Divided Ohio Supreme Court finds that state law preempts city ordinances regulating oil and gas drilling

February 26th, 2015

by Gary Taylor

State ex rel. Morrison and the City of Munroe Falls v. Beck
Ohio Supreme Court, February 17, 2015

Beck Energy Corporation obtained a permit from the Ohio Department of Natural Resources to drill an oil and gas well on property within the corporate limits of the City of Munroe Falls. When Beck Energy began drilling, the City filed a complaint seeking injunctive relief and alleging that Beck Energy was violating several provisions of the Munroe Falls Codified Ordinances. These provisions included a zoning ordinance requirement for a zoning certificate for land disturbing activities within the city, and four ordinances directly relating to oil and gas wells and drilling. The trial court issued a permanent injunction prohibiting Beck Energy from drilling until it complied with all local ordinances. The Ohio Court of Appeals reversed the trial court, concluding that state law preempts local control over the permitting, location, and spacing of oil and gas wells and production operations within the state of Ohio.  Munroe Falls appealed to the Ohio Supreme Court.

In a 4-3 opinion, The Ohio Supreme Court affirmed, holding that the Home Rule Amendment does not grant the City the power to discriminate against, unfairly impede, or obstruct oil and gas activities and production operations that the State has permitted under chapter 1509.  Ohio R.C. 1509.02 gives state government “sole and exclusive authority” to regulate the permitting, location, and spacing of oil and gas wells and production operations within Ohio.  In 2004, the General Assembly amended Chapter 1509 to provide “uniform statewide regulation” of oil and gas production within Ohio and to repeal “all provisions of law that granted or alluded to the authority of local governments to adopt concurrent requirements with the state.” The majority of the Court found that the preemption clauses of R.C. 1509.02 clearly prevent local governments from imposing their own regulations on the oil and gas industry.

In his dissent, Justice Lanzinger countered that “the broad language of a preemption clause is not sufficient to create a conflict. We have never held that a preemption statement alone is sufficient to divest municipalities of their constitutional right to home rule. To the contrary, a declaration by the General Assembly of its intent to preempt a field of legislation ‘does not trump the constitutional authority of municipalities to enact legislation pursuant to the Home Rule Amendment, provided that the local legislation is not in conflict with general laws.'”  Justice Lanzinger pointed out that Chapter 1509 does not specifically preempt local zoning, and also argued that the local ordinances of Munroe Falls do not present specific conflicts with Chapter 1509.

Joining in Justice Lanzinger’s dissent, Justice O’Neill went on to write:
Let’s be clear here. The Ohio General Assembly has created a zookeeper to feed the elephant in the living room. What the drilling industry has bought and paid for in campaign contributions they shall receive. The oil and gas industry has gotten its way, and local control of drilling-location decisions has been unceremoniously taken away from the citizens of Ohio. Under this ruling, a drilling permit could be granted in the exquisite residential neighborhoods of Upper Arlington, Shaker Heights, or the Village of Indian Hill—local zoning dating back to 1920 be damned.

 

Home Rule, Ohio courts, Preemption , , ,

This week at the Iowa legislature

February 24th, 2015
Comments Off

SF278, formerly SF25, authorizes a city or county to provide a property tax exemption for value added by improvements to residential property that is a public nuisance.

SF243 would remove the exemption for farm houses from county building codes and county zoning regulations.

HF268 adds watershed management authorities to the list of eligible applicants for local watershed improvement grants.

HF249, a companion to SF 128, would amend the requirements for establishing, financing, and dissolving Rural Improvement Zones..

Iowa legislation

Legally sufficient hearing must allow public comment on the underlying reason for the requested zoning amendment

February 23rd, 2015

by Hannah Dankbar

Campbell, et al., v. Franklin County and Union Electric Company d/b/a Ameren Missouri
Missouri Supreme Court, February 3, 2015

Multiple individuals joined the Labadie Environmental Organization (LEO) to file a writ of certiorari claiming that Franklin County Commission made errors in their adoption of zoning amendments that would allow Union Electric Company to build an ash-coal landfill next to its power plant in Labadie.

The organization made two claims on appeal: (1) the commission did not conduct a legally sufficient hearing before adopting the zoning amendments that would allow the coal-ash landfill, and (2) the court erred in finding that the zoning amendments were promoting public health, safety and welfare and are therefore valid.

