HIGHWOOD GENERATING STATION ZONING CHANGE

(AND MORE)Brian Hopkins

Deputy County AttorneyCascade County

OUTLINE

• Chronology to includes Rounds I and II of zoning change

• Appeal to District Court and Supreme Court

• Appeal of location/conformance permit • Judicial Issues in Round II• Collateral Issues

Zone Change – Round I (short version)

• October 10, 2006 – Applicants filed Rezoning Petition for 800 acres of land from A-2 to I-2

• Applicants were landowners with Southern Montana Electric (SME) guiding them

• Zone change for construction and operation of 250 MW electrical generating facility

• October 16, 2006 – 3 page Staff report issued• October 17, 2006 – Planning Board Hearing

Zone Change – Round I (short version)

• October 24, 2006 – County Commissioners pass Resolution of Intent to rezone, 2-1

• November 29, 2006 – Commissioners pass final resolution to rezone

• December 22, 2006 – Plaintiffs file Complaint and Application for writ of mandate

• June 14, 2007 – Case settled adversely to County

Round I – Brief Conclusion

• Reason for Settlement:– County’s regulations did not comply with State law– Commissioners failed to conduct public hearing, per

MCA Section 76-2-205(1). Planning Board’s hearing not an adequate substitute

– Notice of Resolution of intent inadequate (205[6])– Because Environmental Impact Statement had been

completed, refused to consider public comment regarding environmental issues

Round I - Terms of Settlement

• Final Zoning Resolution repealed• $8,500 in Attorney fees• County paid significant attorney fees because

litigation not covered by MACO policy

Zone Change – Round II

• Commissioners execute rider on MACo policy to include defense of zoning actions

• Fall, 2007: Application submitted for zoning change

• Planning Board Hearing on December 4, 2007• Procedural protections:– Transcript– All comments welcome , subject to time limit

Zone change – Round II

• Role of Planning Board: Make recommendations to County Commissioners regarding boundaries and regulations

• Advisory Only, per MCA Sect. 76-2-204• Mandatory criteria for evaluating zoning

change:– Made in accordance with growth policy– The other 11 criteria (modified in 2009)

Zone Change – Planning Board

• Challenges related to Board members:– One member applauding opponents– One member unable to attend, wanted to

participate by phone– One member president of local bank where SME

had “depository relationship”

Board recommended zone change by 5-4 vote

Zone Change - Commissioners

• County Commissioner held public hearing on January 15, 2008: Ran from 3 pm – 2:30 am

• Commissioners tabled application to review huge volume of material submitted at hearing

• Approved Resolution of Intent to rezone by 2-1 vote on January 31, 2009

• Subject to 11 conditions

The 11 Conditions

• Offered on January 9, 2008• Primary condition: “SME agrees as a

condition of rezoning ... that such use shall be solely for … an electrical plant” (Coal/gas?)

• The other 10 conditions: Preconditions to issuance of a location/conformance permit– Included fire provisions, traffic mitigation, letter of

credit to pave road, control noise and glare

Round II

• Dispute over Protest period• MCA 76-2-205(6): “ … However, if 40% of the

freeholders within the district … of if freeholders representing 50% of the titled property ownership whose property is taxed for agricultural purposes … or forest land … have protested … the commissioners may not adopt the resolution

Round II – Protest Period

• Opponent argued that the “district” was the County

• Little v. Flathead County Commissioners: “only those within the proposed zoning area can contest the proposed action”

• County invited protests: Mistake!

Round II

• Final Resolution to Rezone passed on March 11, 2008

• Appeal to District Court filed April 10, 2009• Statute of limitations:– 30 days, per MCA 76-2-202, for challenges to

creation of zoning district or regs, …. Or …– 6 months, per 76-2-227, for appeals of decisions

by Boards, including Board of Adjustment

Parties to Action

• Who are Plaintiffs?– Surrounding landowners– MEIC– Plaintiff’s attorney – well funded by Libby cases – List of parties – almost two pages long

• Defendants– Cascade County– Intervenors (SME)

Complaint for Writ of Mandate/Review

– 42 pages long with assorted arguments– Boundaries not correct in public notice (always

proofread)– Materials were not “on file” for public inspection

at the Clerk/Recorder’s Office: (MCA 76-2-205): - The only issue on which evidence was

taken– Violated right to participate (!)

