Forest Roads Litigation Update: In Challenge to EPA's New Rule, Industry Intervenes

The forest roads litigation continues to develop, but that unfortunately means little certainty for landowners. In preparing to speak about this litigation with the Alabama Forestry Association at their mid-year meeting on Friday, I have a few updates for my readers.

As I mentioned before, the Northwestern Environmental Defense Center has already attacked EPA's new rule in the Ninth Circuit. This came as a result of EPA releasing a new rule "clarifying" that logging and logging roads are not subject to NPDES permits under the Clean Water Act. Recall, as I've discussed, that this rule really does not seem to solve much, but that it really fouled up oral arguments at the U.S. Supreme Court because it was released just before the arguments.

In any case, it is somewhat helpful to forest landowners, so earlier this month, a large groups representing timber and forestry interests requested intervention in the case to protect their interest. The industry organizations request intervention for a number of reasons, including that while they and "EPA agree that forest road stormwater discharges are not currently subject to NPDES permitting under the CWA, they may disagree as to how and when such discharges should become subject to regulation in the future. Indeed, as part of the Federal Register notice regarding the Final Rule, EPA explicitly acknowledges that it may regulate such discharges in the future." That is, while they agree with EPA that logging roads should not be subject to permitting, they foresee a future fight over the more permanent forest roads.

On February 13, the Ninth Circuit granted the petition to intervene. The amended briefing schedule is as follows: EPA is to file the administrative record by June 13, 2013, the NEDC's brief is due July 23, EPA's answer brief is due August 22, and the industry intervenors' brief is due September 5, with NEDC permitted to file a reply 14 days thereafter. The Court has not yet ruled on the industry's petition to intervene, but it will most likely allow them into the case. NEDC's initial brief is due on March 25 and EPA's brief defending its new rule is due April 24.

Uncertainty remains for landowners. But one thing is for sure: NEDC isn't going to back down. As Greg Jackson wrote on the blog of the Kentucky Journal of Equine, Agriculture, and Natural Resources Law:

As demonstrated above, continuing to pursue the current litigation is NEDC's only avenue to recover its costs. While completely dropping the suit will not promote any of NEDC's goals, solely pursuing the challenge before the Ninth Circuit would. It allows the group to protect the environment and the Pacific West's natural resources, and, through another lawsuit, could result in receiving the requested relief. Furthermore, given the current appeal's interlocutory nature, this bifurcated approach would not produce any greater litigation. In fact, this option may clear up some complex issues, such as jurisdiction, and lead to cleaner litigation. Instead, however, NEDC has chosen to continue the current appeal, notably the only option for recouping its litigation costs. Thus, a substantial factor in NEDC's decision to continue litigating the action currently before the Supreme Court appears to be monetary. Instead of taking the simpler challenge routes, the group has chosen to unnecessarily prolong complex litigation in hopes of forcing its opponent to foot mounting legal bills. This clear evidence of greed is certainly an uncomfortable reality for an environmental group who would likely be quick to condemn the corporate defendants as malicious profiteers, selfishly subjecting the environment for their own personal gain.

I don't necessarily agree with Jackson that this is "greed." Rather, it seems more about a self-interested organization that, like all organizations, is out to keep itself going. So it's about money now for the NEDC. Its incentive now is to win the litigation, no matter the best legal solution. If it were poker, I would say the group is pot-committed.

EDIT 10:30 AM 2/28/13: I've revised the post to reflect new information that readers sent me revising the briefing schedule and indicating that the motion to intervene has been granted.

Are Property Rights Human Rights?

Yes, answers David Marotta at Forbes, in an accessible article on the source and viability of property rights. I would answer the same. An excerpt:

Property rights depend on the principle that you own yourself. If you own yourself, then you own the fruit of your labor.

***

Labor, like hunting for meat or planting crops, was eventually traded through currency. Money earned through labor was used to purchase land, goods or the labor of others. Ownership comes from exchanging your labor for your desired value: crops for money, money for hunted meat. 

