Morgan v High Penn Oil 1945 Πs

Morgan v. High Penn Oil • 1945 Πs purchase a 9 acre tract. They have a dwelling house, a restaurant and 32 mobile homes. – Πs take lodgers into their dwelling. • 1950, High Penn Oil begins operating a refinery about 1000 feet from Πs’ dwelling. • The area within 1 mile has very mixed uses, from residences to giant storage tanks to trucking companies to railroad facilities. • Evidence that, 2 -3 days a week, refinery emits nauseating gases and odors in great quantities so as to render persons of ordinary sensitivities uncomfortable and sick. • Oil refiner is the only discharger “in annoying quantities” in the area. • Relief sought: temporary damages plus an injunction. 1 Donald J. Weidner

Morgan v. High Penn Oil (cont’d) • Nuisance per se or at law “is an act, occupation, or structure which is a nuisance at all times and under any circumstances, regardless of the location or surroundings. ” – No nuisance per se in Morgan because the activity is not illegal. • However, some nuisances have been called per se even though they are not illegal and even though questions of reasonableness have been involved • Nuisances per accidens or in fact “are those which become nuisances by reason of their location, or by reason of the manner in which they are constructed, maintained, or operated” – However, some have been held per se because of their location, and this involves questions of reasonableness – There can be a nuisance per accidens even if the facility is operated in a non-negligent manner. 2 Donald J. Weidner

Morgan v. High Penn Oil (cont’d) • A nuisance can arise from a negligent act, but it need not – Nuisances often arise from intentional acts. – Morgan: If the nuisance is intentional, it is irrelevant that the defendant exercised great care to avoid it. • Sic utere tuo ut alienum non laedas—so use your own rights that you don’t alienate the rights of another – Begs the question – Hence, offers no guidance 3 Donald J. Weidner

Morgan v. High Penn Oil con’t. • Rules: To be actionable, an interference must be: 1. Substantial; and 2. it must be either: • Intentional* – 3 different approaches 1. For purpose of causing harm 2. Knowing that harm will result 3. Knowing that harm is substantially certain AND • Unreasonable – 2 very different approaches 1. Look only at the level of interference (“threshold test”)** 2. Balance (“Restatement”) Gravity of harm vs. utility of conduct *”A person who intentionally creates or maintains a private nuisance is liable for the resulting injury. . . regardless of the degree of care or skill exercised by him to avoid such injury” ** Under the threshold test “for unreasonableness, at least one court has said that the social utility of the actor’s conduct is irrelevant → balancing is not admissible into evidence. 4 Donald J. Weidner

Morgan v. High Penn Oil con’t. Or • Unintentional AND • Resulting from activity that is – Negligent – Reckless or – Abnormally dangerous • Note: Intentional torts typically result in liability without regard to – Substantiality of harm or – Reasonableness of activity • In effect, there are extra defenses if there is no physical invasion. But see Martin subjected trespass to utilitarian analysis. 5 Donald J. Weidner

“Utilitarian Analysis” of Restatement Utilitarian Analysis Balances the Gravity of the Harm against the Utility of the Actor’s Conduct • Gravity of Harm. Relevant factors: – Extent and character of harm; – Social value of neighbor’s use that is harmed; – Suitability to the locality of neighbor’s use that is harmed; – Burden on neighbor to avoid harm that is alleged. • Utility of actor’s conduct. Relevant factors: – Social value of actor’s conduct; – Suitability of actor’s conduct to locality in question; – Impracticality of actor’s preventing the harm. 6 Donald J. Weidner

Morgan v. High Penn Oil con’t. • Text says: The utilitarian analysis suggests essentially a negligence analysis. • It also suggests you can identify the “actor. ” – The essence of the Coase theorem is reciprocity: you simply have 2 conflicting land uses. • How do you apply the utilitarian analysis to a noisy apartment house air conditioning unit? 7 Donald J. Weidner

Estancias Dallas Corp. v. Schultz • In 1969, an apartment house was completed with 155 apartments in 8 buildings. – An air-conditioning unit and tower that served the entire complex (all 8 buildings) was located at the back of the complex, about 5 feet from the neighbor’s property line – 55 feet from the neighbor’s back door. • Neighbor says: – Can no longer entertain in their back yard; – Can not carry on normal conversations in their home, even with doors/windows closed; – Interferes with their sleep at night. 8 Donald J. Weidner

Estancias Dallas Corp. v. Schultz, con’t. Estimated decline in value of land (Neighbors’ estimate) → $ 15, 000 Cost of this unit (single unit for all 8 bldgs. ) → $ 80, 000 Cost savings by this unit (separate units for 8 bldgs. would have been $40, 000 more) → $ 40, 000 Cost to relocate system → $150, 000 Cost to buy the Neighbors’ land → $ 25, 000 [Note: Here there was an award of past damages, $9, 000 to the wife, $1, 000 to her husband, for personal discomfort and health impairment]. Is there a nuisance here? Under what analysis? Why didn’t the utility of Δ’s conduct ($40, 000 savings) outweigh the harm to neighbors’ land, which neighbor estimates to be only $15, 000? What are the arguments in favor of an injunction remedy? What are the arguments in favor of a damage remedy? 9 Donald J. Weidner

