Wednesday, February 6, 2013

Ripeness for Takings Challenges in Florida Just Got Trickier

As if takings law weren't convoluted enough, it looks like a split has developed within Florida intermediate appellate courts over when takings challenges are ripe for review. For non-takings-geeks, that means that Florida courts now disagree about when you can ask a court to consider whether the government has taken your property without just compensation.

In Alachua Land Investors, LLC v. Gainesville, - So. 3d -, 2013 WL 363376 (Fla. 1st DCA Jan. 31, 2013), the 1st DCA put up a huge roadblock for plaintiffs pursuing takings claims. A developer made one plat application that was rejected by the local government, which apparently made some overtures that it might possibly, one day, you know, maybe consider other development proposals. Instead of negotiating further with the government, the developer sued for a taking.

The trial court held that the claim was not ripe for litigation, and the 1st DCA agreed. The court explained that the developer needed to prove: "(1) the regulation denies substantially all economically beneficial or productive use of the land; (2) alternative uses were applied for and conclusively denied by the regulatory body; and (3) at least one meaningful application has been filed under the existing regulations."

The government argued that the developer's application was not meaningful, and that the government's decision was not final. As for the meaningfulness of the application, the court strangely says that because the developer didn't explore the full range of government discretion, the application wasn't meaningful:
Given the existing zoning regulations, ALI's request to construct a sewer pipe through the conservation area and across the creek was bound to fail. The petition was not a meaningful application, for it denied the City an opportunity to exercise its full discretion in determining how ALI can implement the development plans for Phases Two and Three. See Palazzolo, 533 U.S. at 620–21. ALI premised its proposal on a prohibited use in the conservation area that was self imposed as a result of the negotiated settlement. The City is simply enforcing the terms of the landowner's settlement agreement, which were incorporated into the Master Plan and the zoning regulations. 
ALI took an inflexible, all-or-nothing approach in seeking approval of Petition 76SUB. The plat application presented no alternative design plan, nor did ALI seek to revise the application after the City's vote. “Land use planning is not an all-or-nothing proposition.” MacDonald, Sommer & Frates, 477 U.S. at 347 (noting that “[a] governmental entity is not required to permit a landowner to develop property to [the] full extent he might desire or be charged with an unconstitutional taking of the property”). Good faith and reasonableness are integral elements of any meaningful application. See Good v. United States, 39 Fed. Cl. 81, 102–03 (Ct.Fed.Cl.1997) (“By requiring developers to make a good faith effort to satisfy permitting agency concerns after an initial denial, ripeness doctrine reflects the reality that land development often involves a process of negotiation between the permitting agency and developer.”), aff'd, 189 F.3d at 1355. Rather than address any alternatives for achieving its ultimate residential development goals, ALI focuses unreasonably on the proposal to run the sewer pipe through the conservation area and across the creek. In construing the issue so narrowly, ALI effectively removes any discretion on the part of the City to consider other options for ALI to complete Phases Two and Three. The trial court found that the parties originally had discussed viable alternatives to running the sewer line through the conservation area, and that such alternatives were available, even if more costly. After the City's denial of the petition, however, ALI immediately filed suit rather than propose any revisions or seek any changes.
The 1st DCA then goes on to question the finality of the denial because the government might approve the plat the next time around:
Similarly, the City Commission's vote denying Petition 76SUB lacked the requisite finality to render this case ripe for review on the merits. As in Tinnerman, the question of what the City Commission would have done if ALI had proposed any alternatives remains open. At the City Commission hearing, a representative of the City (Ms. Massey) opined that what ALI was proposing in its plat design application is inconsistent with the land uses allowed in the Master Plan. To change it, ALI would have to submit a plan development  amendment. Commissioner Lowe voiced similar concerns about whether the application is consistent with the Master Plan. Commissioner Donovan opined that ALI seemed to have developmental rights if it “would only develop a plan” acknowledging certain requirements. Donovan agreed with other commissioners to “give [ALI] a second chance.” Commissioner Henry expressed discomfort with completely voting down the plat application, suggesting instead that ALI consult with the City to determine what was needed “to make this work” and allow ALI to come back with a feasible plan. Commissioner Bryant urged ALI to continue working with the City in seeking to resolve the land-use issues. Mayor Hanrahan addressed possible redesign options upon the City's disapproval of Petition 76SUB, so that ALI could return to the City for reconsideration without the usual, prolonged delays 