To talk about fairness in ownership or equality in property doesn’t work. All financial inequality comes from ownership. The medieval hunter owns a spear and meat while the farmer owns a field and crops or even one farmer owns corn while another owns peas. There is no equality. Even if we were to redistribute the outcome of their labor, inequality would still exist. How can the effort of hunting and the effort of planting be compared, let alone the effort of all the other ways to labor? The only place equality between types of labor can be found is in the market, in the exchange. For how much money earned through planting will the farmer buy the hunter’s meat?

***

Today, government control has replaced common consent. And this control is capriciously influenced by a political process that turns on a slim 51% majority. Libertarians are correct that much common good could be accomplished by voluntary association without the heavy hand of corruptible politicians.

***

Most of the infringement on property rights stems from the belief that something is so morally right that we must impose this behavior on others. We must force them to value what we value. Down that path lies theocracy.

Sounds something like an average Joe's modern-day Murray Rothbard, doesn't it? Rothbard wrote:

The human right of every man to his own life implies the right to find and transform resources: to produce that which sustains and advances life. That product is a man’s property. That is why prop­erty rights are foremost among human rights and why any loss of one endangers the others. For ex­ample, how can the human right of freedom of the press be pre­served if the government owns all the newsprint and has the power to decide who may use it and how much? The human right of a free press depends on the human right of private property in newsprint and in the other es­sentials for newspaper production. In short, there is no conflict of rights here because property rights are themselves human rights. What is more, human rights are also property rights! There are several aspects of this important truth. In the first place, each individual, according to our understanding of the natural order of things, is the owner of himself, the ruler of his own person. Pres­ervation of this self-ownership is essential for the proper develop­ment and well-being of man. The human rights of the person are, in effect, a recognition of each man’s inalienable property right over his own being; and from this property right stems his right to the material goods that he has produced. A man’s right to per­sonal freedom, then, is his prop­erty right in himself. 

 

Administrative Law Judge Finds Landowner's Agricultural Activities are Exempt from Environmental Permitting

In a recent case that will interest agricultural landowners in Florida, a landowner represented himself before an administrative law judge (ALJ) an administrative hearing. In Zagame v. Department of Agriculture and Consumer Services, DOAH Case No. 12-1356 (Feb. 1, 2013), the ALJ found that the landowner's dredging of a cattle pond and removal of trash from it were exempt from environmental permitting requirements, despite a contrary binding determination by the Department of Agriculture and Consumer Services (DACS). 

In Florida, the Department of Environmental Protection (DEP) oversees the Environmental Resource Management program. This program "regulates activities involving the alteration of surface water flows. This includes new activities in uplands that generate stormwater runoff from upland construction, as well as dredging and filling in wetlands and other surface waters. Environmental Resource Permit applications are processed by either [DEP] or one of the state's water management districts, in accordance with the division of responsibilities specified in operating agreements between [DEP] and the water management districts. The Environmental Resource Permit Program is in effect throughout the State."

Certain agricultural activities, however, are exempt from the the program's requirements. Section 373.406(2), Florida Statutes, provides that:

Notwithstanding s. 403.927, nothing herein, or in any rule, regulation, or order adopted pursuant hereto, shall be construed to affect the right of any person engaged in the occupation of agriculture, silviculture, floriculture, or horticulture to alter the topography of any tract of land, including, but not limited to, activities that may impede or divert the flow of surface waters or adversely impact wetlands, for purposes consistent with the normal and customary practice of such occupation in the area. However, such alteration or activity may not be for the sole or predominant purpose of impeding or diverting the flow of surface waters or adversely impacting wetlands. This exemption applies to lands classified as agricultural pursuant to s. 193.461 and to activities requiring an environmental resource permit pursuant to this part. This exemption does not apply to any activities previously authorized by an environmental resource permit or a management and storage of surface water permit issued pursuant to this part or a dredge and fill permit issued pursuant to chapter 403. This exemption has retroactive application to July 1, 1984.

The ALJ explained how DACS was given the authority to determine what activities qualified for an agricultural exemption:

For many years prior to 2011, [DACS] had the authority to review and give non-binding opinions at the request of a water management district concerning whether claimed alterations qualified for an agricultural exemption under section 373.406(2). However, along with other revisions in 2011, chapter 2011-165, Laws of Florida, authorized [DACS] to make binding determinations, at the request of a water management district or a landowner, regarding whether alterations or activities qualify for an exemption. See § 373.407, Fla. Stat. 

