In the non-fiction best-seller (and Hollywood film) A Civil Action a New England community confronts the very serious consequences that followed when a manufacturing company’s chemical waste contaminated the local water supply. While chemical wastes can continue to present health and environmental concerns, an increasing concern today focuses on a different type of contamination – “nutrient pollution,” which is affecting many of the nation’s waterways. The “civil war” metaphor referenced above reflects the fact that actions to address nutrient pollution can find state and local government entities squaring-off against each other. A recent example is in Iowa, where the City of Des Moines has issued formal notice that it intends to file a suit to enjoin nutrient pollution from neighboring communities.
Background. “Nutrient pollution” may sound like an oxymoron since plants and animals require nutrients as part of their food supply. But too much of a good thing can be bad, which in this case means the nutrients nitrogen and phosphorus. As the U.S. Environmental Protection Agency explains, excessive amounts of nitrogen and phosphorus in rivers, lakes, etc., cause significant increases in algae (“algal blooms”) that deplete the oxygen aquatic life requires. The algae also produce toxins and bacteria that can cause illness for humans through consumption of contaminated fish, shellfish or drinking water. In fact, for several days last summer Toledo, Ohio imposed water usage restrictions, which included a ban on all potable uses, due to nutrient pollution in the form of toxic algae in Lake Erie. In addition, nitrates (a form of nitrogen) in surface waters and groundwater pose a significant health concern because nitrates can lead to serious illness in adults and can be fatal for infants and small children. http://www2.epa.gov/nutrientpollution. Nutrient pollution from the Mississippi River basin (which drains all or portions of 31 states) is also responsible for the more than 5,000 square-mile “dead zone” in the Gulf of Mexico where hypoxia (oxygen deficiency) has excluded many forms of aquatic life. Given these facts, EPA’s admonition is not surprising: “Nitrogen and phosphorus pollution has the potential to become one of the costliest and the most challenging environmental problems we face.” http://www2.epa.gov/sites/production/files/documents/memo_nitrogen_-framework.pdf.
Nutrient pollution results from several factors. That includes urban stormwater runoff, residential sources (e.g., lawn fertilizers, yard and pet waste, certain soaps and detergents), fossil fuel use (increased air emissions of nitrogen) and sanitary wastes (from septic systems and sewage treatment). But while those sources can contribute to nutrient pollution, the primary source, as noted by the National Oceanic and Atmospheric Administration, is agriculture, including fertilizers and animal waste. See generally http://oceanservice.noaa.gov/-products/hypox_t3final.pdf. Paradoxically, however, when Congress enacted the Clean Water Act (CWA) in 1972 (the CWA is the primary federal law for controlling water pollution), it chose to exempt two agricultural categories, agricultural stormwater and return flows from irrigation. Absent the exemptions, those sources could be required to have permits under the Clean Water Act’s National Pollutant Discharge Elimination System (NPDES) program. Although the CWA does not require states to mirror the federal exemptions for agriculture, as a general rule states choose not to be more stringent than the CWA (to do otherwise would be akin to exporting jobs and tax revenue to more lenient states, a non-starter for state policymakers). That is the case with nutrient pollution from agriculture – state regulation is voluntary and generally regarded as inadequate. See https://www.nacwa.org/images/stories-/public/2012-03-06wp.pdf at 15 (voluntary control measures “have been unable to deliver reliable and sustained nutrient loading reductions from the agriculture sector”); see also http://www.gao.gov/assets/660/659496.pdf at 60-61 (water quality improvement is restricted nationally due to inadequate regulatory authority over non-point source pollution, which includes agriculture).