Ameren (the owner of the Labadie Power Plant) publicly announced the proposal to build the coal-ash landfill on the land next to the power plant. The plant is the only public utility power plant in Franklin County and the only possible location for the coal-ash landfill. LEO alleges that the chairman of the Planning and Zoning Commission told speakers at the public hearing that they could not discuss Ameren or the proposed site for the landfill, and that county officials “interrupted speakers when they attempted to discuss Ameren’s proposed Labadie landfill site…”  LEO alleges that placing limitations on what the public was allowed to speak about meant that the county had not conduced a legally sufficient hearing.

After LEO filed their petition, the court asked the county to produce records from the meeting. The county did, and the commission and Ameren filed motions to dismiss for failure to state a claim. The court dismissed the first count of LEO’s petition and determined that the zoning amendments were valid.  LEO appealed.

The Missouri Supreme Court noted that the statute does not expressly provide whether a public hearing is required, nor does it explicitly define what constitutes a “hearing.”   The Court concluded first that it would be “nonsensical” to require public notice of a non-public hearing.  The hearing, therefore, was a public hearing.

Following that is the question whether the public hearing was insufficient because the commission precluded the public from addressing Ameren’s proposed coal-ash landfill.  A dictionary definition of “hearing” is “a session…in which testimony is taken from witnesses,” “an opportunity to be heard to present one’s side of a case, or to be generally known or appreciated,” and “a listening to arguments.”  Given the plain language meaning of the word “hearing,” the Court concluded that the legislature intended for members of the public to be able to present their side of the case.  The hearing, therefore, should be conducted so that the public can address the subject matter of the proposed zoning amendments.  Assuming LEO’s allegations are true, the manner in which the hearing was conducted arguably denied the citizens of Franklin County a fair opportunity to be heard and to present their side of the case.  It prevented them from discussing the actual, underlying subject of the amendments.

The Missouri Supreme Court remanded the case to the circuit court to direct the county to hold a legally sufficient hearing.

 

Missouri Courts, Procedural Issues , ,

Classification of land as “urban,” “suburban,” or “rural” for annexation purposes is question of law

February 19th, 2015

by Gary Taylor

SID No. 196 of Douglas County v. City of Valley
Nebraska Supreme Court, February 6, 2015

Valley, Nebraska is a city of the second class located between Omaha and Fremont. Cities of the second class are permitted by state law to annex contiguous or adjacent lands that are urban or suburban in character and not agricultural lands that are rural in character.

In November 2010 the Valley City Council passed three ordinances to annex three different areas near Valley. The subject of this litigation was Ordinance No. 611, which annexed six different areas near the city. One of these areas, commonly known as Ginger Cove subdivision, contained Sanitary Improvement District (SID) 196. The area is almost completely developed, with 155 residential homes surrounding a sandpit lake. At the time Ordinance 611 was adopted it did not share any common borders with Valley, but did share borders with two other areas being annexed under Ordinance 611. The other areas subject to Ordinance 611 contained residential developments, and operating and exhausted sand and gravel mines (owned by Lyman-Richey (L-R)), and were developed to varying degrees.

In 2006 SID 196 and L-R entered into an agreement with Valley, agreeing to pay the city for the cost to construct a lift station and force main to route wastewater from the properties to the regional pumping station in the city. SID 196 and L-R reserved the capacity for 233 residential lots to use the wastewater system, in contemplation of the development of a residential community. Valley took out $4.5 million in bonds to finance regional pumping stations and the force main to move wastewater to the treatment facility in Fremont, and charges the subdivision residences a fee for use of the sewer system.

Prior to Ordinance 611, the area to be annexed was served by fire and paramedic services from Valley. The Douglas County Sheriff provided police services with Valley Police Department as secondary responder. Snow removal was conducted by Douglas County. Valley would assume all provision of services after the annexation.

SID 196 challenged Ordinance 611, alleging that (1) some land within the subdivision (where SID 196 operates) is not urban or suburban in character; (2) it fails to meet the contiguous or adjacent requirement, and (3) the area was annexed for an improper purpose.

Character of area. In the trial court, the experts for the two sides agreed on the physical nature of the land, how it is being used, the number of residences, and all other facts regarding the area; however, they came to different conclusions about how the land should be classified under the statute. The Nebraska Supreme Court noted that the issue of how the land should be classified is a question of law. The question of law is one for the court to decide. The fact that the experts came to two different legal conclusions based on the same set of facts does not create “a material issue of fact” which would be required to defeat summary judgment.

