The week before Christmas 2020, I received word from the N.C. Supreme Court that it had denied discretionary review in a case out of Western North Carolina that my client had won in the N.C. Court of Appeals in 2018. We had prevailed at the trial court level in 2017 and before the county’s board of adjustment in 2016 after ten evenings of testimony that began in October of 2015. The appeal pertained to a planning director’s decision in June of 2015 to revoke a land use permit for an asphalt plant.

Before you race to the calculator, I’ll do the math for you. This was a five and a half year journey. Longer than usual, but not uncommon. One couple – later determined not to have had standing – was able to keep the appeal alive.

In 2010 through 2013, I represented a county in eastern North Carolina that rezoned land for a facility that would grow and process chickens, but more importantly that would create 1100 jobs during the worst downturn since the 1930s. The rezoning decision was challenged by a handful of neighbors but paid for by a city in the next county because, as one elected official said, they didn’t want to shoulder the “social costs” of the workers that would move into the area.

We won at every level and in several procedural skirmishes in between, starting in the trial court in 2011 and prevailing in the Court of Appeals in 2012. Then we waited until 2013 for the state Supreme Court to deny the neighbors’ petition for discretionary review.

Another client started its application in early 2015 for a conditional use permit for a large luxury hotel. But the city turned them down in early 2016. Although the players are different, the story line is the same. We prevailed in the trial court in 2017 and in the N.C. Court of Appeals in 2018. We argued the case in the N.C. Supreme Court in early 2020, and received a favorable opinion in April of 2020.

If you assume that high legal fees represent the “cost” of litigation, you’re wrong. Legal fees are an expense. The true costs of zoning litigation can affect entire communities, industries, a company’s existence, or a property owner’s ability to plan, move, or retire.

In the case just completed, the asphalt company waited five and a half years to learn whether its investment was completely lost. For five and a half years it was unable to finish grading its site and constructing its plant. It lost opportunities to use this plant’s location when bidding on projects. It lost opportunities to supply asphalt for highways being constructed in the region. And it had to make strategic long-term business decisions without knowing whether this critically-located site would be part of its regional operations.

In the second example, the chicken processing company gave up and found a shovel-ready site in Texas. In an uncommon display of character, the company CEO flew to North Carolina in his private jet to explain to county officials face-to-face that he could not do business while in litigation, and that the 1100 jobs and increased tax base would go elsewhere.

In the third example, the hotel developer took four and a half years to trudge from a city council hearing to the N.C. Supreme Court, only to prevail three weeks after a global pandemic pretty much shuttered the hotel industry.

Litigation, by its nature, is slow and tedious. Discovery provides lengthy times to produce documents and answers. Many rural counties have months-long intervals between civil court sessions. Appellate courts have crowded dockets, and many of the cases arrive in multiple boxes or their electronic equivalent that take inordinate time to review.

In the meantime – from a developer’s perspective – interest rates are fluctuating, material costs are rising, the political landscape is shifting, the various and fickle supplies and demands that comprise “the market” are changing, and property owners insist on regular payments to keep the offer to purchase active.

Businesses need degrees of certainty to manage cash flow, allocate capital, maintain payrolls, and plan for growth in order to dodge and weave through emerging competition and evolving consumer needs. When you’re in the land development business, litigation over one project can be far more than just litigation over one project.

A party is not helpless, and mediation can resolve litigation in most matters where one is dealing with money or its equivalent. But in zoning litigation, emotions run high. The motivational factors often arise from fears of change in an ever-changing world and emotional attachments to the character of certain areas. Monetary settlements are more difficult.

There are many ways to expedite litigation, beginning with the preparation and filing of pleadings and briefs and discovery in a vaguely described “now” rather than waiting until the 29th day of a 30-day period to act. The first time I did this with great intention (and the last time I ever promised a client a specific result) was 20 years ago when I promised a just-sued client that I’d have them out of court in a month.

I actually got the lawsuit onto the very next docket where it was dismissed within 3 weeks, not four. What I did not anticipate was a more than year long trek to the N.C. Court of Appeals. The trial court’s dismissal was upheld, the opinion (Nazziola v. Landcraft) has been oft-cited, and my then 11-year-old son got to watch my oral argument.

But I also learned something else with this case: be careful not to equate your client’s “win” with a “victory.”

If you found this helpful or of interest, please add your email below to receive future posts, and feel free to forward to others. You can search my older posts below, dating back to 2009.

I was intrigued to learn that Cleveland County, N.C. is considering a zoning ordinance amendment to make solar farms allowable only in light and heavy industrial districts.

It appears the ordinance amendment is being considered because solar farms – like practically all land use change proposals – bring out neighbors who do not want change.  And Cleveland County has had several large solar projects come through local approval.

But changing the Table of Permitted Uses to allow utility-scale solar only in industrial districts, as opposed to agricultural and rural residential districts, only means that solar developers will file applications to rezone large rural tracts to a light industrial zoning district.