Two threshold issues for an exemption under section 373.406(2) are: (1) is the land classified as agricultural pursuant to section 193.461, Florida Statutes, and (2) is the person whose activities are in question engaged in agriculture. The parties stipulated that both of these threshold requirements were met in this case. 

The other two criteria, which are the ones at issue in this case, are whether the activity (1) is for purposes consistent with normal and customary agricultural practices for the area and (2) is not for the sole or predominant purpose of adversely impacting wetlands.

Inquiring into these two criteria, the ALJ  found that "[a]lthough the pond is larger than needed because the footprint of the dumping area was large, and Petitioner may have some non-agricultural plans for the Site in the future, under the facts and evidence as outlined herein, it is found that the pond constructed by Petitioner was for purposes consistent with common practices for cattle operations in the area." Further, it found "that the predominant purpose and effect of Petitioner’s activities was to construct a cattle pond and clean up a dumping ground, not to adversely impact a wetland." Id. at 15-6. Consequently, the ALJ recommended that DACS enter a final order finding that the landowner's agricultural activities were exempt from environmental permitting.

Under Florida's administrative law process, the Department must now issue a final order adopting, rejecting, or modifying the ALJ's recommended order. You can follow the progress here.

Early Issues for Landowners in the 2013 Legislative Session

People are starting to talk about the 2013 legislative session in Florida, which runs from March 5 to May 3. Here are some of the issues and bills that are being talked about. First, the Florida Current reports that there does not seem to be much appetite for changes to Florida's growth management system after the big changes in 2011:

After sweeping growth management law changes in 2011, most legislators and interest groups were content in 2012 to leave the issue alone while cities, counties and developers adjust to the changes. They still feel that way in 2013. However, a court case and a legal opinion involving growth management are creating a stir on a pair of issues. 

One involves referendums on development and changes made by a "glitch bill" that passed in 2012. A circuit court judge in Palm Beach County ruled in October that HB 7081 in 2012 now allows Boca Raton residents to seek a referendum challenging the proposed Archstone apartment complex there. That ruling has developers seeking clarifying legislation. 

Another issue stemming from the 2011 law involves transportation "concurrency" and a system for charging developments for needed road improvements. In 2012, the Florida Association of County Attorneys said a requirement for allowing developers to pay only their "proportionate share" doesn't apply to counties with other systems for collecting mobility fees.

The Florida Forestry Association has an update on some interesting bills: 

Alternative Water Supply Development – HB 109 by Rep. Dana Young, SB 364 by Sen. Alan Hays. Florida’s population growth has taxed our water resources. Florida’s forested lands can be part of the solution through surface water storage and aquifer recharge. Extended consumptive use permits for water utilities would enable them to raise bonded revenue to fund the infrastructure needs for alternative water supplies. Both bills have been approved by their respective Agriculture Committees and now go to the House State Affairs Committee (HB 109) and the Senate Community Affairs Committee (SB 364). 

Ag Lands & Practices Act – HB 203 by Rep. Halsey Beshears. The Ag Lands & Practices Act adopted in 2003 preempted counties from adopting any new ordinance regulating a farm or forestry operation beyond adopted BMPs. While this has been very effective, an effort is now underway to expand this preemption from counties to governmental entities. HB 203 was approved by the House Agriculture Committee and now goes to the Local & Federal Affairs Committee. Sen. Jeff Brandes has filed a companion bill in the Senate, but a bill number has not been assigned yet. 

Green Building Certification – HB 269 by Rep. Halsey Beshears. The Department of Management Services (DMS) has adopted the LEED green building rating system for state construction projects. LEED does not accept wood products certified under the SFI or Tree Farm system, which means it excludes virtually all Florida wood products from being used in new state construction projects. Rep. Halsey Beshears has filed legislation requiring DMS to adopt a green building rating system that does not discriminate against Florida wood products. His bill would require Florida wood products to be considered first when the use of wood is required for state construction projects. HB 269 has been placed on the agenda of the House Energy & Utilities Committee next week. Sen. Greg Evers has filed a companion bill in the Senate, but a bill number has not been assigned yet.

