Federal And State Court Updates

Eighth Circuit Rules on Minneapolis Zoning Law

Ninth Circuit Issues Ruling on Applicability of Noerr-Pennington Doctrine in Zoning Decision

Maryland Rules on Definition of "Fair Market Value"

Maine Supreme Court Strikes Down City's Reduction of Just Compensation

Washington Supreme Court Rules on Restrictive Covenants

Federal:

Eighth Circuit Holds That Minneapolis’ Policy Waiving Spacing Requirements For Supportive Housing is Not Racially Motivated

The 8th Circuit rejected a challenge of behalf of Minneapolis residents to enjoin the construction of a supportive housing facility for homeless families.  Ventura Vill., Inc. v. City of Minneapolis, 419 F.3d 725 (8th Cir. 2005).  Minneapolis zoning laws required that such facilities be at least a quarter mile from other designated facilities, including other supportive housing facilities.  The City had a policy of waiving this spacing requirement.  The residents challenged the policy on the basis of the Fair Housing Act, alleging that the City relaxed the spacing requirement in predominantly black neighborhoods, but not in predominantly white neighborhoods in order to concentrate supportive housing facilities in black neighborhoods.  The court rejected the residents’ argument because the evidence showed that the City had approved all eleven requests for waivers from the spacing requirement and six of the eleven waivers involved facilities to be built in predominantly white neighborhoods.

Ninth Circuit Holds That The Noerr-Pennington Doctrine Applies to a Citizen's Efforts to Encourage Government Officials to Make Certain Zoning Decisions

The U.S. Court of Appeals for the Ninth Circuit recently held that the Executive Director of an organization devoted to preserving low-income housing was immune from suit under the Noerr-Pennington Doctrine for his efforts to lobby a local zoning official.  Empress LLC v. City & County of San Francisco, 419 F.3d 1052 (9th Cir. 2005).  Under the Noerr-Pennington Doctrine, parties are not subject to liability for their efforts to encourage government officials to exercise their power.  In this case, the Executive Director had written a letter to the San Francisco Zoning Administrator arguing that the Empress Hotel had abandoned its authorized tourist use by closing for an extended period of time and therefore had to be used exclusively for residential purposes unless the hotel could satisfy current zoning regulations.  The Zoning Administrator reached the same conclusion and determined that the hotel could only be used for residential purposes.  The hotel owners alleged that the letter and the Zoning Administrator’s decision to take the action suggested in the letter amounted to a conspiracy to unlawfully delegate zoning authority and therefore fell under the sham exception to the Noerr-Pennington Doctrine.  The Ninth Circuit disagreed reasoning that “there is no ‘conspiracy’ exception to the Noerr-Pennington doctrine that applies when government officials conspire with a private party to employ government action as a means of depriving other parties of their federal constitutional or statutory rights.”

State:

Maryland’s highest court recently held that the definition of “fair market value” was broad enough to encompass rental losses that are attributable to the authority’s conduct prior to actual condemnation.  Reichs Ford Rd. Joint Venture v. State Rds. Comm'n of the State Highway Admin., 880 A.2d 307 (Md. 2005).  In 1988, authorities informed the landowner of their intention to acquire the landowner’s property in order to construct a highway interchange.  The landowner leased the property to a company that used it to operate a gas station and in 1997, the company opted not to renew their lease because of the possibility of condemnation.  The landowner was unable to locate a new lessee because of the looming condemnation.  The court determined that the legislative history demonstrated that it was the intention of the legislature to define the term “fair market value” broadly.  With this in mind, the court held that the definition was broad enough to encompass damages such as lost rent incurred as a result of the authority’s pre-condemnation conduct and remanded the case for further proceedings.

Maine’s High Court Rules that City is Not Entitled to Reduce Condemnation Award by the Value of Other Land Transferred to the Owner of Condemned Property

In this case the city wished to relocate a road and needed to acquire a portion of the owner’s property to do so.  J.A. Rapaport Family L.P. v. City of Brewer, 877 A.2d 1077 (Me. 2005).  By happenstance, the owners owned both portions of the property – the old portion and the new portion.  The City attempted to offset the award by the value of land in the road’s current path that the City anticipated granting to the landowners once the road was relocated.  The court held that the happenstance of landowners owning part of the old and new paths for the road, such that landowners stood to receive a portion of the discontinued road in the future if they retained title to the property, did not justify the city's reduction of the just compensation owed to landowners.  Further, the court noted that “fair market value” did not include an offset to account for the fact that a property stood to acquire other land.

“The happenstance of the Rapaports owning part of the old and new paths for the road, such that they stood to receive a portion of the discontinued road in the future if they retained title to the property, did not justify the City's reduction of the just compensation owed to the Rapaports. As the Superior Court aptly stated, "[t]he City's expression of intent to discontinue that original section [of road] is not an adequate substitute for a valid creation of property rights," and just compensation may not be "quantified based on events that occur subsequent to the immediate time when the taking occurs."  Id. at 1079.

Washington Supreme Court Rules that a Restrictive Covenant’s Archaic Prohibition on Sales to Racial Minorities Did Not Defeat the Enforceability of the Remainder of the Restrictive Covenant

The Washington Supreme Court reversed a lower court’s decision to invalidate a restrictive covenant on the basis of an offensive racial restriction because the Supreme Court determined that the racial restriction was severable and therefore the remainder of the covenant was enforceable.  Viking Props. v. Holm, 155 Wn.2d 112 (Wash. 2005).  The decades old restrictive covenant prevented owners from selling to racial minorities and it also prevented them from building more than one dwelling per half acre.  One of the owners asked to be released from the lot size restriction and when that request was refused the owner successfully sued to invalidate the entire covenant largely on the basis of the racial restriction which the owner successfully argued was not severable.  The Washington Supreme Court reversed, holding that the racial restriction and the lot size requirement were logically distinct and therefore the racial restriction could be severed without any impact on the enforceability of the lot size requirement.

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