Estancias Dallas Corp. v. Schultz, con’t. • Doctrinally, the court says: – After we have determined a nuisance exists, we must – Balance the equities to determine whether an injunction will issue [as opposed to damages] • Injunctive relief should be granted unless an injunction would harm the public interest • How did the court balance the equities? – Do the numbers show that the utility of the apartment owner’s conduct outweighed the gravity of the harm to the neighbors? • Restatement looks at the social value of the actor’s conduct. • “We find little or no testimony. . . reflecting benefit to the public generally. There is no evidence that there is a shortage of apartments in the City of Houston and that the public would suffer by having no place to live. ” 10 Donald J. Weidner

A Further Note on Coase • Two basic ways to view Estancias 1. Apartment has inflicted harm on Residence – What relief shall we provide against apartment? 2. The problem is reciprocal – • To avoid the harm to Residence is to inflict harm on Apartment Under a reciprocity analysis 1. The real question that has to be decided is: Should Apartment be allowed to harm Residence or should Residence be allowed to harm Apartment? 2. The problem is to avoid the more serious harm 3. We need to know 1. the value of what is obtained and 2. the value of what is sacrificed to obtain it 11 Donald J. Weidner

More Coase • The authors conclude that, under the Coase approach – Coase would want us to compare the Oil Co’s abatement costs to the plaintiff’s damages • – • • or to the cost of plaintiff’s avoidance measures, whichever is less Morgan is correct if the cost of abatement to the High Penn Oil Co. is less than the costs its operations necessarily impose on the plaintiffs Does it follow that plaintiffs should bear the costs of avoidance if they are the cheapest cost avoiders? There are two separate questions: 1. What is the cheapest way to avoid the problem? 2. Who should bear the costs of avoidance? • For example, in Morgan, you might conclude that the cheapest abatement measures can be taken by the plaintiffs – but that as a matter of fairness the Oil Co. should bear those costs 12 Donald J. Weidner

Nuisance – Introductory Recap Text: An interference with use and enjoyment of land, in order to give rise to liability, must be: – Substantial; and – it must be either: • Intentional – 3 different tests » For purpose of causing harm » Knowing that harm will result » Knowing that harm is substantially certain AND • Unreasonable – 2 fundamentally different approaches » Level of interference (“threshold test”) » Balance (“Restatement” “utilitarian” approach) Gravity of harm vs. utility of conduct 13 Donald J. Weidner

Nuisance – Introductory Recap con’t. Or • Unintentional AND • Resulting from activity that is – Negligent – Reckless – Abnormally dangerous 14 Donald J. Weidner

“Utilitarian Analysis” of Restatement Utilitarian Analysis Balances the Gravity of the Harm against the Utility of the Actor’s Conduct • Gravity of Harm. Relevant factors: – Extent and character of harm; – Social value of neighbor’s use that is harmed; – Suitability to the locality of neighbor’s use that is harmed; – Burden on neighbor to avoid harm that is alleged. • Utility of actor’s conduct. Relevant factors: – Social value of actor’s conduct; – Suitability of actor’s conduct to locality in question; – Impracticality of actor’s preventing the harm. 15 Donald J. Weidner

The Second Restatement • • The Second Restatement moves an intentional nuisance closer to an intentional trespass—limiting somewhat the defense of reasonableness. Under the Second Restatement, an intentional nuisance is unreasonable: 1. 2. • • if the gravity of the harm caused outweighs the utility of the defendant’s conduct, or, [Even if the utility of the conduct outweighs the gravity of the harm, ] if there is serious injury and the defendant could compensate for this and like injuries and still stay in business. The balancing under (1) is adequate if the suit is for an injunction. The question of the financial burden of the cost of compensating for the harm under (2) is appropriate if the suit is for damages. 16 Donald J. Weidner

Boomer v. Atlantic Cement • Δ Cement company is sued by a group of neighbors who allege that its operations cause dirt, smoke, and vibrations that reduce the value of their property. Πs seek damages and injunctive relief. • Court of Appeals says: – Yes, nuisance; – Yes, injunction, but – Injunction lifted on payment of permanent damages. • Stated differently, the Court give the neighbors and entitlement but enforces it with a damage remedy. 17 Donald J. Weidner

Boomer v. Atlantic Cement con’t. • Boomer overrules the following old law: – Where a nuisance has been found and where there has been any substantial damage…an injunction will be granted. • Is there balancing either – To find a nuisance? • None is discussed. – To decide whether an injunction will be the remedy? • Court denies an injunction because of “the large disparity in economic consequences of the nuisance and the injunction. ” – “The total damage to plaintiffs’ properties [$185, 000] is. . . relatively small in comparison with the value of defendant’s operation [$45, 000] and with the consequences of the injunction which plaintiffs seek [300 jobs]. ” 18 Donald J. Weidner

Boomer v. Atlantic Cement con’t. • What is it about this case that moved the court to change the law? – There are many polluters and this single cement plant has been the target of many neighbors. – Any one neighbor could hold out. – Many neighbors cold assert loss beyond “economic loss. ” – Issues of causal complexity. – Cost to avoid nuisance? Rate of research is beyond the control of cement co. – Don’t want to shut down cement co. when it can not pass on its cost. – “all of the attributions of economic loss to the properties on which Πs’ claims are based will have been redressed. ” – The risk of being required to pay permanent damages to injured property owners is a reasonable effective spur to research for improved techniques to minimize nuisance. – Theory of damages: the “servitude on land’ of Πs imposed by Δ’s nuisance. 19 Donald J. Weidner