- SME didn’t offer 11 conditions until day of hearing

Further Arguments in Complaint

• Commissioners did not follow 11 criteria in MCA Section 76-2-203 (amended in 2009)

• Conditional zoning violates regulations• Illegal spot zoning: Test– Is new use different than prevailing use in area– Size of area/benefit to landowners– Special legislation designed to benefit one or a

few landowners

Further Arguments in Complaint

• Violates Growth policy (which is first of 11 criteria under statute)

• Key policy provisions: Maintain rural character; ag economy

• Violates National Historic Preservation Act – within viewshed of Lewis & Clark Portage National Historic Landmark

• Commissioners failed to consider public comment

Summary Judgment Motions

• Both parties sought expedited decision: SME needed to “commence construction” by November 30 to keep air permit

• SME Kicks off in Sept. with Motion for Summary Judgment based on mootness– Plaintiffs failed to seek stay (M. R. App. Pro. 22) to

cover costs, damages if decision affirmed– Property sold on Aug. 26, 2008

Case law on Mootnes

• Henesh v. Bd. of Commissioners (2007): Failed to challenge subdivision approval until after lots were sold: Held moot; failed to seek stay

• Povsha v. City of Billings (2007): Failed to appeal denial of injunctive relief and failed to seek stay of rezoning and subdivision: Moot!

• Mills v. Alta Vista (2008)

P’s Response to Mootness ArgumentFACTS

• SME and previous landowners were joint applicants, and they still are

• Rural Utility Service funding denied: Funding now uncertain and far from “done deal”

• Some of cooperatives backing out (Yellowstone Valley cooperative)

• Location/conformance permit not issued

Legal Response to Mootness Arg.

• Mootness proof burden is heavy• Rezoning was void ab initio: That appealable

issue will never be moot• SME is not an “innocent third party”, unlike

in Henesh, Povsha and Mills cases• REPLY: Swan Lakers v. Lake County BCC:

Supreme Court dissolved injunction without bond it previously imposed, due to huge damages to developer

P’s Motion for SJ on merits

• Expanded on Complaint (75 pages); filed 9/25• Cited Bryan v. Yellowstone School: Did not

have all of Applicant’s technical date prior to hearing; therefore no “reasonable opportunity” to participate

• Lengthy argument under 76-2-203: Regs must be designed to lessen street congestion, secure safety from fire, provide light and air, etc. (AMENDED to Board “shall consider…”)

County Response to P’s SJ Motion

• Standard of review: Abuse of discretion• Plaintiff’s arguments are hyper-technical; for

example, failure to include ‘Section 24, W1/2’ in public notice misled no one.

• Proposed zone change was ‘on file’ at Clerk’s office; not every document ever submitted

• Plaintiffs also presented numerous documents at hearing, without providing advance copies

County Response to P’s SJ Motion

• Conditional Zoning mitigates potential impacts and is legitimate exercise of Board’s authority]

• Conditional Zoning supported by Citizen Advocates for Livable Missoula and Boland cases

• Not spot zoning– Could have obtained special use permit for electrical

generation facility– NEPA analysis supported this location– Little criteria not violated

County’s Response

• The 12 Lowe criteria were thoroughly evaluated in 18-page staff report

• Board was not required to make findings of fact, just to reflect that they considered public input

SME’s SJ Motion on Merits

• The 11 conditions offered by SME addressed public concerns raised at planning board AND the Lowe (“must be designed to…”) criteria under MCA 76-2-203

• No genuine issue of material fact: Thus summary judgment is appropriate

• MCA 76-1-605(2)(b): Governing body may not deny land use change based on growth policy

SME’s SJ Motion on Merits

• Planning Board did not violate 76-2-204: Their written report was in staff’s Agenda Action Report

• Distinguish from Bryan: Rating criteria were intentionally not disclosed by School Board