I’m sure the proposed change arises from good intentions, but it misses the mark in several places.  For example:

  1. RA and AG districts are universally considered appropriate for a wide variety of industrial uses, including mines and quarries, lumber yards, airports, landfills, broadcast towers, and yes, farms. In many cases, what one might call a “real farm” cannot function without large trucks and loud, heavy equipment.
  2. Although a solar energy facility is technically “industrial,” it possesses none of the traits we associate with industrial uses. Specifically, a solar farm does not produce industrial traffic, industrial noise, industrial odors, industrial sized buildings, or use industrial lighting. In fact, solar farms produce no audible noise, no perceptible traffic, no lights, no odors, and no dust.  On average, these facilities generate fewer vehicle trips per month than a typical single family home generates per day.  With minimal landscaping, neighboring owners usually forget that they are there.
  3. The early phase of solar energy in the 2 to 5 megawatt projects is giving way to facilities that range from 20 megawatts to hundreds of megawatts. At a rule-of-thumb ten acres per megawatt that means the new, larger facilities will require several hundreds of acres. The only place such tracts can be assembled is in rural areas. If a county had several hundred acres of contiguous land zoned for industrial use, it would be wiser to market it for a megasite or industries that create more permanent jobs.
  4. Solar farms actually save large rural tracts from housing developments that bring traffic and noise into a rural community and enable the land to remain in the family. When the lease is up, the land can be returned to agricultural or timber use.
  5. In my experience, which is – wild guess – more than 125 solar farm approvals in 4 states, true farmers are among the last to complain that someone has found a profitable way to use their land. Those who complain loudest usually are people who are new to rural areas and now want to control how their neighbors use their land.

But Cleveland County has a good planning staff and excellent attorneys who assist. I wish them luck in making this decision.

If you found this helpful or of interest, please add your email below to receive future posts, and feel free to forward to others.  You can search my older posts below, dating back to 2009.

On May 4th the N.C. legislature passed Senate Bill 704 (Session Law 2020-3) to address a broad array of problems created by COVID-19.

Bill section 4.31(a) amended the Emergency Management Act to add new section 166A-19-24 to authorize local governments to conduct remote meetings during declarations of emergency.

Although the detailed procedural requirements create traps that could invalidate important decisions by an unwary board, the needed result for my clients is protection against lawsuits challenging virtual hearing zoning approvals in multiple jurisdictions.

Unfortunately, in its effort to hit the target, the General Assembly missed at least twice, and each errant shot might have winged some innocent bystanders.

First, Section 4.31(e) allows public hearings to occur remotely “provided the public body allows for written comments on the subject of the public hearing” up to 24 hours after the close of the hearing.

What?! Or maybe the better question is “WHY!?!”

Applicants and property owners (not to mention local governments) need to know when decisions are final. Does the 24-hour rule mean the local government must vote again if a comment has been received? When does annexation (and taxation) begin? From what date does a statute of limitation run? Do local rules on rebuttal arguments grant applicants yet another round of comments?

A citizen’s right to participate in a public decision should carry an equal obligation to participate within the timeframe provided. Whoever was assisting the legislature draft this provision should have realized there were too many negative consequences to the new and poorly defined 24-hour rule.

The second problematic provision is more subtle but worth noting. Section 4.31(f) allows quasi-judicial proceedings to be conducted remotely only if certain constitutional protections are in place. So far, so good.

However, subsection 4.31(f)(2) allows a quasi-judicial proceeding to occur only if all persons “who have standing to participate” have been given notice and consent to the remote meeting.

The problem is that, except for the property owner and the applicant, it is not known who has standing to participate until they appear at the hearing first and provide evidence to support their standing claim. Simply owning adjacent property does not create standing, a fact established by statute and case law.

Thus, a board would have to issue public notice and open the meeting first on a tentative basis to determine who among all participants and attendees has standing, and then post-pone the hearing if only one neighbor is found to have standing and objects – whether or not that neighbor ultimately intends to participate in the hearing.

I live my life in quasi-judicial hearings. Because I represent so many hard-to-permit industries, most applications have some degree of opposition. Rather than hand neighbors a weapon for defense, the legislature handed them a weapon for offense, a legislative ploy to hold an applicant at bay indefinitely while a declaration of emergency applies.

I’m hopeful that these provisions can be amended when the 2021 long session convenes.

Please feel free to forward to others who may be interested. Click on topics of interest to read past blog posts. To receive future posts, add you email to the “subscribe” list. And stay tuned for the next post on new recent cases handed down by the N.C. Court of Appeals and the N.C. Supreme Court.

AsheboroThis past Thursday I appeared before the Asheboro City Council in a quasi-judicial hearing for a conditional use permit. The city’s new template for safe hearings is worth other governments’ consideration.

No more than 10 people were allowed in chambers at one time. Only the mayor and four council members – enough for a quorum – were present, and they sat two seats apart. The remaining council members attended by phone. Before the meeting, staff and council members kept safe distances. No one shook hands.

Applicants and the public remained in the long hallway outside chambers in chairs placed more than 6 feet apart. Many wore masks.