The Florida chapter of the American Planning Association also writes on two bills, one with interesting property rights implications:

SB 584 (Senator Hays) would prohibit the state, a county or a municipality from buying land for conservation purposes unless: 1) An accurate inventory, not more than 1 year old, of government-owned property is made public; (2) Sufficient funds are approved in the annual budget for the maintenance of existing properties; (3) An analysis describing the annual cost of maintenance of the proposed land purchase is completed; and (4) An equal amount of public property not being held in conservation is returned or sold at fair market value to the private sector. There is no companion bill filed yet in the House. 

HB 673 (Rep. Perry) and SB 772 (Senator Brandes) are identical bills that would amend the Bert Harris Act (Chapter 70, F.S.) to prohibit a local government entity from directly or indirectly imposing a tax, fee, charge or exaction against private property that: 1) does not result from a development or proposed development with a essential nexus to development impacts upon infrastructure or other public facilities; or 2) is more stringent than an exaction imposed by a state or federal agency unless the local government entity demonstrates that the exaction is reasonably necessary. This bill appears to create a more stringent test than Nollan/Dolan requirements or “the rationale nexus" test stemming from Florida case law that has governed impact fees and other exactions for decades. SB 772 has been referred to the Senate Community Affairs Committee and Judiciary; HB 673 has been filed but not yet referred to committees.

A Jargon-Free Property Rights Update for Forest Landowners

Thanks to the Southeastern Wood Producers Association for inviting me to give its membership a "Forestry and Property Rights Legal Update" in the latest edition of its newsletter, Out of the Woods. It's excerpted below:

Forestry and Property Rights Legal Update

In recent months, there have been several legal developments that property owners and those involved in forestry should know about. Having some familiarity with these legal issues can be an important service to the landowners that members of this Association work with.

You’ve probably heard about the forest roads lawsuit, Decker v. NEDC, argued before the U.S. Supreme Court in early December. At stake is whether logging roads and ditches need federal stormwater permits. Since the 1970s, EPA has agreed they do not with its “Silvicultural Rule.” When environmentalists sued in Oregon, a federal court ruled that EPA was incorrect. Last year, Congress blocked EPA from developing the new permit while the case was on appeal.

The case before the Supreme Court looked strong. EPA, however, complicated things by issuing a new rule intended to replace the faulty Silvicultural Rule on the eve of the case being heard. While the new rule helps the forestry community by generally not requiring permits for logging roads and ditches, the Supreme Court seemed concerned about this new development. The Supreme Court should rule by July. For now, it has asked the parties for further information about EPA’s new rule. The only real solution here is congressional action, so talk to your U.S. representative and senators about this issue.

Two important property rights cases have not been in the news quite as much. One case, Koontz v. St. Johns River Water Management District, questions bargaining practices that governments use for land-related permits. There, the government agreed to issue a permit to fill wetlands if the landowner paid to improve government culverts miles away. The landowner refused and sued when the government denied the permit. The Florida Supreme Court said the landowner could only challenge the unreasonable permit demand after giving in to it.

The outcome of Koontz will be important to all landowners—even average homeowners and agricultural landowners. The growth in government at all levels means that every landowner in the country is now subject to a complex permitting regime. Imagine a local government that requires you to buy $25,000 in new library books in order to get a permit to build a new deck. Or a state agency that requires a timberlands owner in the Panhandle to build a nature walk in South Florida to get a permit to build a logging road. The Supreme Court is being asked to decide how far these outrageous requests can go. I was fortunate to be involved in this case. I watched the oral arguments in Washington, D.C. in January and am cautiously optimistic that the Justices will support the landowner.

The other recent property rights case before the Supreme Court has already been decided—and it was a big win for landowners and forestry. In Arkansas Game and Fish Commission v. United States, the Supreme Court held that a landowner could be compensated where the federal government’s temporary flooding of the property destroyed millions of dollars of standing timber.

From the beginning of the Republic, governments have tried to get out of paying compensation for property they take by arguing it was for the public good. The Supreme Court once again rejected this argument. The Constitution, it said, requires the government to pay landowners for damages to property, no matter whether the government had a good reason for its actions or not.