• Record reflects that two Commissioners were aware of zoning criteria

• Writs don’t apply to discretionary acts

SME’s SJ Motion on Merits

• Spot zoning cases in Montana do not address rural environment

• Not spot zoning:– Nearby coal plant, hydro electric plants– not small area – 688 acres– Not special legislation, designed to benefit 50,000

consumers of SME electricity

Plaintiffs request ‘peremptory’ writs

• Dirt being moved on site; writ requested because no other “plain, speedy and adequate remedy available in ordinary course of law.” (MCA Section 27-27-102)

• Response:– Don’t need location conformance permit to move

dirt; permit request is under review– Mandamus is only for “clear legal duty” and writ

of review is for judicial functions

District Court Decision

• Granted summary judgment for Urquharts on mootness; denied it to SME

• Plaintiffs’ motion for SJ denied because facts in dispute

• Court has jurisdiction to review writ of review, to provide ‘plain, speedy, adequate remedy’

District Court Decision

• There was only one condition, the other 10 related to location/conformance permit

• ‘Conditions’ were response to public concerns• Proposal was “on file”, but not recorded• LCP is “hammer of enforcement” of conditions• Not spot zoning because HGS could be built in A-

2 area with special use permit• Reduced to “Order” not “Judgment,” and no

decision of SME motion for Summary Judgment

Petition for Writ of Supervisory Control – M.R. App. P. 14

• Plaintiffs argue “extraordinary circumstances,” and inadequacy of normal appeal process

• Failure to rule on SME motion: Mistake of law• SME’s response on behalf of Judge– Mistake of law must cause gross injustice– Appeal is adequate remedy; Plaintiffs simply don’t

want to post bond– Denial of Plaintiffs’ claims disposed of case– The sky is ‘not falling,’ as alleged

Decision on Supervisory Control

• Court in “anomalous position:” Judge won’t act to avoid complicated matters

• Supervisory control exercised to “limited degree”

• Directs District Court to resolve remaining claims and issue final judgment; Plaintiffs then free to seek stay

• Judge grants SJ to Defendants on 5/27/09

Board of Adjustment Appeal

• Two appeals: Earth moving allowed without LCP, and appeal of decision to issue permit

• Followed Rules of Procedure for Board of Adjustment: Arguments in favor of appeal, followed by arguments in opposition

• Board Decision: First appeal moot• Second appeal: Denied– Matters beyond Board’s authority (like air permit)– Standards must be met BEFORE OCCUPANCY

Appeal to Supreme Court

• District Court was wrong on spot zoning; special use permit allows “commercial wind farms/electrical generation facilities.” This is not either/or – has to meet both

• Special use permits for industrial uses must be in areas already zoned industrial (not ag)

• Conditional zoning did not have sunset provision and was not provided for by regs

• 11 conditions were not offered until hearing; no opportunity to rebut them

County’s/SME Response

• Many non-ag used allowed in A-2 areas with special permit

• Inherent authority of Commissioners to adopt conditions (Title 7 argument)

• Conditions in zone change were attempt to address 12 Lowe criteria and respond to public concerns

• Bryan case not applicable – Commissioners could not conceal something they didn’t have

Supreme Court Argument – 11/18

• During preparation, question of whether appeal is moot due to new zoning regs issued on 8/25/09

• Authority is Highland v. Flathead County, 345 Mont. 379 : Held that challenge to creation of zoning district in 2005 as contrary to County growth policy mooted by 2007 growth policy

• County files notice of supplemental authority on 11/10/09

Supreme Court’s Questions

• J. Morris: “What are you asking us to do?”• J. Nelson: Will the County pass new regs every

time it gets an appeal?• J. Leaphart: Is zoning for & around HGS the same

under new regs?• Others: How can citizens respond to plethora of

technical data? Does gas plant moot the case?• Decision: Supplemental briefing ordered to

address County’s “belated” argument

Collateral Issues

• Constitutional Questions: Stay would have required huge bond; denied access to court

• Amicus Appeals (Held: Not timely)• Release of all incoming/outgoing e-mail that

pertains to SME or Highwood Plant-Response:– MCA Section 2-6-401; preliminary drafts– Litigation strategy– Personnel– Burdensome!

Questions