Missouri Right-to-Farm statute upheld by Missouri Supreme Court

by Hannah Dankbar and Gary Taylor

Labrayere v. Bohr Farms
Missouri Supreme Court, April 14, 2015

Multiple landowners filed suit against Cargill Pork LLC and Bohr Farms alleging damages for temporary nuisance, negligence and conspiracy due to odors coming from a concentrated feeding animal operation (CAFO) owned and operated by Bohr Farms. The landowners who filed the complaint claimed that they lost the use and enjoyment of their property.  Neither rental value nor medical conditions were issues raised by the landowners in this case. The circuit court found that Bohr Farms was not responsible for paying damages.

In 2011 section 537.296 went into effect. This statute supersedes common law related to actions that result in an alleged nuisance coming from a property that is used primarily for crop or animal production. This statute prohibits non-economic damage recovery for items such as loss of use and enjoyment of property, inconvenience or discomfort that the agricultural nuisance caused, and allows recovery only for a diminished market value of property and documented medical costs.  Only a few days after the statute was passed Bohr Farms began their CAFO operation that can feed 4,000 hogs. Bohr owns and operates the CAFO and Cargill owns the hogs. The CAFO includes an on-site sewage disposal system as well as a system for composting deceased hogs. The plaintiffs raised seven constitutional issues. Appellants claimed that section 537.296 is unconstitutional for seven reasons.

 

Constitutional Claims

  1. Section 537.296 impermissibly authorized an unconstitutional private taking.  Plaintiffs argued that the statute, “effectively provide[s] the right of eminent domain to private companies.” The Court stated that, “The fact that private parties benefit from a taking does not eliminate the public character of the taking so long as there is some benefit to any considerable number of the public.”  A use is public if it reasonably likely to create some advantage or benefit for the public.  The Court noted that the statute did not authorize any private party to create a nuisance.
  2. Section 537.296 authorized a taking without requiring just compensation. Under the statute all nuisance claims following the initial temporary nuisance claim are to be considered a permanent nuisance. The plaintiffs claimed that this essentially grants an easement for the respondent to interfere with the full use and enjoyment of their land. The court found this argument was not ripe because the appellants were only seeking relief for a temporary nuisance in this case. The court noted that the statute specifically allowed the recovery of damages for loss in rental value of impacted property when a temporary nuisance was present.  That satisfied the constitutionally required just compensation when a temporary nuisance amounts to a temporary taking.
  3. Section 537.296 violated the plaintiffs’ constitutional right of equal protection. The plaintiffs claimed that the statute creates a suspect class of “rural landowners and residents” and therefore the statute should have to withstand strict scrutiny. Historically, rural landowners have not been oppressed and the statute benefits rural landowners who use their land for agricultural purposes, so there is no suspect class. The argument related to the fundamental right to property conflicts with the established right of the state to confiscate property to “substantially advance a legitimate state interest.” Therefore, the statute only has to withstand the rational basis test. The Court presumes the state has a rational basis for this statute and the appellants had to demonstrate a “clear showing of arbitrariness and irrationality” before the statute can be declared unconstitutional.
  4. Section 237.296 violates due process. This argument relied on a finding that a fundamental right had been violated, but the Court already determined there was no fundamental right violated.
  5. Section 537.296 violates separation of powers. The appellants claimed that the statue requiring a person to have “ownership interest” in order to have standing is a judicial decision that the legislature did not have the power to make. Nobody in this case was denied standing because of this, and none of the plaintiffs were injured as a result of this part of the statute. The court will not rule on hypothetical questions of standing.
  6. Section 537.296 violates the open courts clause. Article I, section 14 of the Missouri Constitution guarantees “the right to pursue in the courts the causes of actions the substantive law recognizes.” The plaintiffs’ asserted that the statute denied access to the court to “lawful possessors and occupiers of land”; however, the plaintiffs did not claim that the statute restricts access to the courts, so they did not have an argument to support this claim.
  7. Section 537.296 is an unconstitutional special law. Finally, plaintiffs argued that this statute “benefits only the corporate farming industry.” Article III, section 40 of the Missouri Constitution does not allow the legislature to enact “special laws” when a general law will work. Special laws, “includes less than all who are similarly situated… but a law is not a special if it applies to all of the given class alike and the classification is make on a reasonable basis.” The court said that the landowners that can take advantage of the statute could change, as could the land uses.  The open-ended classification, the Court noted, was reasonable because it advanced the legitimate state purpose of promoting the agricultural economy.

