in Minnesota. In 2010 the Hawkes companies applied for a Section 404 permit to conduct mining operations on a 530-acre tract near their existing operations. The U.S. Army Corps of Engineers (“Corps”) advised that the permitting process would be very expensive and take years to complete. The Corps also advised that if Hawkes wanted to proceed with their application they needed to submit various assessments which would cost an estimated $100,000. In 2012 the Corps issued an approved JD stating the property contained “water of the United States” due to a “significant nexus” to the Red River located 120 miles away. Hawkes sought judicial review but the District Court dismissed holding the JD was not “final agency action.” In 2015, the Eighth Circuit Court of Appeals reversed. In July 2014 the Fifth Circuit Court of Appeals decided that the Corps JDs are not final agency actions subject to judicial review since they did not determine legal rights or consequences.

The Corps’ argued to the Supreme Court that the JD was not “final agency action” and that even if it were there are adequate alternatives for challenging in court. The Corps contended that if Hawkes disagrees with the Corps’ JD, Hawkes can either discharge fill material without a permit, risking EPA enforcement action and can argue that no permit was required during the enforcement process or apply for a permit and then seek judicial review if dissatisfied with the permit. The Supreme Court ruled that neither alternative is adequate. Regarding the enforcement risks, the Court ruled that respondents need not assume such risks while waiting for EPA to “drop the hammer” in order to have their day in count. The Court also rejected the apply for a permit and then appeal by stating “the permitting process adds nothing the JD.”

To constitute “final agency Action, two conditions must be satisfied: First the action must mark the consummation of the agency’s decision making process. The Corps’ agreed this condition was satisfied since an approved JD will remain valid for a period of five years. The second requirement is the action must be one by which rights or obligations have been determined, or from which legal consequences will follow. The Court held the second condition is also met since the approved JD gives rise to “direct and appreciable legal consequences.” The Court noted under an agreement with the EPA, that a “negative” JD stating that a property does not contain jurisdictional waters will generally bind the Corps and the EPA for five years. The Court stated that it follows that affirmative JDs have legal consequences as well.

This is a very important decision for project developers and landowners. Many projects have not gone forward due to the time and costs associated with obtaining a Section 404 permit from the Corps. The Hawkes decision will now provide opportunities for addressing disputes with the Corps regarding Section 404 permitting issues.

Jimmy Kirkland
(404) 879-2460
jkirkland@wcsr.com
271 17th Street SW, Suite 2400
Atlanta, GA 30363

Friday, June 3, 2016, 4:54 PM

The Problem of Wearing Two Caps Simultaneously Part II

Our theme is that nobody looks good wearing two caps simultaneously.   In Part I, we discussed the breach of lease claim asserted by the Town of Beech Mountain (Town) as landlord against Genesis Wildlife Sanctuary (GWS) in the recent case of Town of Beech Mountain v. Genesis Wildlife Sanctuary, 2016WL2646664 (May 10, 2016).  The Town did not prevail on its breach of lease claim.

In Part II, we discuss GWS’s claim of violation of its substantive due process against the Town.  The core of GWS’s substantive due process claim arises from the Town wearing two caps simultaneously – being GWS’s landlord and land use regulator. 


Town of Beech Mountain v. Genesis Wildlife Sanctuary

      A. Facts

In 1999, the Town formed a 30-year lease with GWS for a total rent payment of $1.00.  The lease limited GWS’s use of the property to operation of a wildlife public education that permitted the housing of wildlife.  The Town granted GWS a right to extend the lease for another 30-year term with the same limitation and rent.  The leased property was adjacent to Buckeye Lake (Lake), the Town’s drinking water supply.

GWS built several structures and housed animals for 10 years without disturbance.  After consulting state environmental officials, the Town adopted an ordinance to protect water quality and one of the provisions of the ordinance prohibited the caging or housing of animals within 200 feet of the Lake (“Animal Housing Ban”).  The Town intended this prohibition to bar GWS from housing animals.
                                                                                                                                                                    In August 2010, the Town received a notice from state environmental officials indicating that these officials believed GWS’s operations violated the Animal Housing Ban and the Town may be in violation of state regulations.   The next month the Town began enforcing the Animal Housing Ban against GWS. The Town’s enforcement extended to baring housing animals housed in cages within structures.  GWS took remedial actions by removing all animals and cages from the leased premises, moved its operations to another location and struggled to find uses of the leased premises. 

