PROPERTY (Spring, 2012) [06/04/2012] Essay exam answer: Facts: George Bailey holds ppi/FSA title to Blackacre (100 acres). The land had been located outside the jurisdictional limits of the town of Bedford Falls, but now the town has grown to surround Blackacre. Over the past 10 years, the use of Blackacre has transitioned from farming uses to other uses. George now uses part of Blackacre for farming (10%), part for a simulated Indian village (“Occupy Outdoors”) (50%), and part for a dumping ground (40%). Currently, George earns 85% of his income from fees gained from the Indian village and fees from the dumping ground; he earns only 15% of his income from the traditional farming use. The town of Bedford Falls passed a new Zoning Ordinance in March, 2011, which placed most of the land in town (including George’s land) within a U-1 Residential zone, which permits only single-family residential use. Nowhere in Bedford Falls does the ZO permit any use for simulated Indian villages, dumping grounds, or farming activities. The Zoning Board recently sent George a complaint indicating that all three of George’s current uses of Blackacre violate the BFZO. BF also claims that his uses harm the character and value of neighboring residences, and that his uses violate certain aesthetic standards in the BFZO. In the alternative, the Zoning Board says that George’s uses of Blackacre amount to a public nuisance. Neighbors of George complain that their private property is being harmed by George’s activities on Blackacre. Analysis & Argument: I. Zoning issues [90-100 possible points]: A. The zoning power is an element of the Police Power. Normally, the zoning power is exercised locally pursuant to a delegation of authority from the state government. Zoning can be adopted so long as it protects or promotes the Public Health, Safety, Welfare. Traditionally, the test for validity of a ZO has been the Rational Basis test: (1) Is the ZO pursuing legitimate public purposes? (2) Does the ZO adopt rational means of pursuing such purposes? Euclid v. Ambler Realty is the classic authority for the validity of zoning under this traditional analysis, especially the protection of low-density residential uses as against commercial uses, or even multi-family residential apartment buildings. B. Facial challenge: Is the ZO valid on its face (in general)? Very likely, yes. Courts defer to legislative judgment adopting ZOs, and presume validity. This BFZO is standard Euclidean zoning -- segregation of uses with preference for single-family residential use; some allowance for commercial and industrial uses. This seems to be a legitimate public purpose served through rational means. But some argument is required regarding the total elimination in this scheme of (1) simulated Indian village; (2) farming; and (3) dump site. Easiest to justify (3); more difficult to show how Public HSW requires (1) and (2). II. C. Challenge ZO validity “as applied” to GB’s uses of Blackacre. This is a more difficult test for the BFZO. The refusal to permit a dump site of any kind in BF is probably reasonable; but this particular dump site does NOT seem to be much of a threat to Public HSW. (Variations on this theme, depending upon specific factual developments that are possible for this scenario.) But why refuse to permit farming, especially on a 100-acre parcel that, in the fairly recent past (10 years ago) was entirely devoted to farming? Harder to justify. And why refuse to permit the simulated Indian village, which has educational and entertainment value (and also adds value to the BF economy)? The Indian village is partially commercial, but also partially short-term residential, use of the land. How does this violate Public HSW? And the explicit denial of these 3 specific uses in BFZO ANYWHERE in BF looks like “spot zoning” against GB. It is possible to justify the validity of the BFZO “as applied” to GB, but harder to do than facial. D. In favor of GB, the best argument is a combination of “prior non-conforming use,” claiming that GB has a vested property interest in his three current uses, all of which were in existence well before the 2011 passage of the BFZO; and the traditional claim registered by “FITFIT.” Several policy reasons to discuss. Pa Northwestern case is most directly relevant authority; some useful distinctions to draw between that case and GB’s situation. No amortization clause mentioned in BFZO, but this remains a possible resolution for this conflict here (if amortization were recognized as valid in Serenity). E. It is also reasonable to discuss the six possible flexibility devices for Zoning: interpretation; revision/amendment; variance; special use (exception); contractual zoning; and PUDs/floating zones/cluster zones. Most relevant here: revision/amendment (Rochester case); variance (Commons case); contractual agreement to vary the zoning applied to GB’s land uses. F. Reasonable to discuss the traditional elements in constituting the Public HSW (protection of character and value of the neighborhood; protection of safety of children; reduction of traffic and congestion; prevention of possible anticipated nuisances; etc.); and some recent non-traditional elements (aesthetic standards; environmental protection; historic preservation; etc.). How many of these values are being served or promoted by the BFZO? Is the BFZO rationally related to these values; or is the BFZO arbitrary and capricious in its apparent zeal punitively to force out GB’s three land uses? Is this classic “spot zoning”? G. Important cases (analogy/disanalogy): starting with Euclid and Pa Northwestern cases, and working one’s way through to the Mt. Laurel case. Almost all of the zoning cases in chapter 11 have something to contribute to this discussion. Eminent Domain issues [45 possible points]: A. GB has been developing Blackacre for 10 years in the two new ways, plus continuing the use as a farm. This economic activity is being gravely diminished (perhaps totally eliminated) by the BFZO. This land use regulation seems to work a “taking” prohibited by the 5th Amendment (unless BF is controlling a nuisance; or unless BF is willing to compensate GB with “just compensation”). III. B. Basic “takings” tests are (1) physical entry or occupation [Loretto case] -- inapt here; (2) nuisance control [Hadacheck