Plaintiffs argued that, according to a negligence or conspiracy cause of action, they should receive “use and enjoyment” recovery. They also argued that there are not enough facts to demonstrate that Cargill was not vicariously liable for Bohr’s alleged negligence. The statute allows people to recover non-economic “use and enjoyment” damages only if their negligence and conspiracy claims are “independent of a claim of nuisance.” The court found that Appellants’ negligence, conspiracy and vicarious liability claims were not “independent of a claim of nuisance” because those claims were dependent on the nuisance claims.

The ruling of the circuit court was upheld.

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

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 Heritage Value statute declared constitutional; family awarded $2 million in eminent domain proceeding

by Gary Taylor

St. Louis County v. River Bend Estates HOA
(Missouri Supreme Court, September 10, 2013)

The Missouri Heritage Value statute (statute) was adopted by the Missouri legislature in 2006.  It provides for additional compensation for the exercise of eminent domain over homesteads, and properties held within the same family for 50 or more years.  If a property has been owned within the same family for 50 or more years, “just compensation” is determined by statute to be fair market value plus an additional 50 percent (“heritage value”), thus equaling 150 percent of fair market value.

St. Louis County condemned 15 acres of property for a highway extension project.  The property was deeded to Arthur Novel in 1904, who farmed it with his wife until their deaths in 1968.  It stayed in the family and was owned by the Novels’ descendents until the condemnation proceedings.  The condemnation court awarded the descendents $320,000 for acquisition of the property, and an additional $160,000 for heritage value, resulting in a total award of $480,000.  The descendents appealed, and at trial the jury awarded them $1.3 million, to which the court added $650,000 for heritage value for a total award of approximately $2 million (including interest).  The county appealed.  Because the challenge was to the constitutionality of the statute the appeal went directly to the Missouri Supreme Court.

The bulk of the opinion addressed numerous evidentiary and procedural issues, but the Court did eventually address the County’s  three constitutional challenges: (1) the statute impermissibly altered the judicial definition of “just compensation” by permitting the addition of heritage value to fair market value; (2) the statute requires condemning authorities (in this case, the County) to expend public funds without a public purpose in violation of the Missouri Constitution; and (3) the statutory requirement that a judge compute heritage value invades the province of the jury to determine just compensation – also in violation of the Missouri Constitution.

Definition of “just compensation.”  The Missouri Constitution declares that “private property shall not be taken or damaged for public use without just compensation.” The US Supreme Court has interpreted “just compensation” to mean the fair market value of the property at the time of the taking.  The County argued that constitutional interpretation is the province of the judiciary, not the legislature.  The Court did not disagree; noting, however, that the statute does not alter the definition of “just compensation,” but rather “provid[es] additional benefits to certain property owners whose real property is taken for public use.” It cited US Supreme Court cases that “support the proposition that a legislature may compensate losses and damages beyond those traditionally included in its interpretation of ‘just compensation.'”  “‘Just compensation’ is a minimum measure that must be paid, not a maximum one.”

Expenditure of public funds.  Missouri Constitution Article III, Section 38(a) states that the legislature “shall have no power to grant public money or property …to any private person, association or corporation….”  The County asserted that compensation payments beyond the constitutional minimum serve no public purpose and are therefore unconstitutional.  To determine whether there is sufficient public purpose behind a grant of public money the Missouri courts have employed the “primary effect” test.  This test allows expenditures whose primary object is to serve a public purpose, even if it involves as an incident an expense which, standing alone, would not be lawful.  The Court determined that the primary purpose of the expenditure was to acquire property for a public purpose, and that the payment for heritage value is merely incident to that public purpose.