Spur Industries v. Del Webb • In 1956, feedlots were developed by Spur’s predecessor in interest. – “This area is well suited to cattle feeding. ” • In 1959, Del Webb begin to plan Sun City, several years after feedlots were established in this primarily agricultural area. – Del Webb purchased 20, 000 acres of farmland at $750 an acre, considerably less than land closer to Phoenix. • In 1960, Spur purchases the feedlots and begins expanding. • By 1962, Spur had gone from 35 to 114 acres. 20 Donald J. Weidner

Spur Industries v. Del Webb con’t. • At the time of suit, Spur was feeding up to 30, 000 head of cattle, producing over 1, 000 pounds of wet manure a day. • Spur’s activity was not ultra-hazardous, nor was it recklessly or negligently conducted. – Spur used good feedlot management and good housekeeping practices. • By the time of suit, Spur and Del Webb had expanded to within 500 feet of each other. 21 Donald J. Weidner

Spur Industries v. Del Webb con’t. • “neither the citizens of Sun City, nor Youngstown [a small retirement community (adjacent to Sun City) formed just two years before Spur’s predecessor commenced the feedlot] are represented in this lawsuit and the suit is solely between Del E. Webb Development company and Spur Industries, Inc. ” • Del Webb “[alleged] that in excess of 1, 300 lots in the southwest portion were unfit for development for sale as residential lots because of the operation of the Spur feedlot. ” – If the lots became marketable at, say $5, 000 each, sale of the lots alone would yield Del Webb $5, 000 per x 1, 300 lots = $6, 500, 000. – Perhaps more profit would lie in home construction and sale. 22 Donald J. Weidner

Spur Industries v. Del Webb con’t. • 2 Issues: – May a feed lot be enjoined at the suit of a real estate developer when the feedlot becomes a nuisance only because of the developer’s activities that bring residences into the area? – If the feedlot is enjoined, may the developer be required to indemnify the feedlot for losses caused by the injunction? • Arizona statute declares this to be an enjoinable “public nuisance” “dangerous to the public health” in a “populous area” “as far as the people in the southern portion of…Sun City were concerned. ” 23 Donald J. Weidner

Spur Industries v. Del Webb con’t. • Court cited Boomer for the proposition that, in the balancing of the conveniences cases, [presumably, private nuisance cases] damages may be the sole remedy – noting, further, that “[w]here the injury is slight, the remedy for minor inconveniences lies in…damages rather than in …injunction. ” – Approving and applying these notions, the court said that “At most, residents of Youngstown [the earlier, smaller retirement community that did not come as close to Spur as Sun City] would be entitled to damages rather than injunctive relief. ” 24 Donald J. Weidner

Spur Industries v. Del Webb con’t. • The court said the statute declared Spur’s operation of the feedlot to be a public nuisance viz-a-viz the citizens in the southern part of Sun City. – Even though those citizens were not a party to the suit, they “could have successfully maintained an action to abate the nuisance. ” – “Del Webb, having shown a special injury in the loss of sales, had standing to bring suit to enjoin the nuisance. ” • Even though: – if Del Webb were “the only party injured, we would feel justified in holding that the doctrine of ‘coming to the nuisance’ would have been a bar to the relief asked by Webb. ” 25 Donald J. Weidner

Spur Industries v. Del Webb con’t. • Was Del Webb guilty of tortious confiscation? • Is a judicial “taking” avoided because compensation was paid? • The first user with sunk cost of investment gets investment protected with a damage remedy – Del Webb is forced to internalize the cost it has imposed on the first user, Spur. • Del Webb can presumably pass on the costs to new buyers – Second users will have to choose among competing locations, selecting one with the lowest total costs – Some have said this prevents “demoralization costs” that might arise from an injunction against a longestablished user in favor of a newcomer 26 Donald J. Weidner

Nuisance – Four Outcomes • Common law courts “fiddled around with rules of reasonableness” to locate the entitlement • And with doctrines like “balancing the equities” to decide the appropriate remedy. • Law and economics suggests a clearer or more functional way – either to rationalize what courts have done (a positive view) – or suggests what they should do (a normative view) 27 Donald J. Weidner

Nuisance – Four Outcomes • Some Terms – P = Polluter – R = Receptor – E= Entitlement 1. If P and R are placing competing demands upon, say, the air, which of them should have the right to use the air —the Entitlement? 2. How should the Entitlement be protected? 28 Donald J. Weidner

Nuisance – Four Outcomes • To protect E with an injunction is to say that E may not be interfered with except upon payment to the holder of E of an amount acceptable to the holder of E. – There must be a voluntary transaction. • To protect E with damages is to say that E may not be interfered with except upon payment to the holder of E of an amount determined by the court to be acceptable compensation. – There is no voluntary transaction. 29 Donald J. Weidner

