Caseflicks

Montana Supreme Court • 2010

Plains Grains Ltd. Partnership v. Board of County Commissioners

2010 MT 155 | 238 P.3d 332 | 357 Mont. 61 | 2010 Mont. LEXIS 238

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Takeaway

In short, this case holds that a county cannot create an isolated heavy-industrial zone in a predominantly agricultural area for a single project and landowner when the Little factors show classic impermissible spot zoning; later, unrelated zoning amendments and an unstayed sale do not necessarily make that challenge moot.

Background

Landowners known as the Urquharts applied in 2007 to rezone 668 acres in northeast Cascade County from Agricultural (A-2) to Heavy Industrial (I-2). They and Southern Montana Electric Generation and Transmission Cooperative (SME) prepared the application jointly, and the Urquharts had already agreed to sell the land to SME. The purpose was to facilitate SME's proposed Highwood Generating Station, then planned as a coal-fired power plant. The surrounding area was predominantly agricultural, and roughly 200 acres of the parcel lay within the Lewis and Clark Great Falls Portage National Historic Landmark.

County planning staff concluded that the proposed industrial facility would be out of character with surrounding agricultural uses. Staff also observed that an electric-generation facility might be allowed in the existing agricultural zone through a special-use permit, so rezoning was not necessary for that purpose. SME nevertheless sought the I-2 designation, in part because it wanted to use tax-increment-financing mechanisms. The County Commission approved the rezoning in March 2008, incorporating conditions SME had proposed limiting heavy-industrial use of the parcel to an electrical power plant.

Plains Grains and numerous neighboring landowners sued, asserting unlawful conditional zoning, inadequate public participation, and impermissible spot zoning. SME and the Urquharts intervened. The District Court rejected mootness arguments based on the sale of the land to SME, but ultimately granted the County judgment on the merits. It held that the rezoning was not impermissible spot zoning because the power plant could allegedly have been permitted under the existing agricultural classification through a special-use permit.

While the appeal was pending, Cascade County adopted countywide amendments to its zoning regulations in 2009. The amendments left the disputed 668-acre parcel classified as Heavy Industrial and left surrounding land classified as Agricultural. SME also argued that Plains Grains' failure to obtain a stay, SME's purchase and development activity, and the new regulations made the case moot.

Issues

Issue #1

Whether Cascade County's 2009 countywide zoning amendments rendered Plains Grains' spot-zoning challenge moot.

Holding

No. The 2009 amendments did not repeal, supersede, or otherwise cure the challenged 2008 rezoning decision.

Reasoning

A case is moot only when the legal controversy has ceased to exist or the court can no longer grant effective relief. The 2009 amendments did not change the I-2 Heavy Industrial classification of SME's 668 acres or the Agricultural classification of the surrounding land. Thus, the alleged industrial "island" in an agricultural area remained exactly the land-use decision Plains Grains had challenged.

Country Highlands Homeowners Association did not control. In that case, a wholly new growth policy superseded the old policy on which the challengers' claim depended, and the court could not decide consistency with the new policy without a new challenge. Here, Plains Grains did not claim that the 2008 rezone conflicted with a repealed growth policy; it claimed that the rezone itself was unlawful spot zoning.

The 2009 revisions were refinements addressing matters such as zoning definitions, residential livestock rules, wind-turbine setbacks, and other district changes. They neither purported to repeal the 2008 rezone nor altered the relevant parcel or its surrounding agricultural context. A favorable ruling could still provide meaningful relief by returning the 668 acres to its prior Agricultural designation.

Plains Grains timely challenged the creation of the I-2 district in 2008. Its failure to separately challenge the 2009 amendments under the six-month limitations period in § 76-2-202(1)(b), MCA, did not defeat a pending challenge to a rezoning decision that those amendments left unchanged.

Issue #2

Whether Plains Grains' failure to seek a stay or injunction, the sale of the parcel to SME, and SME's claimed development expenditures rendered the appeal moot.

Holding

No. Neither the unstayed judgment nor the transfer and alleged development of the intact parcel prevented the Court from granting effective relief on the spot-zoning claim.

Reasoning

The Court's earlier supervisory-control order did not require Plains Grains to seek a stay or injunction. It instructed Plains Grains about the procedures available if it chose to seek such relief after final judgment. Because the order made no final determination requiring a stay, the law-of-the-case doctrine did not bar the appeal.