Computation by judge of heritage value.  Missouri Constitution Article I, Section 26 requires that just compensation “be ascertained by a jury.”  The Court quickly dismissed this argument by noting its previous declaration that heritage value is a payment in addition to “just compensation” – not part of the just compensation calculation.

The Court upheld the roughly $2 million jury award.

Realtors Association has standing to challenge rental licensing ordinance

by Gary Taylor

St. Louis Association of Realtors v. City of Ferguson
(Missouri Supreme Court, October 25, 2011)

In 2006, the City of Ferguson enacted an ordinance that created a regulatory fee and licensing system for owners of residential property within Ferguson who lease or rent their property to others.  To qualify for a rental license, property owners must undertake building inspections, file affidavits stating whether any adult tenants are registered as sex offenders, retain a property manager residing within 25 miles of the rental property and pay licensing fees. The ordinance makes it unlawful for property owners to rent or lease their property without a license.

The St. Louis Association of Realtors (Association) is a trade association with approximately 9,000 members in the St. Louis metropolitan area. The association challenged the validity of the ordinance on both constitutional and statutory grounds. Its petition asserted that it has associational standing on behalf of its members because some of those members are affected by the ordinance directly, because it has an interest in protecting private property rights of the type affected by the ordinance, and because the relief it requested is a declaration that the ordinance is invalid rather than damages and so, its suit does not require joinder of individual members.  The trial court dismissed the association’s petition, determining that it lacked standing to bring suit.  The association appealed.

According to the Missouri Supreme Court “Reduced to its essence, standing roughly means that the parties seeking relief must have some personal interest at stake in the dispute, even if that interest is attenuated, slight or remote.  A legally protectable interest exists only if the plaintiff is affected directly and adversely by the challenged action or if the plaintiff’s interest is conferred statutorily….An association that itself has not suffered a direct injury from a challenged activity nevertheless may assert ‘associational standing’ to protect the interests of its members if certain requirements are met. The association must demonstrate that (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.”

The Missouri Supreme Court determined that the association had associational standing.  The association satisfied the first prong of the test because some of its members are property owners in Ferguson and, so, would have standing in their own right to challenge Ferguson’s ordinance. Specifically, three realtor-members testified that they own rental property within Ferguson and, as such, have felt a direct impact from the various requirements imposed by the ordinance.  The Court disagreed with the city’s assertion that a majority of an association’s members must be able to prove standing in their own right.

In assessing the association’s satisfaction of the second prong the Court observed that the relevant question is whether the basis on which the individual association members were found to have standing under the first prong also is germane to the association’s purpose.  “Mere pertinence between litigation subject and organizational purpose is sufficient. Requiring otherwise would undermine the primary rationale of associational standing, which is that organizations are often more effective at vindicating their members’ shared interests than would be any individual member.” The association supported its claim that it has an organizational interest in protecting property rights by introducing its by-laws, and mission statement, which both contain statements about the association’s stated purpose to protect members’ and homeowners’ property interests. The association also presented evidence that the association regularly engages in lobbying activities and fundraising to advance the interests of its members, including their interest in protecting real property rights. Further, two association representatives testified that the organization has initiated or participated in litigation challenging ordinances or defending its members cited for violating ordinances deemed objectionable to the association’s mission of protecting property rights.

Finally, the Court concluded that the third prong was met because the association merely sought prospective relief via a declaratory judgment that Ferguson’s ordinance was invalid. It was not pressing for damages or other relief that would require joinder of individual association members. “Where an association seeks only a prospective remedy, it is presumed that the relief to be gained from the litigation will inure to the benefit of those members of the association actually injured.”

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