The clear message of a majority of the City's ultimate land-use decision-makers was that they wanted to reach a  mutually agreeable resolution of ALI's ultimate development plans. It is also noteworthy that the developers of the Blues Creek subdivision have enjoyed a successful, long-term working relationship with the City. See Lost Tree Vill. Corp., 838 So.2d at 573 (recognizing the relevance of the working relationship between the landowner and the governmental entity in determining whether a decision is final and whether the submission of an additional application would be futile). Historically, the City Commission had granted final approval of every other Blues Creek plat approval petition (regarding other units and phases) that ALI submitted. Given these circumstances, the record belies ALI's argument that the City's vote on Petition 76SUB was a definitive, final decision on a meaningful application for purposes of the ripeness inquiry. See Tinnerman, 641 So.2d at 525 (“[T]he ripeness requirement of a final decision requires more than procedural finality because it includes an opportunity for government to change its mind.”). Additionally, where its options were not fully exercised, ALI has not demonstrated that the futility doctrine applies here. See McKee v. Tallahassee, 664 So.2d 333, 334 (Fla. 1st DCA 1995) (concluding that the city's decision was not “final,” the futility doctrine did not apply, and the “taking” claim was not ripe, where the municipal board denied a variance from development restrictions, but city officials repeatedly assured the landowner that a properly drafted, meaningful application for a variance, with a required development plan, would receive a positive review).
Compare that to the clear language in Koontz v. St. Johns River Water Mgmt. Dist., 720 So. 2d 560, 562 (Fla. 5th DCA 1998) [aside - yep, you guessed it, this was a precursor to the Koontz case being considered right now by the U.S. Supreme Court].
It is St. Johns' position that since there was a chance that a modified application might be approved, there was no final agency action. To be more precise, the District argued that since it had indicated that it would have granted the application if the owner had agreed to the off-site improvements, the owner should be required to make additional filings making other concessions until the District finally approves the permits before the owner is permitted to pursue a regulatory taking. We disagree. Koontz made a specific application to the District for permits that would permit him to develop a fraction of his property. His position, in effect, was that the application he filed and the concessions he was willing to make to the District in order for it to issue the permits (his giving up over two-thirds of his property to the District) was all that he could do and still retain an economic use of his property. The District turned him down. It made a final decision on the only application before it. One of the members of the District observed: “If they got a lawyer they ought to get him, get on with him.” There is no requirement that an owner turned down in his effort to develop his property must continue to submit offers until the governing body finally approves one before he can go to court. n.2 If the governing body finally turns down an application and the owner does not desire to make any further concessions in order to possibly obtain an approval, the issue is ripe. The owner in this case drew a line in the sand and told the District: “I can go no further.” Whether the owner can now convince the court that there has, in fact, been a taking is the issue properly before the trial court. 
n.2. But in Williamson, the applicant had not applied, and been turned down, for a variance that could have substantially affected the use of his property. Here, there was no other procedure left to the applicant to realize the economic feasibility of his project. The owner's only hope was for the District to change its mind on its conditions for approving the grant of the permits. St. Johns suggests that Koontz should have been required to submit another application offering to give the District two-thirds of his property and do the off-site improvements to one of the parcels owned by the District. And if the District still rejected the plan, he should have been required to submit yet another application agreeing to give two thirds of his property and possibly do the off-site improvements on the District's property but perhaps capping the cost to a particular amount. Such a requirement would eventually discourage the owner so that he might just go away. Here, the District turned down the owner's final submission. The issue is ripe.
The Koontz position seems much sounder: just let the landowner into court, where she can try to prove up her case, and the court can balance whether anything was taken. This court really seems to be conflating the merits of the development application--and the case--with ripeness. They're related, but not in the way this court describes. Note that I'm not saying that the developer should win here. The facts aren't especially good for the developer, since it seems that the developer may have negotiated away its rights to develop in the way it wanted to. But that doesn't change the fact that it's now unclear what is a final, meaningful application to develop land in Florida.

In Florida, where decisions of District Courts of Appeal conflict, the Florida Supreme Court has discretionary jurisdiction to hear the case. The Florida Supreme Court, however, only accepts a very small percentage of these cases. Consequently, property owners in the 1st DCA's jurisdiction (roughly the North Florida, including the Panhandle) may be stuck with a decision that frustrates their efforts to get into court on takings claims.