SID 196’s expert determined that the property was not urban or suburban because the property was being used for mining operations, and because the property was zoned transitional agriculture. The Court disagreed. Mining has traditionally never been considered an agricultural use of property. L-R’s actions prior to Ordinance 611 indicated that the properties would eventually be used for residential development. Furthermore, zoning does not dictate the ability to annex. The Court found no merit to the claim that the land in question was agricultural and rural in character.

Contiguous or adjacent. Generally, a municipality may annex several tracts as long as one tract is substantially adjacent to the municipality and the other tracts are substantially adjacent to each other. SID 196 argued that the present circumstance was a case of “strip annexation” – annexing a strip of land in order to reach a larger parcel – which the Nebraska courts have disfavored. The focus of strip annexation court cases is on the extent to which the city shared a border with the land to be annexed; it is not solely on the shape of the tract to be annexed.

SID 196 argued that the annexation of a large, largely undeveloped parcel, to connect a large, developed parcel was strip annexation, but the Supreme Court found no authority to impose a “community of interest” requirement on an annexation. The annexation as a whole – looking at all parcels together – met the contiguous or adjacent requirement of the statute.

Purpose of annexation. Case law in Nebraska is clear that it is improper for an annexation to be solely motivated by an increase in tax revenue. SID 196 argued that Valley was motivated by SID 196’s extremely low debt, and pointed out that another SID was not chosen because it had a much higher level of debt. The Supreme Court said that debt level has no relation to raising tax revenues. Valley was motivated, at least in part, to equalize the burden among city residents and SID 196 in financing the recent sewer system improvements. It would be “fiscally irresponsible” for the city not to at least take debt levels into consideration before annexing territory.

 

Annexation, Nebraska courts ,

Iowa Legislative update – Second this week

February 18th, 2015

Bills recently introduced:

HF208 allows the inclusion of of residential property in new or amended self-supported municipal improvement districts (SSMIDs), and allows cities to amend existing ordinances creating the SSMID to tax the residential property as part of the SSMID (with exceptions).

SF233 does a lot of things, but relevant to city planning it adds due process and clarity to the process for addressing abandoned nuisance properties, and expands the reach of the process to commercial properties (currently applies only to residential properties).

Iowa legislation

Iowa legislative update

February 17th, 2015

Two more bills introduced:

SSB1175 would change the variance standard from unnecessary hardship to practical difficulties, and allow a city, by ordinance, to give decision-making authority for special exceptions to a body other than the zoning board of adjustment (presumably the planning and zoning commission)

HF195 limits the grounds for designating an area as an urban revitalization area, striking many of the stated reasons for such a declaration from Iowa Code 404.1(2).  Also amends approval requirements.

 

Iowa legislation

Concrete wall 9 feet high, 800 feet long just may be a spite fence

February 16th, 2015

by Hannah Dankbar and Gary Taylor

Bennett, et al,  v Hill
Montana Supreme Court, February 3, 2015

Lot owners of the Lake Hills Subdivision complained about a wall constructed by Lake Hills Golf Course, LLC. The wall is located within the subdivision and adjacent to the lot owners’ properties.

The “Declaration of Restrictions” for the subdivision was created and approved in 1958. Any lot owner has power to enforce the restrictions. Lake Hills Golf, LLC got their land in the subdivision through a warranty deed in 2009. Part of the deed specified that the golf course be subject to the restrictions and any amendments.

In early 2011 Hill, the owner of the Golf Course applied for a zoning change to multiple lots he owned in Lake Hills Subdivision. Other lot owners in the subdivision opposed the change in zoning, resulting in Hill withdrawing his application. The lot owners said their relationship with Hill was damaged.

Late in 2012, Hill applied for a building permit from the City of Billings. He wanted to build the wall that is the subject of this case. He received the permit and built a $40,000 wall of concrete and rebar. The wall is nine feet tall and is set approximately ten feet from the border between the Golf Course property and the opposed lot owners’ property. The wall runs parallel to the properties and is approximately 800 feet long, with a 2-foot jog perpendicular to its length at 40-foot intervals. The lot owners claimed that the wall violated the Restrictions, the wall constituted a nuisance, and also constituted a spite fence.  The lot owners sued Hill in district court, but lost on all issues on summary judgment.  The property owners appealed the court ruling.

On appeal the Montana Supreme Court considered multiple issues:

1.Did the District Court err by granting summary judgment in favor of Hill on the issue of whether the wall constituted a spite fence?