We must be our own advocates for property rights and the sound environmental practices used in forestry. As these cases illustrate, we must remain diligent in working to protect our property rights and livelihoods. The next time you talk to a landowner, tell them about these recent developments. Remind them about the legal struggles that our industry faced and is still facing out West because our laws prioritize the Northern Spotted Owl above people. It could happen here if we are not mindful.

Jacob T. Cremer is an attorney at Bricklemyer Smolker, P.A., in Tampa. His practice focuses on property rights, environmental, and land use law. He grew up in a family that has been involved in forestry in Florida for many generations. Follow the developments on these cases and others at his blog, The Florida Land Environment.

The Constitutional Issues at Stake in Koontz, Simplified

Many thanks to the newsletter for the Constitutional Law Committee of the American Bar Association's Section of Environment, Energy, and Resources, which recently published my article about Koontz v. St Johns River Water Management District, No. 11-1447 (argued Jan. 15, 2012). I sought to provide another plain-language summary of the case, although more to a legal audience than my last summary. Here it is:

U.S. Supreme Court Hears Important Florida Exactions Case

These days, Florida is a hotbed of property rights litigation. Three years ago, Florida was defending its beach renourishment program before the U.S. Supreme Court. Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 130 S. Ct. 2592 (2010). That case broke new ground when a plurality of justices acknowledged that a court can take property, just as the legislative and executive branches can.

Now that the U.S. Supreme Court has heard Koontz v. St. Johns River Water Management District, No. 11-1447 (cert. granted Oct. 5, 2012, argued Jan. 15, 2013), environmental attorneys, constitutional scholars, and land use planners are wondering if Florida will again be on the forefront of takings law. This could be the most important decision in the world of environmental and land use permitting in years. It could draw into question common bargaining practices by governments when requesting conditions in exchange for development permits.

In the development approval process, governments commonly require a dedication of real property to mitigate adverse impacts. But what if the request is for cash or for services? What if the request is unreasonable, and the landowner cannot use the property?

Background

The Takings Clause of the Fifth Amendment to the U.S. Constitution ensures that private property cannot “be taken for public use, without just compensation.” The Takings Clause was intended to bar government from forcing individuals from bearing public burdens alone. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 548 (2005). Early cases focused on physical invasions of property. As the regulatory state grew in the twentieth century, the U.S. Supreme Court began to recognize that government regulation of private property can sometimes be so onerous that it is tantamount to the government appropriating the property. Id. An exaction is a government requirement to donate something in exchange for the right to develop property. Oftentimes, this is a requirement to dedicate real property. Generally, the government cannot force landowners to give up the right to exclude others from property in return for the ability to develop it. It can, however, require mitigation of adverse development impacts. The U.S. Supreme Court has given some limited guidance on how to determine whether an exaction passes constitutional muster:

1. There must be an “essential nexus” between the exaction and the interest that the exaction is advancing. Nollan v. Cal. Coastal Com., 483 U.S. 825, 837 (1987).
2. There must be a “rough proportionality” in both nature and extent between the exaction and the impact of the proposed development. Dolan v. Tigard, 512 U.S. 374, 391 (2005).

Nollan and Dolan both addressed exactions of easements for public access. The U.S. Supreme Court left open whether the Nollan-Dolan test applied to exactions not involving real property, such as exactions for money or other personal property. Courts have differed on this question, leading to confusion among landowners, planners, regulators, and government officials.

The Koontz Cases

In St. Johns River Water Management District v. Koontz, 77 So. 3d 1220 (Fla. 2011), the Florida Supreme Court declined to recognize an exaction under U.S. Supreme Court precedent. Koontz  had owned his property since 1972. He been trying to develop his property since 1994, when he had applied to the District for a permit to develop his property. All but 1.4 acres of the 14.2-acre property were in a Riparian Habitat Protection Zone. Koontz only wanted to develop 3.7 acres of the property, but he would have to fill 3.4 acres of wetlands to do so.