case] -- relevant here; (3) diminution in value [both Pa. Coal and Penn Central cases] -- very relevant here; and (4) total loss test from the Lucas case [as modified by Palazzolo case] -- possible here. C. Develop each test as applied to GB’s situation. Both “bright line” tests of “nuisance control” and “total elimination of value” arguably apply to some portion of GB’s situation. The “dump site” use is most likely candidate as a nuisance; and simulated Indian village difficult to convert to any other use (so a total loss for GB?). But difficult to see how either bright line test applies to loss of farming activity. Diminution of value is in the range of 85% - 100% of GB’s current income. But other uses of Blackacre still possible (anything permitted within U-1 Residential zone), which seem to allow SOME residual value to be found in Blackacre for the benefit of GB. D. Ad hoc analysis is relevant here, given the criteria from Penn Central: economic impact; distinct investment-backed expectations; nature of governmental action. Also a question arises concerning conceptual severance of this land -- Do we treat each of GB’s three uses separately? Or take them together in the aggregate? Other possible issues: To what extent does BFZO work a taking when it regulates traditional farm land into non-farming use only? Can settled investments and expectations be treated so cavalierly? Can aesthetic values be a part of Public HSW (which does NOT require any compensation); or must such aesthetic regulation be paid for in the form of just compensation (as was debated in the Penn Central case)? And so on … . E. Applicable case law includes all of the cases we read in chapter 12 (with the possible exception of the Kelo case, unless one happens to question whether there is a “public use” aspect to this governmental regulation of GB’s land). Best approach is to elaborate on comparisons and contrasts among facts of cases. Nuisance issues [80-90 possible points]: A. Public nuisance requires a substantial and unreasonable interference with the Public HSW (not private property interests). Spur v. Del Webb illustrates the specifics of public nuisance doctrine. (No need to plead "special injury" here since a govt'l entity is bringing the action for public nuisance. If the neighbors wish to contribute to the public nuisance case, however, then they would have to satisfy the special injury requirement. But the neighbors are more likely to plead a private nuisance action.) How substantial is the interference of GB’s activities? How unreasonable? (Case comparisons may be illuminating here.) B. One major issue is whether GB's pre-existing farming use of Blackacre can be re-defined as constituting a nuisance at this late date. GB's farming activities seem relatively innocuous. But his farming activities could be polluting the air, or disturbing single-family residential buildings in the neighborhood, or even attracting pests -- so much depends upon GB's specific activities and their consequences. In addition, the simulated Indian village seems relatively innocuous. But it could be causing traffic congestion, over-crowding, and general noise problems (as well as possible transients in the area being attracted to the village). On the other side, farming provides valuable services and produce for the town (no description of farm animals in the hypo -- but these are possible variations on the theme, both attractive and unattractive -- Spur v. Del Webb). And the simulated Indian village pumps revenue into the town’s economy -- so, in a Boomer v. Atlantic Cement-like situation, do we want to encourage or discourage GB’s enterprise? C. GB's dumping activities seem much more likely to be causing a public nuisance; but some possible scenarios might show otherwise. Is there a threat to pollution of the ground waters from the discarded materials? Are dilapidated autos being dumped (in addition to chemicals or other problematic items)? Are there fumes from the discarded items? Attraction of rodents and other vermin? All of these are possibilities that could be discussed and analyzed. D. Are there changed circumstances or conditions that justify the new BFZO (as was done in Euclid, per Justice Sutherland) as land use regulation that prevents or avoids potential nuisances? On the other side, is this an instance of “coming to the nuisance” by Bedford Falls? Did the town’s development create or aggravate the nuisance situation? IF a nuisance is found, then should there be a “BTE” in the remedy portion? Also, questionable whether allegation of “eyesore” status re: George’s use(s) is an attempt to expand the traditional Public HSW into realm of aesthetics. How should we treat our changing definitions of Public HSW? (In Lucas, Justice Scalia permitted only well-settled, historically established “background” principles of property rights and nuisance law to be relied upon by both the property owner and the government; but here should we be more expansive?) E. Indicate application here of both the CL "threshold" (illustrated by Morgan and Schultz cases) and the ML Restatement tests for liability (weighing gravity of harm against social utility of defendant’s behavior). Possible injunctive and monetary remedies. As mentioned above, one very important element is the question, “Did Bedford Falls ‘come to the nuisance’?” That point was quite important in Spur v. Del Webb, but not so important in resolving Hadacheck. Possible to argue for a Spur-type remedy in this instance – we might issue an injunction against George’s use(s), but then require BF to reimburse at least some of George’s moving expenses. F. Additional comparisons and contrasts are possible in one's analysis here. G. There is a less detailed possibility of a private nuisance action being brought here by George’s neighboring landowners. A private nuisance requires the substantial and unreasonable interference with another property owner’s use and enjoyment of his or her property. The neighbors claim that GB’s property is an “eyesore.” Is this an allegation of loss in property value? Or is it an aesthetic claim about the unsightly appearance of GB’s property? Or both? How might the neighbors develop this into a claim of private nuisance? H. Further argument and analysis depend upon developments of the available facts.