Nuisance – Four Outcomes • The goal: Locate E and protect it by the rule that, in a given case of conflict over a resource, yields the best chance of achieving – efficiency and – fairness. • Efficiency means maximizing the value of the resource, given the conflicting wants of P and R. • Fairness means everything else that suggests who should have E and how E should be protected. 30 Donald J. Weidner

Nuisance – Four Outcomes • Since Entitlement can be in either Polluter or Receptor, and protected by either an injunction or damages, there are 4 possible outcomes 1. Use continues – no relief to Receptor • Gives the E to P that P can choose to sell or not to sell – Protect P’s E with a property rule 2. Use continues if Polluter pays damages to Receptor (Boomer) • Recognizes a property right in Receptor but forces Receptor to sell it to Polluter if Polluter is willing to pay for it – Protect Receptor’s Entitlement with a liability rule 3. Use must stop (Estancias) • Gives the property right to the Receptor that Receptor can choose to sell or not to sell – Protect Receptor’s entitlement with a property rule 4. Use must stop if Receptor pays damages to Polluter (Spur) • Recognizes a property right in Polluter but forces Polluter to sell it to Receptor if the Receptor is willing to pay for it – Protect Polluter’s right with a liability rule 31 Donald J. Weidner

Remedy for Nuisance (cont’d) For Damages For Injunction Many polluters. Firmest support of property rights in neighbors. Any neighbor granted the injunction could hold out [and prevent bargaining] Protects land in natural condition. Protects against non-economic injury. Even in two-party situation, bi-lateral monopoly problems arise. Provides continuing incentive to find cleaner ways of doing business. Theory of damages: “The servitude imposed on land. ” Forces polluter internalize all cost. Damages may be hard to calculate Can’t put burden of all R&D on one polluter. Avoid shutting down a plant when it cannot pass on its costs. Can fully address all claims to economic loss. Can encourage efficiency by internalizing all economic cost. 32 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. LAKE 3 ½ miles ERIE Lake Shore Blvd. 3½ miles Zoned St. Clair Ave. HEAVY INDUSTRY [Heavy part of Ambler Realty’s tract] 5, 000 -10, 000 people Appellee’s tract in Q: 68 acres Lake Shore Railroad Nickel plate railroad Euclid Ave. Restricted residential plats to East and West Primarily vacant land [nothing there except farms]. In 1922, the Village Council adopted an ordinance establishing a comprehensive zoning plan. 33 Donald J. Weidner

Euclid (cont’d) Because the scheme is cumulative zoning, U 6 can have in it all uses other than those completely prohibited Nickel Plate Railroad 130 Max. Apt. Houses U 3 620’ E. 204 th St. E. 196 th Street U 6 Max. 2 family dwellings U 2 U 6 Max: Heavy Industry U 3 Max: Apt. houses (no industry) U 2 Max: 2 family dwellings Euclid Ave. Primarily U 1 LO’s 68 acre tract “comes under U 2, U 3 and U 6. The larger part of LO’s tract is U 6 [none of Ambler Reality’s parcel is in U 1]. Relief sought: enjoin enforcement of zoning ordinance. Attack: apparently to the ordinance “on its face. ” 34 Donald J. Weidner

Euclid (cont’d) • Underlying principles of Euclidean zoning: – Segregation of uses is desirable. • Different uses harm each other. – Wholesome housing is the central problem, to which all else is subsidiary. • Wholesome housing is, preferably, single-family detached homes with a yard around. • 2 family homes if single family is not feasible; • Apartment houses, if necessary. – Open spaces are desirable for healthy living. • Open spaces should surround houses. • Hence, setback lines in front, back, sides, minimum lot size requirements, etc. • If feasible, there should be open spaces around factories (industrial parks). – Good planning protects against change. 35 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. (cont’d) • Adjoining Ambler Realty’s tract, “both on the east and on the west, there have been laid out restricted residential plots on which residences have been erected. ” • Court seems to accept as a matter of fact that: – “the normal and reasonably to be expected use and development of that part of appellee’s land adjoining Euclid Avenue is for general trade and commercial purposes” and – “the normal and reasonably to be expected use and development of the residue of the land is for industrial and trade purposes. ” 36 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. (cont’d) • Ambler Realty claimed that the 14 A’s (due process and equal protection) clauses were violated [in addition to clauses of the Ohio constitution]. • Ordinances such as that in Euclid “must find their justification in some aspect of the police power asserted for the public welfare. ” • Nuisance law can provide helpful analogies. • Rational relationship test: – “If the validity of the legislative classification for zoning purposes be fairly debatable, the legislative judgment must be allowed to control. ” 37 Donald J. Weidner