The District agreed to grant the permit on two conditions. First, the District required that Koontz deed the remainder of his property into a conservation area, which he agreed to do. Second, the District required that Koontz perform offsite mitigation several miles by replacing culverts and plugging drainage canals on District-owned properties seven miles from his property, which Koontz refused.

When the District then denied the permit, Koontz sued in state court, arguing that the District’s offsite mitigation condition was an unconstitutional exaction because it violated the Nollan-Dolan test. The case bounced around between the trial court and the intermediate appellate court for years, producing some important takings jurisprudence in Florida. Ultimately, the trial court found that the District had taken Koontz’s property through an unconstitutional exaction because the condition was not related to the impacts of his project. The intermediate appellate court affirmed.

The Florida Supreme Court reversed, holding there was no taking. The court explained that the Nollan-Dolan test only applied to exactions of real property, where a permit was actually issued imposing the onerous exaction. The court acknowledged a line of cases applying the Nollan-Dolan test beyond real property exactions, but it held that these cases went beyond the U.S. Supreme Court’s decisions. The court also pointed to Monterev v. Del Monte Dunes at Monterev, Ltd., 526 U.S. 687 (1999), and Lingle v.Chevron U.S.A., Inc., 544 U.S. 528 (2005), to support its conclusion that the Nollan-Dollan only applies when the government actually issues the permit that is sought because only then is the owner’s property interest subject to dedication.

Finally, even though the court denied the property owner’s claim, it expressed a public policy concern for other developers and landowners. It worried that “agencies will opt to simply deny permits outright without discussion or negotiation rather than risk the crushing costs of litigation. Property owners will have no opportunity to amend their applications or discuss mitigation options because the regulatory entity will be unwilling to subject itself to potential liability. Land development in certain areas of Florida would come to a standstill. We decline to approve a rule of law that would place Florida land-use regulation in such an unduly restrictive position.” Koontz, 77 So. 3d at 1231.

Consequently, the Florida Supreme Court held there was no taking because (1) no permit was ever issued, (2) the exaction did not demand real property, and (3) public policy precluded expansion

The U.S. Supreme Court Hears Koontz

On October 5, 2012, the U.S. Supreme Court granted certiorari, and it heard oral arguments on January 15, 2013. Koontz asks the Court to establish:

1. The Nollan-Dolan exactions test applies to exactions other than real property, such as where a permit applicant is required to pay for work; and
2. The Nollan-Dolan exactions test applies even where a permit is denied because an applicant rejects an exaction.

Koontz argues that the Court does not have to stretch far to make such a ruling, as it has held in other contexts that government may not withhold discretionary benefits on the condition that the beneficiary surrender a constitutional right. Koontz also argues that both of these issues need to be settled by the Court because the law on these issues has developed such a split across the country that courts facing the issue are having to choose a side, necessitating clear guidance from the Court.

The District, on the other hand, argues that the Court does not have jurisdiction because of Koontz only brought state law claims in state courts (not federal claims). Echoing the Florida Supreme Court, the District also argues it did not exact or take anything because it never issued a permit or collected an exaction.

Early on, there were reasons to think that this case would be an important case for planners and land use lawyers to watch. First, the Pacific Legal Foundation, which is representing Koontz, has shown a knack for litigating environmental and property rights cases before the U.S. Supreme Court, having participated in more than half a dozen landmark decisions. Indeed, it argued and won Nollan, and in March of this year, it won Sackett v. EPA, 566 U.S. __ (2012), which gave property owners the right to take EPA to court over a compliance order dealing with wetlands. Second, this case is positioned well as a vehicle for the Court’s property-rights advocates, as it seems to present the review of a clean issue of law, rather than a messy fact-specific or jurisdictional fight. Justices Scalia, Kennedy, and Thomas have shown an interest in the past in the timing of permit conditions. See Lambert v. San Francisco, 529 U.S. 1045, 1048 (2000) (dissenting from denial of certiorari).

