Update: On November 7, 2013, the Supreme Court handed down a merit decision in this case. Read the analysis here.
On March 12, 2013, the Supreme Court heard oral argument in the case of Willis Boice v. Village of Ottawa Hills, 2012-0413. The case was accepted on regulatory takings issues, but you couldn’t much tell that from oral argument.
This case involves two parcels of land in Ottawa Hills (Parcel 1 and Parcel 2.) As originally platted in 1926, both parcels were buildable lots. In 1941, a house was built that straddled the lot lines.
The year before the Boices bought the two parcels in 1974, the previous owner was granted a lot split so that the house sat wholly on Parcel 1. As a result of this reconfiguration, Parcel 2 was reduced in size to 33,000 square feet. At that time, the minimum square footage requirement for building a house on a parcel under the existing zoning law was 15,000 square feet.
In 1978, the Ottawa Hills Village Council passed an ordinance providing that the minimum square footage required to build a single family residence in that zoning district was 35,000 square feet. That change meant that Parcel 2, which had been large enough for a house in 1974, no longer was. In 2002, the council adopted a new zoning map that placed the two parcels in a different zoning district, but the square footage requirement remained 35,000 feet.
In 2004, the Boices decided to downsize and sell both lots. They sought confirmation from the Village Manager that Parcel 2 could be sold as a buildable lot. When their request was denied, the Boices filed an administrative appeal to the Zoning Commission, seeking either a variance or a reconfiguration of the lot split to add enough additional footage to Parcel 2 to make it buildable under the new zoning rules. Both were turned down.
The Lucas County Court of Common Pleas affirmed the Zoning Commission’s decision on administrative appeal. In Round I, the Sixth District Court of Appeals reversed, finding that the trial court had applied the wrong standard in evaluating the regulatory takings claim. The case was remanded to the trial court for a determination of whether a regulatory taking had occurred, within the framework of the U.S. Supreme Court decisions in Penn Central Trans. v. New York City 438 U.S. 104 (1978) and Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005). On remand, the trial court concluded that no taking had occurred because the plaintiffs had not established that the zoning change interfered with their distinct investment-backed expectations and did not establish that Parcel 2 was otherwise buildable.
At Oral Argument
The Boices argued that the Court was being asked to protect an individual’s property rights against enforcement of a government regulation that amounts to a taking. When the Boices originally bought the two lots, they did so because they thought Parcel 2 was a buildable lot. The owners of all the other lots in the area with less than 35,000 square feet were allowed to build on their lots even though those lots were less than the 1978 35,000 square foot zoning requirement. The Boices are being unfairly singled out because of the lot reconfiguration by the prior owners. The Supreme Court should reverse the Court of Appeals and find either that the denial of the variance was improper, that Parcel 2 should have been grandfathered, or find that this was a total regulatory taking and order the Village to buy the property in an appropriation proceeding.
When property owners are deprived of some, but not all, of the economically viable uses of their property, to prove a regulatory taking they must meet the Penn Central requirements, which the Boices clearly did not. The Boices have repeatedly changed their proposed remedy in this case, with regulatory taking being the most recent. Of the other properties platted in 1926, none had any lot split like the Boice property had, thus the zone change did not affect these other properties. None of them would have needed a variance to build on their lots. The Boices did not seek a variance for their property in 1978, nor did they oppose the new zoning legislation. Although they are not required to do that, it would have been some evidence of what they saw as interference with their investment-backed expectations, and that they were doing something to protect those expectations. The Boices cannot raise compensation via a mandamus action for the first time before the Supreme Court, and they clearly did not prove beyond fair debate that the denial of a variance in this case constitutes a taking under the Penn Central regime.
What Was on their Minds
Grandfathering, Variance, Reconfiguration
Why wasn’t this property grandfathered, asked Justice O’Neill. He later commented that he had read the appellate decision several times and could not figure out what happened to the grandfathering issue (it got lost, said Boices’ counsel; it was never raised said the Village’s counsel.)
Chief Justice O’Connor asked how the other 1926 platted lots of less than 35,000 square feet came to have houses built on them? And the Boice property is now just 2000 square feet short? Why did the neighbors oppose a variance for the Boices? (answer—they wanted a green space for the benefit of the community.)
How were other properties treated after 1978 asked Justice Lanzinger?
Since the Village increased the minimum lot size, has anyone that owned an open lot been denied the chance to build a suitable home, asked Justice Pfeifer? (neither counsel could recall anyone else.)
The Boices never tried to build on this parcel, commented Justice Lanzinger. (answer-correct)
Weren’t the Boices paying property taxes on this parcel as if it were a building lot, asked Justice O’Neill? Hasn’t the Village invited this dilemma by granting the lot reconfiguration?
What can this parcel now be used for asked Chief Justice O’Connor?
Platted or Non-Platted?
In 1978 did Parcel Two go from a platted to a non-platted lot, asked Justice O’Neill? (answer from Village counsel—it became a lot that no longer complied with the zoning ordinance.)
What is the significance or relevance of the term “platted” asked Chief Justice O’Connor?Aren’t Parcels 1 and 2 both still platted lots? In 1978 the zoning requirements changed for a buildable lot, but both are still platted lots, right?
The Magic of an Unchanged 1926 Plat
What about variances granted post 1978 to other lots with less than 35, 000 square feet, asked Chief Justice O’Connor? Surely not all of those 1926 platted lots are still in their 1926 dimensions? Going forward from 1978, has there been any lot sold or built upon that is under 35,000 square feet in this area? Those didn’t need variances? What is the significance of that 1926 date?
Standard of Review
What is it for denial of a variance, asked Chief Justice O’Connor? (answer from Village counsel—did they prove beyond fair debate that the denial of a variance constitutes a taking under Penn Central).
Were the Boices seeking a condemnation proceeding, asked Justice O’Donnell, noting that the Boices’ proposition of law argued this was a regulatory taking. (plaintiffs’ counsel gave several different answers to this question.)
Justice Lanzinger asked if the Boices were alleging a total taking? That the lot had no value? (answer-yes.)
How it Looks from the Bleachers
To Professor Bettman
What was particularly striking about this argument was that despite the fact that the case was accepted for review as a regulatory taking case, plaintiffs’ counsel did not discuss or analyze what was required by Penn Central, or how this case fit into the Penn Central framework. But even if the Village is correct in its assertion that the denial of a variance or lot reconfiguration is not a regulatory taking—and it doesn’t seem that the Boices proved either a partial or a total regulatory taking– the justices clearly appeared to feel that the Boices had gotten hosed. A majority, led by the Chief, who is very big on individual property owner rights (see, eg. Norwood v. Horney), and followed closely by Justice O’Neill, seemed to feel the Boice property either should have been grandfathered or granted a variance. Where this leaves things, given the proposed propositions of law is not clear —Justice O’Donnell especially pressed on this point. Boices’ lawyer gave several different and at times inconsistent answers to this question, but his final words to the Court were, just say the variance should have been granted and the case can be over. Village counsel really stood her ground very professionally, in the light of considerable push-back. The Village brief does a thorough regulatory takings analysis.
To Student Contributor Greg Kendall
The argument was very fact-specific and the facts questions were all over the place. The fact that the plaintiffs never attempted to build on the property while they owned it will hurt them. Justice O’Neill came out very strong in believing that the property was grandfathered into subsequent zoning ordinances. A lot of the questioning made it sound like the Court was stepping into the role of the Zoning Commission and was deciding whether a variance should have been granted.