The sale from the Urquharts to SME did not change the legal identity or physical configuration of the property. SME acquired the same intact 668-acre parcel for which the rezoning had been sought, and SME had participated in the rezoning application from the outset. Invalidating the rezone would affect the parcel's zoning designation, not the validity of the sale itself.

Cases finding mootness after foreclosure sales or subdivision-lot sales were distinguishable. Those cases involved transfers to bona fide third parties or development that fundamentally altered the property, making restoration of the original status quo impracticable. Here, the relevant status quo was the zoning designation, rather than who owned the parcel.

SME's generalized assertion that it had spent millions preparing the site did not establish mootness on the appellate record. The record did not provide a quantified accounting of the claimed expenditures or establish that SME had final permits to build its later-proposed gas-fired facility. The Court therefore could not conclude that those asserted expenditures made restoration of the prior zoning designation impossible.

Issue #3

Whether rezoning the 668-acre parcel from Agricultural to Heavy Industrial was impermissible spot zoning.

Holding

Yes. The rezone satisfied the indicators of impermissible spot zoning under Little v. Board of County Commissioners.

Reasoning

The District Court erred by treating the possible availability of a special-use permit in the Agricultural zone as dispositive. A special-use permit is not a ministerial entitlement: the board of adjustment must consider required findings, including public welfare, effects on nearby property values, and harmony with the area, and it exercises discretion in deciding whether to grant the permit. SME instead chose the quasi-legislative rezoning route, which it described as a prerequisite to its project and tax-increment-financing plan.

Under the first Little factor, the requested heavy-industrial use differed significantly from prevailing uses in the area. The County's own planning materials recognized that surrounding lands were predominantly used for farming and ranching and that the proposed generating station would be out of character with those uses. Existing zoning may inform the inquiry, but it cannot replace consideration of prevailing land uses.

The second and third Little factors must be considered together: whether the rezoned area is relatively small and whether the action operates as special legislation for one or a few owners. Although 668 acres is substantial in isolation, it was a small portion of the county's agricultural land, much like the 323-acre parcel found problematic in Greater Yellowstone Coalition.

The rezoning benefited only the owners of the 668-acre parcel—initially the Urquharts and then SME—while providing no discernible benefit to neighboring agricultural landowners. The costs of a major generating facility, including transmission lines, rail spurs, and potentially eminent-domain impacts, would fall on surrounding farmers and ranchers. The rezone therefore created a heavy-industrial island in an agricultural area for the special benefit of a single landowner and constituted impermissible spot zoning.

Dissents

Justice Rice

Reasoning

Justice Rice would have dismissed the appeal as moot. He maintained that the Court's earlier supervisory-control order laid out the required process for seeking a stay or injunction pending appeal, and that Plains Grains' decision not even to request such relief allowed SME and the County to proceed under an unstayed judgment. In his view, the order was either law of the case or, at minimum, an accurate statement of the procedural obligations Plains Grains failed to follow.

Rice relied heavily on Turner, Henesh, Mills, and especially Povsha, which involved a spot-zoning challenge that became moot after the challenger failed to preserve the status quo and the development proceeded. He reasoned that the proper question was whether the Court could return the parties to their original positions, not whether SME's project had been fully completed. Because SME bought the property, secured additional permits, and spent substantial sums developing it, Rice concluded that meaningful restoration was no longer possible.

Rice also concluded that the 2009 countywide zoning changes independently mooted the claim under Country Highlands. In his view, Cascade County had comprehensively reexamined its zoning system, reduced the number of districts, and adopted a new countywide zoning map and regulatory framework. Since a spot-zoning inquiry depends on the zoning context surrounding the disputed parcel, he believed Plains Grains needed to bring a new challenge under the new ordinance and develop a record addressing that new context.

Finally, Rice argued that the majority unfairly discounted SME's claimed expenditures and undermined SME's right to act on a valid, unstayed judgment. He maintained that SME was entitled to proceed absent a stay, and that placing the consequences of Plains Grains' failure to seek one on SME conflicted with the law of judgments, appellate procedure, and due process. Justice Nelson joined the dissent in full; Justice Cotter joined its analysis through paragraph 101 and its conclusion that the appeal should be dismissed.