Reading the tea leaves of oral arguments at the Supreme Court is always a dangerous business. That said, I and others have made several observations. First, Justice Scalia, who the landowner almost certainly needs to win a majority, seemed critical of whether anything had actually been taken. Second, while a majority of the Justices appeared at least somewhat sympathetic to the landowner’s plight, there was little agreement amongst them in terms of whether there was a constitutional harm and, if so, what the remedy to it should be. Finally, the reach of the unconstitutional conditions doctrine, which Nollan, Dolan, and Lingle indicate is the origin of exactions law, took center stage. This notoriously murky doctrine stands for the proposition that [a]cts generally lawful may become unlawful when done to accomplish an unlawful end, and a constitutional power cannot be used by way of condition to attain an unconstitutional result.” Frost v. R.R. Comm'n of Cal., 271 U.S. 583, 598-99 (1926). The Supreme Court has traditionally struggled with appropriate breadth of this doctrine, and they appear to be struggling with it in this case, as well.

Jacob T. Cremer is an attorney at Bricklemyer Smolker, P.A., in Tampa, Florida. His practice focuses on property rights, environmental, and land use law. He assisted counsel of record before the U.S. Supreme Court for the landowner-petitioners in Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 130 S. Ct. 2592 (2010). He co-authored an amicus brief in support of the landowner-petitioner in Koontz and attended oral arguments. Follow the developments on this case and others at his blog, The Florida Land Environment, www.jacobtcremer.com.

Local Governments in Florida May Condition Land Development Orders on Expert Agency Review

A recent decision out of one of Florida's intermediate appellate courts has clarified some finer points of land use law. In Seminole Tribe of Florida v. Hendry County, - So. 3d -, 2013 WL 238231 (Fla. 2d DCA Jan. 23, 2013), the Tribe challenged a rezoning of over 3,000 acres for a Florida Power & Light power plant. The Tribe had already lost in a certiorari proceeding before the circuit court. In Florida, a land use certiorari proceeding works like an appeal--the logic being that the party has already had a quasi-judicial proceeding to present the case for its permit, request, or development order before a local board . Thus, the Second District Court of Appeal's (2d DCA) review was extremely narrow: it could only determine whether the circuit court afforded procedural due process and applied the correct law.

The 2d DCA, however, did clarify some finer points of Florida land use law. First, it re-emphasized a point that has been made in a number of cases: comprehensive plan challenges must be raised in their own separate lawsuit and not in a certiorari proceeding. The Tribe had argued that the county's land development code had, in essence, incorporated the county's entire comprehensive plan. This, the Tribe argued, meant that it could bring its comprehensive plan challenge in both the certiorari proceeding, as well as in another lawsuit it filed separately. The 2d DCA disagreed, reasoning that chapter 163, Florida Statutes, means what it says:

First, the Seminole Tribe argues that the Ordinance was not consistent with the comprehensive plan, in violation of LDC section 1–53–5.4(1) (2010). That section provides as follows: “Only uses which are consistent with the comprehensive plan ... may be approved as a PUD.” The circuit court properly found that section 163.3215, Florida Statutes (2011), would preclude the Seminole Tribe from raising this issue in a petition for writ of certiorari. That section states that it provides the exclusive methods for a party to challenge the consistency of a development order with a comprehensive plan. § 163.3215(1). It provides that an adversely affected party may maintain a de novo action for declaratory or other relief to challenge a development order. § 163.3215(3). The Seminole Tribe filed a separate action under this subsection along with its certiorari petition. Though section 163.3215(4) provides that an adversely affected party may challenge a development order solely by filing a petition for writ of certiorari if the local government has adopted an ordinance establishing various requirements, the parties have not identified and we have been unable to locate all of these requirements in the Hendry County Code. Consequently, the circuit court afforded procedural due process and applied the correct law in refusing to hear the issue of comprehensive plan consistency on certiorari review.