Emerging Battleground. Given the increasing concerns it presents, nutrient pollution has become a catalyst for testing the scope of the CWA’s agricultural exemptions. A recent example is the previously referenced pre-litigation notice the City of Des Moines issued to neighboring counties and their drainage districts last month (although CWA enforcement is primarily a state and federal government responsibility, individuals, organizations and local governments can also file enforcement actions – “citizen suits” – for which a 60-day notice of intent to sue is required). Des Moines’ would-be suit (which could be filed shortly) concerns groundwater the drainage districts remove artificially (using drainage tiles and other conveyances) from moisture laden agricultural lands and then discharge to local rivers. The result is a lower water table, which benefits agriculture through reduced interference with root growth and enhanced crop development. But there’s also a downside: discharging the groundwater to nearby rivers significantly increases the nitrate concentration in the rivers, which are the primary local water supply. That, in turn, requires Des Moines to augment its water treatment system – at considerable cost – to reduce nitrates to meet the federal Safe Drinking Water Act limit. Des Moines’ notice of intent concludes that the drainage districts’ discharges are not covered by the CWA’s agricultural exemptions because they are not stormwater or associated with irrigation, and as consequence are unpermitted discharges in violation of the CWA. There is very little precedent interpreting the CWA’s agricultural exemptions, and it does not appear to address facts such as those pertinent to Des Moines.
It is not yet known whether Des Moines will proceed with litigation. Although extension of the NPDES permit program to a presumably vast number of agricultural sources could be daunting, that concern must be juxtaposed with the increasing national focus on the adverse impact of nutrient pollution from agricultural sources. These concerns far transcend Des Moines’ individual circumstances and implicate a number of additional states, broad agricultural interests and a considerable number of municipalities as well. Developments in this matter will be very useful to monitor.
K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.) involved petitions for declaratory judgment by a construction company and a developer for a refund of what in Oregon are termed “systems development charges” authorized by a New Hampshire statute. Under the statutory scheme, local governments may assess fees for capital improvements; however, if the fees are not spent within six years, they must be refunded. Defendant’s ordinance authorized a refund, but only to the “current owner” of the land assessed. Plaintiff Construction Company paid the fee, which refund was also sought by the original developer. The land in question was sold to homeowners after development and the Town contended that only these successors could claim the refund.
The assessments were levied to build a new Town fire station; however, after some of the funds had been spent for feasibility studies and architectural plans, the voters of the Town declined to authorize construction. The trial court upheld the Town’s restriction of refunds to current owners and granted its motion to dismiss Plaintiffs’ claims, determining that the statutory direction for a refund of unused fees did not require that such refund be paid to the original payee.
On appeal, the court found no factual disputer and reviewed the trial court’s order of dismissal on a de novo basis, as Plaintiffs’ standing was jurisdictional and a question of law over statutory interpretation of “refund,” a term not otherwise defined by the enabling legislation. Plaintiffs contended that local governments must follow the statutory mandate and that “refund” must be given its ordinary meaning of “pay back” or “reimburse.” Plaintiffs also contended that another statute relating to exactions was more specific, providing refunds in those cases to the payer or the payer’s successor in interest. However, the SDC statute did not contain such language and the court declined to insert the same, finding the two statutes enacted at different times and dealing with different situations.
Moreover, the court cited decisions from other courts that allowed refunds to go to other than the original payers and rejected the possibility that local governments could enter into an agreement a payer to have payments specifically refunded to that payer as requiring this arrangement to be made. Moreover, the court declined to use legislative history to interpret the refund statute, finding no necessary ambiguity that would allow for such an examination. Finally, the court rejected Plaintiffs’ takings challenges, finding no adequate preservation of constitutional issues. The court thus affirmed the trial court’s conclusion that the local ordinance authorizing SDC refunds to current landowners to be within the statutory authorization.
This is a case of statutory interpretation. Although Oregon law does not speak to the refund issue, common practice is that unspent systems development charges must be refunded. Refunding those charges to current landowners provides for better predictability in the use of those funds and for allocation of the risk of that possibility as part of the sales price for land.
K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.)