Euclid (cont’d) • Things other than those clearly offensive are excluded. – “But there is no more than happens in respect of many practice–forbidding laws…although drawn in general terms as to include individual cases that may turn out to be innocuous in themselves. ” – “The inclusion of a reasonable margin, to insure effective enforcement, will not put upon a law, otherwise valid, the stamp of invalidity. ” • Court then emphasizes that Euclid “is politically a separate municipality. ” – If it is proper to separate industrial from residential, it is no less so because it takes the industrial flow from where it would otherwise go. 38 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. (cont’d) • In the future, there may be – “cases where the general public interest would so far outweigh the interest of the municipality that the municipality would not be allowed to stand in the way. ” • According the Court: – “The serious question…involves the validity of what is really the crux of the more recent zoning legislation, namely, the creation and maintenance of residential districts, from which business and trade of every sort, including hotels and apartment houses, are excluded. ” 39 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. (cont’d) • Court: “before the ordinance can be declared unconstitutional, ” “it must be said…that such provisions are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare. ” 40 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. (cont’d) [Legitimate General welfare goal] Basically a presumption of validity [no [Now, the: rational suspect class] “Arbitrary and Unreasonable” relationship “test”] Having “No substantial relation” to a legitimate goal Presumption of validity RECALL: 14 A, § 1: “No state shall…deprive any person of…property, without due process of law; nor deny to any person…the equal protection of the laws. ” 5 A: “No person shall…be deprived of property without due process of law; nor shall private property be taken for public use, without just compensation. ” Euclid was not decided as a “taking” case. 41 Donald J. Weidner

Village of Euclid v. Ambler Realty Co. (cont’d) • Euclid Tests: – Presumption of validity. “If the validity of the legislative classification…be fairly debatable, the legislative judgment must be allowed to control. ” – “[I]t must be said before the ordinance can be declared unconstitutional, that such provisions are clearly arbitrary and unreasonable, having no substantial relation, to the…general welfare. ” • Leaving the Door Open: – “It is true that when, if ever, the provisions…come to be concretely applied to particular premises [they] may be found to be clearly arbitrary and unreasonable. ” 42 Donald J. Weidner

Nectow v. City of Cambridge • Π signed a contract to sell land. • Before the sale was closed, 29, 000 square feet out of 140, 000 of Π’s land was put in R-3, in which dwellings and hotels are permitted (along with schools, churches, clubs). – The new zone excludes all business and industry. – “The effect of the zoning is to separate from the west end of [Π’s] tract a strip 100 feet in width. ” • The buyer refused to close the sale. • Relief sought: Enjoin enforcement of ordinance as it applies to Π; issue Π a building permit. • Attack: Unlike Euclid, attack is “as applied” 43 Donald J. Weidner

Nectow v. City of Cambridge (cont’d) RESTRICTED RESIDENTIAL Some residences Henry Street RR Tracks Π owns eet V A C A N T 264 F 304 Feet Brooklyn Street RESTRICTED RESIDENTIAL Some residences 100 Feet UNRESTRICTED et e 75 F 140, 000 Square Feet Ford Motor Co. Factory Soap Co. UNRESTRICTED 44 Donald J. Weidner

Nectow v. City of Cambridge (cont’d) City of Cleburne v. Cleburne Living Center Equal Protection Assumption of validity Intermediate Review No suspect class Quasisuspect class [gender] Legitimate Goal 1 Rationally Related 2 Important Goal Substantially further [narrowly tailored 1 A] Compelling Goal Suspect Strict 3 Necessary Class* scrutiny [race] *Strict scrutiny will also apply if thee is arguably a direct assault on a fundamental right, such as speech, association. 45 Donald J. Weidner

Nectow v. City of Cambridge (cont’d) • Consider the findings of the master in Nectow: – “No practical use can be made of the land in question for residential purposes. ” • [there would be “no adequate return” on any investment to develop the property for residential purposes]. – “the districting of plaintiff’s land in a residence district would not promote the general welfare. ” • “A court should not set aside the determination of public officers in such a matter unless it is clear that their action ‘has no foundation in reason and is a mere arbitrary or irrational exercise of power having no substantial relation to the public health, the public morals, the public safety or the public welfare in its proper sense. ” 46 Donald J. Weidner

Nectow v. City of Cambridge (cont’d) • Other statements in Nectow: – “the locus is of comparatively little value for the limited uses permitted by the ordinance. ” – Although the Court cited the “no foundation in reason” language of Euclid, it said • “the inclusion of the locus in question is not indispensable to the general plan. ” • The finding that the health, safety, general welfare will not be promoted “is determinative of this case. ” • “[t]he ban of the 14 A” is violated. – Substantive due process? 47 Donald J. Weidner

Nectow v. City of Cambridge (cont’d) • One additional fact that might explain why the court appeared so solicitous for the plaintiff: – “It further appears that provision has been made for widening Brookline street, the effect of which, if carried out, will be to reduce the depth of the locus to 65 feet. ” • The ratio of Nectow: – Because no substantial relation to general welfare, the zoning “comes within the ban of the 14 th Amendment. ” • What is “the ban of the 14 th Amendment” that operates in Nectow? 48 Donald J. Weidner

Standard State Zoning Enabling Act • Section 1, entitled “Grant of Power, ” provides “For the purpose of promoting health, safety, morals or the general welfare of the community, the legislative body of cities. . . is hereby empowered to regulate and restrict” etc. • Section 2, entitled “Districts, ” provides that “For any or all of said purposes the local legislative body may divide the municipality into districts. . . and within such districts it may regulate. . All such regulations shall be uniform for each class or kind of building throughout each district. . ” 49 Donald J. Weidner