Second, the 2d DCA made clear that a local government can condition a requirement for a development order on an agency's review of that requirement (and its approval). This issue is critical for small and cash-strapped local governments: why should they have to try to analyze a complicated issue like the water consumption of a power plant, when an expert state or federal agency will be doing the same thing at a later time? The 2d DCA confirmed that they do not have to:

The circuit court determined that the County has sufficiently addressed the issue of water use by conditioning the Ordinance on the approval of the South Florida Water Management District (SFWMD). The circuit court concluded that the water usage issues are within the exclusive jurisdiction of the Department of Environmental Protection or its successor, SFWMD. To support this proposition, the court pointed to section 373.217, Florida Statutes (2010), which authorizes the Department of Environmental Protection to provide programs for the issuance of permits for the consumptive use of water; states that the Florida Water Resources Act of 1972, sections 373.203–373.249, Florida Statutes (2010), provides the exclusive authority for requiring permits for the consumptive use of water; and establishes that the Florida Water Resources Act of 1972 supersedes any conflicting law or ordinance. [See also section 373.023, Fla. Stat.]. These statutory sections indicate that the water impact will be addressed by SFWMD and that the County ensured compatibility by conditioning the Ordinance on SFWMD's approval. 

*** 

As to wildlife, the circuit court determined that the County had satisfied its obligation to ensure compatibility by requiring approval by the appropriate state and federal agencies having jurisdiction over water, wetlands, and wildlife habitat. The court pointed to article IV, section 9, of the Florida Constitution, establishing the Fish and Wildlife Conservation Commission to exercise the regulatory and executive powers of the state with respect to wild animal life and fresh water aquatic life. Establishing this condition was an appropriate way to ensure compatibility regarding wildlife. See LDC § 1–53–5.3(c). The circuit court afforded due process and applied the correct law as to these issues of compatibility.

There are some interesting issues in the background of this case concerning Florida's Power Plant Siting Act (PPSA), which is basically a one-stop permitting shop for power plants. But they did not come out much in this opinion. The Tribe has another appeal pending that raises interesting issues concerning how the PPSA  interplays with Florida's Community Planning Act. We'll just have to wait to see what the 2d DCA does with that case. In the meantime, if you're interested in learning more about the PPSA, the definitive article on it was just published last October. The author, Douglas Roberts, was my former colleague and one of the attorneys representing Florida Power & Light in this case. (In full disclosure, I helped represent Florida Power & Light in this case and the appeal.)

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.

Florida Courts Must Defer to Administrative Agencies' Interpretation of Their Own Rules

In Florida, as in other states and in federal law, courts must give deference to an administrative agency's interpretation of its own rules. I've found that the average citizen usually finds this odd. Why should we allow an agency making a determination on a permit, entitlement, or other benefit to interpret its own rules? The short answer is administrative law is about efficiency, and not always about fairness.

In any case, the 2d DCA recently reinforced this principle in Duke's Steakhouse Ft. Myers, Inc. v. G5 Properties, LLC, - So. 3d -, 2013 WL 191922 (Fla. 2d DCA Jan. 18, 2013). Duke's challenged an order of the South Florida Water Management District approving an environmental resource permit (ERP). The administrative law judge (ALJ) recommended that the agency deny the permit. The District, however, issued a final order approving the ERP, rejecting the ALJ's interpretation of the District's rules:

[The District's] board did not reweigh the evidence or modify the ALJ's findings of fact. Rather, it rejected the ALJ's interpretation of the applicable Florida Administrative Code—specifically, the ALJ's conclusion of law that G5 did not meet BOR section 5.2.1(a) water quality requirements. Section 120.57(1)(l ) provides that an agency may reject or modify the ALJ's conclusions of law and interpretation of administrative rules, so long as its determination is as or more reasonable than those of the ALJ. Beyond peradventure, an agency bears the primary responsibility to interpret statutes and rules within its regulatory expertise and jurisdiction. See, e.g., Pub. Emps. Relations Comm'n v. Dade Cnty. Police Benevolent Ass'n, 467 So.2d 987, 989 (Fla.1985). An agency's interpretation of such statutes and rules does not have to be the only reasonable interpretation—only a permissible one, see, e.g., Suddath Van Lines, Inc. v. Dep't of Envtl. Prot., 668 So.2d 209, 212 (Fla. 1st DCA 1996), and should not be overturned unless clearly erroneous. See, e.g., Collier County Bd. of County Comm'rs v. Fish & Wildlife Conservation Comm'n, 993 So.2d 69, 72 (Fla. 2d DCA 2008).

The 2d DCA concluded that the District's interpretation of its rules were as or more reasonable than the ALJ's  interpretation. Thus, it affirmed the District final order granting the permit.