A “spite fence” is one that provides no benefit to the person erecting the fence (erected solely for spite).   The district court found that the wall benefited the golf course by discouraging trespassers and preventing trash from blowing onto the course. The Supreme Court noted, however, that the lot owners presented affidavits that they had never observed trespassers or trash cross the golf course property from their properties, and they never received complaints of this happening. One of the Plaintiffs also stated that Hill had told him that the wall was built because the Plaintiffs’ properties were unattractive. Viewed in a light most favorable to the property owners, the district court should have allowed the spite fence claim to proceed to trial.

2. Did the District Court err by granting summary judgment in favor of Hill on the issue of whether the wall constituted a nuisance?

The district court found that since there was no issue of the wall serving a “reasonable purpose”(stopping trash and trespassers) there is no legal argument that it constitutes a nuisance. The Supreme Court found this to be an incorrect interpretation of the law. The Court stated:

A beneficial or reasonable purpose will not immunize something that would otherwise constitute a nuisance from being ruled a nuisance. Montana statute states that “[a]nything that is injurious to health, indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property . . . is a nuisance.” Section 27-30-101(1), MCA (emphasis added). Although there are exceptions for farming operations, activities authorized by statute, and noises from shooting activities at shooting ranges, Montana statute does not otherwise limit this broad definition of what may or may not constitute a nuisance.

The Supreme Court was unwilling to rule that anything that has a beneficial or reasonable use cannot also be a nuisance (at the same time noting that the question of the fence being a reasonable use was still unresolved), and reversed the district court on its grant of summary judgment on the nuisance claim.

3. Did construction of the wall violate the Subdivision Restrictions?

Paragraph 6 of the Restrictions states:

6. No fence or wall shall be erected or maintained on any lot, nor any hedge planted or maintained on any lot until written authority therefore has been secured from the Architectural Control Committee (ACC), which shall have authority to prescribe the location, height, design and materials used.

Hill claimed that the provisions of paragraph 6 of the Restrictions have been waived and are therefore unenforceable against them. To prove waiver of a covenant, it must be demonstrated that the other party knew of and acted inconsistently with the covenant, and that prejudice resulted to the party asserting waiver.  It may be either express or demonstrated by a course of conduct. If demonstrated by a course of conduct, waiver will “depend upon the circumstances of each case and the character and materiality of the permitted breach.”  Despite that fact that the ACC had never met or approved a construction project of any kind, and “the vast majority of the residences and structures within the subdivision were built without approval from the ACC,” such facts do not establish that breaches occurred of the character and materiality necessary to establish waiver.  Indeed, there was no indication that any fences, walls or hedges had ever been constructed (or even exist) in the subdivision.

Finally Hill argued that paragraph 16 is an exception to paragraph 6 and allows them to build the wall. Paragraph 16 reads:

16. If used as a public or private golf course, country club, or park, any structure incidental to such use, including but not limited to clubhouse, swimming pool, tennis courts and other recreational facilities, storage shops, and repair and maintenance facilities and shops, may be maintained and erected on any of the said tracts.

The Supreme Court found that it was a genuine issue of material fact as to whether the wall was “incidental” to the use of the property as a golf course, noting again the lack of evidence that trash or trespassers had ever crossed the property.

The Supreme Court reversed all of the district court’s rulings favoring Hill, and remanded for trial.

Covenants and deed restrictions, Montana courts, Nuisance , , ,

News from around Nebraska: Bill in NE legislature considers scoring system for siting livestock operations

February 13th, 2015

The Nebraska legislature is considering instituting a scoring system that would give county officials a way to factor in considerations like odor and manure control, as well as economic impact, when making decisions on siting livestock operations.  The ultimate decision-making authority would still remain with the county.  “Allow them to go step by step and document the fact they’re using science to deny or grant a permit. I’m very favorable of it. I’m all about improving the situation for agriculture and especially in livestock in Nebraska,” said Senator Watermeier, who introduce the bill, LB106.

An article from NTV is here.

The text of LB106 is here.

Agricultural Uses/Agricultural Exemption, current news, Nebraska legislation ,

Dust, noise from bridge project did not give rise to taking or public nuisance claims

February 11th, 2015

by Hannah Dankbar and Gary Taylor

Sommer v Ohio Department of Transportation
Ohio Court of Appeals, Tenth District, December 23, 2014

In 2007 Nick Sommer and Alyssa Birge bought a home in the Tremont neighborhood in Cleveland. In 2010 the Ohio Department of Transportation (ODOT) started construction to replace the “Innerbelt Central Viaduct truss bridge.”