SSZEA (cont’d) • Section 3 provides that “Such regulations shall be made in accordance with a comprehensive plan” to promote the general welfare, etc. – Note the authors say the emphasis has been on whether the zoning ordinance is a comprehensive plan rather than “in accordance with” a plan. • Section 7 provides for a board of adjustment (also known as a board of appeals) has the power: * * * – 2. “To hear and decide special exceptions to the terms of the ordinance upon which such board is required to pass under such ordinance. ” – 3. “To authorize. . . such variance from the terms of the ordinance as will not be contrary to the public interest, where, owing to special conditions, a literal enforcement. . . will result in unnecessary hardship. . ” 50 Donald J. Weidner

PA Northwestern Distributors, Inc. v. Zoning Hearing Board • May 4, 1985, Π opens an adult bookstore in Moon Township. – After obtaining the necessary permits and certificates to open business – On leased premises • 4 days later, Moon Township Board of Supervisors published a notice of intent to amend the ordinance to regulate “adult commercial enterprises. ” • 2 weeks later, after a public hearing, the Board adopted an ordinance that imposed extensive restrictions on the location and operation of “adult commercial enterprises. ” – The ordinance included a 90 -day “amortization” provision 51 Donald J. Weidner

PA Northwestern Distributors (cont’d) • The amortization provision – Said pre-existing uses that would be in conflict with the ordinance had “ 90 days from the date that the ordinance becomes effective to come into compliance with the ordinance. ” – “This 90 -day grace period is designed to be a period of amortization for those pre-existing businesses which cannot meet the standards set forth in this amendment to the. . . Zoning Ordinance. ” • Appellant’s adult book store violated the “place restrictions” in the ordinance – it was too close to specified uses 52 Donald J. Weidner

PA Northwestern Distributors (cont’d) • Π appealed to the Zoning Hearing Board to challenge the validity of the amortization provision. – The Zoning Hearing Board upheld the amortization provision • Π appeals that decision to the courts. • The lower court rejected the challenge, citing language from the Sullivan case: – The “distinction between an ordinance restricting future uses and one requiring the termination of present uses within a reasonable period of time is merely one of degree…. ” – Recall, Euclid approved a zoning ordinance that allegedly reduced the value of vacant land by threefourths. 53 Donald J. Weidner

PA Northwestern Distributors, Inc. v. Zoning Hearing Board (cont’d) • Sullivan said, to determine whether the amortization provisions are reasonable: – “The true issue is. . . whether, considering the nature of the present use, the length of the period for amortization, the present characteristics of and the foreseeable future prospects for development of the vicinage and other relevant. . . circumstances, the beneficial effects upon the community that would result from the discontinuance of the use can be seen to more than offset the losses to the affected landowner. 54 Donald J. Weidner

PA Northwestern Distributors (cont’d) • This court rejects Sullivan’s balancing: – A lawful nonconforming use establishes in the property owner a vested property right which cannot be destroyed, unless it is a nuisance, it is abandoned, or it is extinguished by eminent domain. • It views “amortization” very differently than prospective zoning: – A gradual phasing out of nonconforming uses which occurs when an ordinance only restricts future uses differs in significant measure from an amortization provision which restricts future uses and extinguishes a lawful nonconforming use on a timetable which is not of the property owner’s choosing. 55 Donald J. Weidner

PA Northwestern Distributors (cont’d) • Note: the Township argued that there is no “taking” of “property” here because: – Book store can relocate to a site that complies with the place restrictions in the ordinance, or – Book store can use the same site and structure to sell another commodity. 56 Donald J. Weidner

PA Northwestern Distributors (cont’d) • Which view would you take and why? • Court says: A Pennsylvania property owner has a “constitutionally guaranteed right to use. ” • Court says the Pennsylvania Constitution defines the property that cannot be taken. – A use may not be taken • If government desires to interfere with the owner’s use, where the use is lawful and is not a nuisance nor is it abandoned, it must compensate the owner for the resulting loss. • Therefore: – “[T]he amortization and discontinuance of a lawful pre -existing nonconforming use is per se confiscatory and violative of the Pennsylvania Constitution. 57 Donald J. Weidner

PA Northwestern Distributors (cont’d) • The concurring opinion focuses more narrowly on this specific amortization provision – 90 days shut down: – Not enough time for a merchant to close a business. – Specifically, the merchant’s contractual obligations may extend beyond 90 days. – 90 days may not give him time to arrange an alternative method of earning an income. – Forcing a liquidation within 90 days might prevent the owner form obtaining a reasonable return on investment. 58 Donald J. Weidner

PA Northwestern Distributors (cont’d) • Concurring Opinion: Factors in Reasonableness of Amortization Period – Nature of the use – Amount invested in the use – Number of improvements – Public detriment caused by the use – Character of the surrounding neighborhood – Amount of time needed to “amortize” the investment. – Any circumstance bearing on a balance of public gain versus private loss. 59 Donald J. Weidner

PA Northwestern Distributors (cont’d) • Because of the approach the Court took, it did not get to any 1 A issues. • See FN 6 at p. 975. The Moon Township Ordinance, adopted in May, 1985, adopted the dispersion technique approved in 1976 in Young v. American Mini-Theaters. – That and City of Renton v. Playtime Theatres are the two major S. Ct. cases. – 10 years after Detroit v. American Mini-Theaters, Renton v. Playtime Theaters approved a concentration strategy. 60 Donald J. Weidner