As the Oregon Legislative session moves into full-swing giving spectators a front row seat to frantic lobbying and frenetic lawmaking, the Oregon Court of Appeals issued a decision that should remind those involved in this pastime affectionately known as “sausage-making,” to consider the importance of the deliberations. The decision relates to efforts to remove the oldest home in Lake Oswego, the historic Carman House, from the City of Lake Oswego’s inventory of historic resources and potentially allow for its demolition, as described in my previous blog post. In 1995, the Oregon Legislature passed the statute at issue, ORS 197.772, which precludes a local government from imposing a historic designation on a property over “a property owner’s” objection. Subsection (3) of that same statute further provides that “a property owner” may subsequently seek to remove a historic designation that was imposed. The issue before LUBA and the Court in the case, Lake Oswego Preservation Society v. City of Lake Oswego, was whether a request to remove a designation after it has been imposed must be made by the same property owner who originally objected or whether a subsequent owner may also seek removal.
The general rule when interpreting a statute is to focus on the text and context of the provision. However, courts will also look to the legislative history to determine intent. In the Lake Oswego case, the Court found, as had LUBA, that the text and context for determining who was included as “a property owner” under ORS 197.772 was not particularly helpful and it turned to the legislative history. This history came largely from two hearings before the House Committee on General Government and Regulatory Reform. LUBA keyed into a statement by one of the bill’s authors, when asked whether a subsequent purchaser could seek to remove historic designation, responded that “[w]e haven't thought about that situation.” LUBA also noted that a proposed amendment making clear that in cases where the property owner does not object, subsequent owners are bound to the designation, and was rejected and not included in the engrossed bill. Based on those comments, LUBA concluded that the drafters intended to afford relief only to those property owners on whose property the designation had been imposed.
The Court of Appeals analysis of the legislative history makes no mention of those portions of the legislative history that LUBA found important. Instead, the court highlighted that the legislation was to allow owners that were “coerced into the historic property designation” to seek removal of that designation. The court quoted from another representative summarizing the scope of subsection (3) to include those cases where “property owners were not allowed to consent and government imposed it on them that now they would have an opportunity to remove their property from that designation.” From this, the court concluded that the amendment allows “individuals who own property on which historic designations had been involuntarily imposed by the local government – before the enactment of ORS 197.772 – to have that designation removed.” The court explained that the focus during these committee meetings was on providing relief in cases where a designation was imposed over an owner’s objection and not on whether subsequent purchasers could also take advantage of the previous owner’s objection. Further, the court found that preservation advocates’ concerns that adoption of subsection (3) would have the effect of “dismantling historic districts” and a lack of response by the proponents indicated an intent to have broad effects. As a result, the court concluded that any property owner that has a local historic designation forced on their property may remove that designation.
What is so interesting about this case is that two review bodies looked at the same legislative history and reached diametrically opposing conclusions. Maybe the difficulty is that the Court of Appeals failed to mention, much less explain, why the comments that LUBA found instructive were not helpful. How could the court find that committee discussions focused solely on giving relief to those owners who were “coerced into a historic preservation designation” and from that extend that same protection to property owners who were not coerced but instead knowingly purchased a designated property? If this ruling rests on the conclusion that the legislature intended the effect of ORS 197.772 to “dismantle” historic preservation efforts, legislators, both proponents and opponents, need to be much more descriptive and particular in describing their intent.
Ed Sullivan and I co-author the annual comprehensive plan update for the American Bar Association’s State and Local Government Law Section. The most recent update was just published by the Urban Lawyer and you can read about it here. The article undertakes an annual survey of state and federal cases dealing with the role of the comprehensive plan (sometimes called the “General” or “Master” plan) in land use regulation. That survey and this resulting article illustrate trends in the current use of three modes of perception regarding comprehensive plans by state legislatures and state courts. The first mode, the “unitary view,” is that planning is neither essential nor possibly even relevant to zoning and land use regulation, and it is the local zoning ordinance that is dispositive. The second view, the “planning factor view,” is that a plan is relevant, but not necessarily dispositive of the validity of a land use regulation. The final view, the “planning mandate” view, is that planning is essential to land use regulation. Please review the article for specific examples and commentary on each of these views.
The trend in case law in this update demonstrates increased respect for comprehensive planning, less tolerance for the view that zoning regulations are isolated from their planning roots, and more emphasis on the role of planning when plans are amended or interpreted. We hope you enjoy the article and that the update assists you in your land use battles.
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.