The first phase of the project was to realign the sewer system.  This phase of the project ran from September 2010 to July 2011. The construction was coordinated between ODOT and Northeast Ohio Regional Sewer District (NEORSD). This phase of construction took place around Sommer’s home and resulted in “construction noise” and the closure of traffic lanes around Sommer’s home. The driving of piles into bedrock for the westbound bridge “create[d] a loud banging sound.”  In June 2012 Sommer filed a complaint against ODOT complaining that the construction resulted in “extreme noise, pounding and vibrations *** separate and distinct from that experience by other affected properties,” and causing his home to be uninhabitable.  Sommer sought declaration of inverse condemnation, as well as a public and private nuisance.  The Court of Claims filed an entry granting ODOT’s motion for summary judgment.

Sommer claimed that the Court of Claims was wrong by (1) not examining their inverse condemnation (takings) claim under the proper legal standard, and (2) granting summary judgment in favor of ODOT on their takings claim.

Sommer argued that the proper analysis for the takings claim was the three-part test set forth by the US Supreme Court in 1978 in Penn Central Transportation Co. v New York:

[w]here a regulation places limitations on land that falls short of elimination all economically beneficial use, a taking nonetheless may have occurred, depending on a complex list of factors including (1) the regulation’s economic effect on the landowner, (2) the extent to which the regulation interferes with reasonable investment-backed expectations, and (3) the character of the government action.”

ODOT countered that because Sommer waited until the appeal to raise this claim, it should not stand.  The Court of Appeals agreed, noting that Sommer’s response to ODOT’s summary judgment motion contained no citation to either Penn Central, or to its three-part test.  It also noted that the lower court did analyze Sommer’s claim under Ohio state caselaw, specifically a 1966 case that recognized a taking as “any direct encroachment upon land, which subjects it to a public use that excludes or restricts the dominion and control of the owner over it.”  The Court of Appeals found no error by the lower court.

The next claim on appeal is that the Court of Claims was wrong to interpret the Ohio law that requires a physical invasion of property or a complete denial of access and that issues of material fact still remain as to whether ODOT substantially interfered with appellants’ use and enjoyment of their property in such a degree as to amount to inverse condemnation. While Sommer complained about how the construction “prohibits you from relaxing completely,” he was never denied access to his property and did not claim any physical damage to his property, prerequisites to an inverse condemnation claim per Ohio caselaw.  “An increase in vibration and dust caused by a highway improvement, both from the construction and from the increase in traffic from the expanded highway, is not compensable as a taking.”  It is assumed that once the construction is complete Sommer will be able to enjoy his property as he did before the construction.

Finally, among Sommer’s other claims he alleged that “a genuine issue of material fact exists regarding whether the harm suffered by appellants was different in kind than suffered by property owners.”  Ohio defines a public nuisance as “an unreasonable interference with a right common to the public.” A private individual does not have standing to claim a public nuisance unless the individual can show that they suffered an injury or damage that was not incurred by the general public. The Court of Appeals reviewed the uncontroverted evidence that the inconveniences experienced by Sommer were also experienced by others in the neighborhood, and concluded that since Sommer failed to show how the harm done to his is different than the harm to others in the neighborhood his claim cannot stand.

Nuisance, Ohio courts, Takings , , ,

Land use-related bills introduced in Iowa Legislature

February 9th, 2015

We are approximately one month into the Iowa legislative session, and the following land use-related bills have been introduced thus far.  None are past subcommittee stage.

SF152 - Provides, among other things, that the authority to condemn property is not conferred on an acquiring agency unless the governing body for the acquiring agency first approves the final route or site location and design of the proposed public improvement (think “pipeline”).

SF128 - Amends the requirements for establishing, financing, and dissolving Rural Improvement Zones.

SF25 - Authorizes a city or county to provide a property tax exemption for properties declared to be public nuisances in the amount of the actual value of improvements added to the property.

HF59 – Preempts local regulation of firearms,  firearm accessories, and ammunition.  Makes an exception for “the enactment or enforcement of a generally applicable zoning or business ordinance that includes firearms businesses along with other businesses, provided that an ordinance designed or enforced to effectively restrict or prohibit the sale, purchase, transfer, manufacture, or display of firearms, firearm accessories, or ammunition otherwise lawful under the laws of this state, which is in conflict with this section, is void.”

HF161 – Prohibits cities, after January 1, 2016, from adopting or enforcing “any regulation or restriction related to the occupancy of residential rental property that is based upon the existence of familial or non-familial relationships between the occupants of such rental property.”

Iowa legislation ,