1 A Analysis is Unclear • As far as we can tell, this ordinance would not apply to a Christian Science book store [which presumably would not be classified an “adult commercial enterprise. ”] • 1 A analysis: Ordinarily, a content based ordinance is subjected to strict scrutiny. – Compelling goal – necessity 61 Donald J. Weidner

1 A Analysis is Unclear (cont’d) • Renton says the goal is not to restrict the content (speech itself); – rather, the goal is to eliminate or reduce the secondary effects of the speech – decline in quality of neighborhood, prostitution. – If there alternative channels of communication, then that is a good indication that it is not aimed at content. 62 Donald J. Weidner

1 A Analysis is Unclear (cont’d) • Once you decide that the ordinance is one that does restrict speech (although not content based), that is, it is a “time, place and manner” regulation that is aimed only at secondary effects; then you have to decide whether it meets intermediate review. – Important (substantial) goal – Narrowly tailored • [vs. “substantially further” in equal protection cases] • Does it leave other channels of communication? 63 Donald J. Weidner

Vested Rights/Estoppel • Text says “vested rights” doctrine varies – with some jurisdictions having statutes. • The “critical variables” include: – How far the developer has gone in obtaining governmental approvals; – How much money has been spent in good faith; and – On what the money has been spent. 64 Donald J. Weidner

Vested Rights/Estoppel (cont’d) • Note that the plans to engage in some particular activity are generally not sufficient. • However, some cases say that sufficient commitments have been made when: – Plans drawn – Permits obtained – Site prepared – Construction begun. • Estoppel: It is a matter of “conjecture’ whether estoppel differs in any significant way from the vested rights theory, says text. 65 Donald J. Weidner

Flexibility in Euclidian Zoning • 4 basic ways of putting flexibility into Euclidean zoning: – Continuation of nonconforming uses – Variance – Special exception – Zone change 66 Donald J. Weidner

Commons v. Westwood Zoning Board of Adjustment • Plaintiff, a builder, contracted to buy a lot on the condition that he be permitted to construct a single-family residence on it. • A variance was applied for to permit him to do that. • The request was for a variance from the – Area requirement • (min. of 7500 sq. ft. to build [vs. 5190 sq. ft. ]) – Minimum frontage requirement • (75’ requirement but a 30 foot wide lot) 67 Donald J. Weidner

Commons v. Westwood (cont’d) • Recall SSZEA § 7 provides that a Board of Adjustment may be appointed, inter alia, to grant variances: – “where, owing to special conditions, a literal enforcement…will result in unnecessary hardship” PROVIDED – The variance “will not be contrary to the public interest” • [what Commons v. Westwood calls “the negative criteria]. 68 Donald J. Weidner

Commons v. Westwood (cont’d) • Property in question was a vacant lot – – the only undeveloped property in a neighborhood of one and two-family dwellings. • Π’s and their predecessors in the title have owned the property since 1927. • The ordinance was adopted in 1933, with no minimum frontage or minimum area requirements. • In 1947, an amendment to the ordinance adopted minimum frontage and minimum area requirements. – Fewer than 25% of the homes in the area satisfied the new minimum frontage requirement. • In over 30 years, only 2 more homes have been built, one of them not meeting the minimum frontage requirement. 69 Donald J. Weidner

Commons v. Westwood (cont’d) Zoning: the minimum frontage to build is 75 feet. The lot in question is only 30 feet wide. – Π wants to put up a house that is 19 feet wide. Why did the neighbors appose the Π’s application for a variance? – House on a 30 foot lot would be aesthetically displeasing; – Proposed house would differ from scheme because garage would be in front; – Proposed house would impair the value of property in the are; – Concern about privacy – spillover effects – noise and trespassing. 70 Donald J. Weidner

Commons v. Westwood (cont’d) • Why did the court reverse the denial of the variance/ – Unnecessary hardship – The negative criteria Undue Hardship • The test for “undue hardship? ” – “When the regulation renders the property unusable for any purpose, the analysis calls for further inquiries which may lead to a conclusion that the property owner would suffer an undue hardship. ” 71 Donald J. Weidner

Commons v. Westwood (cont’d) • So, only if the property is “unusable for any purpose, ” do you look further? • If you look further, look to: – The origin of the existing situation. • Was the hardship self-inflicted? – Ex: Did the owner of a conforming lot convey away a portion of that lot leaving herself with a nonconforming lot? 72 Donald J. Weidner

Commons v. Westwood (cont’d) – Has the owner attempted to bring the lot into compliance or end the unusability? • In this case: – the owner could have offered to buy additional properties from the neighbors; or – the owner could have offered to sell some of the land (or all of the land) to the neighbors. » “If. . . an owner is willing to sell at a ‘fair and reasonable’ price and the adjoining property owners refuse to make a reasonable offer, the ‘undue hardship’ would exist. ” 73 Donald J. Weidner

Commons v. Westwood (cont’d) The Negative Criteria • Assume that the test is the one in SSZEA: – The variance cannot be issued if it would be “contrary to the public interest. ” – The less of an impact, the more likely the restriction is not vital to the public interest. • Who is the public? – General public interest being asserted? – Property values (or other interests) of the immediate neighbors being asserted? 74 Donald J. Weidner