In March 2012, the Town began enforcing its rights as GWS’s landlord.  The Town claimed that GWS was using the leased property for purposes that violated the law and was failing to make all arrangements for repairs necessary to keep the leased premises in good repair.  The Town brought a claim of breach of lease against GWS and secured a summary ejection judgment.  At that point, the Town had terminated the lease and regained full possession of the property.

GWS appealed the ejectment judgment to District Court, filed nine (9) counterclaims against the Town and transferred the case to Superior Court.  One of these new claims asserted that the Town had violated GWS’s substantive due process rights. 

    B.      Admitted Evidence

The Superior Court admitted evidence showing that (1) the Town’s governing board intended the width of the Animal Housing Ban to be sufficient to bar GWS from housing wildlife; (2) the Town did not inform GWS of its consideration or adoption of the Animal Housing Ban; (3) the Town had no objective scientific evidence to support the width of the Animal Housing Ban; (4) the Town had spilled several hundred thousand gallons of sewage from its lift station into the Lake in several incidents  dating from 2004 to 2010; (5) the Town had received notices of violations from state environmental officials regarding these sewage spills, and (6) The Town “falsely represented” to GWS that the State required removal of animals and cages from the leased premises, “including animals and cages entirely indoors.”  Beech Mountain  p. 2.
    
    C.      The  Superior  Court’s Ruling and Judgment

The Superior Court granted summary judgment in favor of GWS on the Town’s breach of lease claim, overturning the summary ejectment judgment.  The jury returned a verdict, finding that the Town had violated GWS’s substantive due process rights and that the Town had damaged GWS in the amount of $211,142.10. 

The Court of Appeals’ Analysis of GWS’s Substantive Due Process Claim

    A.      The Majority’s Analysis

The majority of the Court of Appeals upheld the Superior Court’s substantive Due Process rulings and the verdict of $211,142.10.

The majority reasoned that (1) substantive due process bars certain arbitrary, wrongful government actions regardless of the fairness of the procedures used by the government, (2) GWS’s substantive due process claim was an “as-applied claim” and challenged how a statute was applied in a particular context, and (3) the facts surrounding the citizen’s particular circumstances were relevant to an as-applied claim.  Therefore, Superior Court did not err when it admitted evidence relevant to the Town’s actions and motives.

The majority found no North Carolina precedent relevant to GWS’s substantive due process claim and adopted three (3) factors from a federal 4th Circuit decision to consider when evaluating the claim.  These factors are:  (A) the zoning decision was tainted with fundamental procedural irregularity, (B) the action targeted a single party, and (C) the action deviates from or is inconsistent with regular practice.  The majority concluded that “it is clear” government actors cannot single out a particular individual or entity for disparate treatment based on illegitimate, political or personal motives.  Beech Mountain  p. 9.   

The majority of the Court of Appeals concluded that GWS presented sufficient evidence to create genuine issues as to whether the Town’s motives were to prevent GWS from using the property for the purposes set forth in their 30-year Lease.  Therefore, the majority affirmed the judgment against the Town. 

    B.      The Minority Analysis

The minority observed that a core function of a municipal government is to enact ordinances for protection of the public water supply and the Town’s ordinance, including the Animal Housing Ban, was facially constitutional.  Although the Animal Housing Ban only affected GWS, there was no evidence that the Town “has irrationally applied the Ordinance to Genesis’ operation and the mere fact that the Town had GWS in mind in drafting the Ordinance does not give rise to an as applied challenge.”  Beech Mountain, p. 17-18 (emphasis by Judge Dillon).  The minority noted that GWS may have breach of contract claims against the Town, such as a breach of lease claim or inverse condemnation claim, but the Animal Housing Ban was not applied irrationally to GWS.  Therefore, Judge Dillon concluded that GWS’s claim of violation of its substantive due process claim failed.

Comments

A. The essence of the problem in Beech Mountain is a government wearing two caps simultaneously.  Both the majority and minority find something wrongful in the Town’s actions when it used police powers to achieve termination of GWS’ lease. 

B.   Assuming that the Town’s motive when adopting the Animal Housing Ban was only to improve and protect the Lake, the Town possessed broad legislative and administrative discretionary powers to protect the Lake without threatening GWS’s quiet enjoyment. Among other actions, the Town could have employed best management practices or installed devices on its property that captured animal waste, the Town could have offered  a substitute location for GWS or worked with GWS to move cages indoors, adopt management protocols or otherwise manage the potential threat to the Lake.

The Town’s actions have been determined to be wrongful and this determination has consequences.  The Animal Housing Ban is practically unenforceable (it applies only to GWS) and GWS has restored to the position it enjoyed before the dispute.  People acting in good faith should be able operate a wildlife education center and protect the Lake too. 

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