Commons v. Westwood (cont’d) • • “Lurking in the Background: The “Taking” Issue Is a denial of a variance that will “zone the property into inutility” an exercise of the eminent domain power such that compensation must be paid? Complete denial of use, BUT Variance would be contrary to public interest. Taking if denial. 75 Donald J. Weidner

Commons v. Westwood (cont’d) • Court suggests possible remedy: – Deny the variance on the condition that the neighbors purchase the land for a fair price. [“reverse damages” —analogous to the termination of covenant and Spur situations]. – This remedy puts the economic burden on the immediate neighbors, who will receive the most direct benefit from leaving the land in an undeveloped state • As opposed to the taxpayers at large, who would have to pay if this were treated as a “taking” • How do you determine price? – “on the assumption that the variance has been granted” so that a home can be constructed. 76 Donald J. Weidner

Commons v. Westwood (cont’d) • Reviewing the decisions of Board of Adjustment: – Undue hardship? • Record does not support conclusion of no evidence of undue hardship. • The board must make “specific finding of fact” – Negative criteria? • Not sufficient for Board to issue “the conclusive statement that the variance would substantially impair the intent and purpose of the zone plan and ordinance. ” – Board must explain reasons for this conclusion. 77 Donald J. Weidner

Commons v. Westwood (cont’d) • The size of the resulting house “in and of itself would not justify a denial of a variance. ” – No health goal – No safety goal • Possibly: If character of neighborhood was affected – both as to aesthetics and – value then a denial may be appropriate. 78 Donald J. Weidner

State v. City of Rochester • • • Owner and buyer entered into a contract for the sale of a 1. 18 acre parcel in a single-family and low-density zone, contingent upon re-zoning the property to permit a 60 -unit condo (later amended to 49 -unit condo). Planning Commission held a public hearing and recommended to the City Council that the rezoning be denied as inconsistent with the City’s land use plan. City Council rejected the recommendation, amending the zoning ordinance and placing the parcel into a high-density residential zone. – Thus permitting the building of a 6 -story, 49 -unit condominium. 79 Donald J. Weidner

City of Rochester (cont’d) • The City Council – Gave no written finding of fact – Gave no reasons – Although minutes indicated they thought the change appropriate in light of the circumstances – Subsequently amended the land use plan to conform to their zone change. 80 Donald J. Weidner

City of Rochester (cont’d) • Neighbors argue: 1. This was a quasi-judicial act presumptively invalid because not supported by written findings of fact based on substantial evidence – Citing Fasano 2. If it was a legislative act, it was arbitrary and capricious because it 1. Was inconsistent with the City’s land-use plan; and 2. Had no reasonable relationship to the general welfare. 3. Was invalid “spot zoning. ” 81 Donald J. Weidner

City of Rochester (cont’d) • Fasano had said – A zone change that affects very few parties as opposed to the public general – Is adjudicative in nature – The burden of justifying the zone change falls on those moving it • including the local legislature – The procedural requirements of adjudication must be met • there must be written finding of fact • and a written statement of reasons • before an impartial tribunal 82 Donald J. Weidner

City of Rochester (cont’d) • Minnesota Rejects Fasano 1. When a municipality adopts or amends a zoning ordinance, it acts in a legislative capacity under its delegated police powers. 2. Its legislative acts are given a presumption of validity. 3. Zoning legislation is good unless it: 1. Has no rational relationship to the general welfare or 2. Is a taking of property without compensation. 83 Donald J. Weidner

City of Rochester (cont’d) • Special exception distinguished – not the same presumption of validity – Indeed, if a landowner requests a “special use which conforms with the zoning ordinance, ” • a denial is “prima facie arbitrary and unreasonable” if the denial is not supported “by written findings of substantial evidence showing the use impermissible under the permit standards of the ordinance” – Substantive difference from a zone change: • In granting or denying a special use permit, a city council has the function. . . adjudicative in nature, of applying specific use standards set by the zoning ordinance to a particular use and must be held strictly to those standards. ” • No special-use permit was available her because the proposed high-density use was not in accordance with existing zone classifications. 84 Donald J. Weidner

City of Rochester (cont’d) • Variance also distinguished: – By statute, a variance may not be granted to permit any use that is not permitted under the zoning ordinance. • Variances are available only with respect to other requirements of the ordinance, such – – • setback requirements and similar provisions. Given it is a legislative act, court refuses: 1. To require it to conform to the existing land use plan, or 2. To lift the presumption of validity because of the failure to conform. 3. But nevertheless looks at rational factors. 85 Donald J. Weidner

City of Rochester (cont’d) • Nor is this invalid “spot zoning” – Same presumption of validity applies when “spot zoning” is raised – “Spot zoning” is a claim of no relation to the general welfare – “Spot zoning” “applies to changes, typically limited to small plots of land, which establish a use classification inconsistent with surrounding uses and create an island of nonconforming use within a larger zoned district, and which dramatically reduce the value for uses specified in the zoning ordinance for either the rezoned plot or abutting property. ” • Variances and special exceptions are sometimes invalidated by reference to this concept. 86 Donald J. Weidner