When each case was called, only the speaker could approach the podium. The second person was required to stand at a marker 6 feet to the rear. Citizens outside the chamber were able to follow proceedings thanks to a large speaker in the hallway.

When our case was called, witnesses were sworn from across the room, and the mayor allowed me to question witnesses if I stood six feet from the podium. In other words, the awareness of public protection was as keen as the city’s knowledge that quasi-judicial proceedings require certain protocols to protect the rights of citizens and applicants.

Of greatest importance, the public’s right to participate and the applicant’s ability to present its case seem to have been protected. Hearing notifications informed the public of the structured format but did not discourage participation. (The previous case on the agenda was side-tracked into a continuance because of public opposition).

When I received notice that the hearing would be held in city hall as originally scheduled, I asked if my appraiser, a serious shelter-in-place person, could remain in her car and enter only if requested. The city’s attorney assured me that the city would allow all reasonable flexibility, including this request.

Upon reflection, a few things could have been done differently. Applicants and citizens should have been asked to wear masks. I forgot to take mine inside, and a well-placed sign would have reminded me. Hand sanitizer should have been available for the public. And official times of public hearings could have been staggered to allow for more hall space had we needed it (as it turned out, we did not).

This format would not work for a hotly contested hearing when large citizen groups want to attend, nor would it work in some of my complex hearings where counsel tables have to be brought into chambers. Asheboro also had good geography – a hearing room large enough to accommodate the essential attendees and a hallway large enough for the public to sit in chairs six feet apart. In other words, this format would not be possible in the Town of Calypso, where the council meets at a table in what is essentially the town hall lobby.

As a state, our learning curve is steep on virtual hearings and in-person hearings with structural health protections.

Earlier in the week, for example, I participated in a call-in public hearing with the Winston-Salem city council where the wrong number was initially given out, applicants could not adequately hear or understand what was being said, and mikes were unmuted. As soon as the clerk told me it was time to speak, she interrupted to inform me the decision had been made. But I passed along my observations, and knowing Winston-Salem, it will conscientiously make the needed improvements.

This is a new world. Learning to live in it will take time . . . and some stumblings through our early missteps.

            Please feel free to forward to others who may be interested. Click on topics of interest to read past blog posts. To receive future posts, add you email to the “subscribe” list. And stay tuned for the next post on new legislation on the conduct of virtual public hearings.

Kudos to the City of Greensboro for boldly keeping land use development projects moving through the approval pipeline despite local and State stay-at-home orders.

Last week, while sitting in my living room, I “appeared” before the Greensboro Zoning Commission on behalf of a developer of a 193-acre industrial project. The following night I “appeared” before the City Council for a multi-family project. Greensboro’s learning curve for virtual hearings (not to mention my own) is steep, but it will be that much further ahead of other jurisdictions when the next round of hearings begin.

Why is it important to proceed virtually and not wait? Because land contracts have deadlines and often require payment of hard cash for extensions. Project financing has usually been arranged at this point in the process. Construction contracts have been signed, and contractors need to know what projects are in their own pipeline. The list goes on.

Technical problems and meeting logistics were many. During the Zoning Commission hearing, my Wi-Fi access went out and I had to reboot to get it back. Fortunately, it occurred well before my time to present. There were problems with staff and commission members forgetting to mute and unmute their microphones and commission members’ dogs barking. My power point was partially covered by other things on the screen, and to speak you had to click a “raise hand” button.

At the City Council hearing, one client representative in her first Zoom meeting could not “get in” to the meeting. Some council members were seeking permission to speak and the mayor was not able to see the “raised hand” on her screen. Another attorney told me he had a 5 second delayed echo that made his job difficult. But we all made it through.

I’m confident that we’ll be better at this next month. And Zoom and its competitors will be listening to feedback from local and State governments and create new functions and capabilities to address current limitations. The UNC School of Government, I’m sure, will do seminars.

But some issues with virtual meetings cannot be addressed by IT teams and School of Government seminars. After my previous post about virtual hearings, reader Monroe Pannell commented that rural areas lacking adequate broadband will not be able to do what Charlotte and Greensboro and Raleigh can do. And Monroe is right. As far as I know, there’s no money in the stimulus package for rural broadband upgrades. Even if it were, needed upgrades are multi-year processes.

Add to limited broadband the fact that quasi-judicial proceedings aren’t simple public hearings.  They allow cross-examination and inspection of opposing parties’ documents and rulings on standing and admissibility of evidence. Can we do those by video conference?

As a veteran of these types of hearings, I’m leery. Yes, some of them have no controversy and could probably proceed. But when I represent the developers of landfills and rock quarries and asphalt plants, I’m more effective when I can see board members’ faces, watch the room to spot citizens in opposition, and stand at a podium to speak with full control over tone, volume, and pace for effective communication.

This leery stance, of course, is coming from the same guy who said with great confidence in the early days of e-commerce, “you might be able to buy a book from Amazon, but you have to physically drive the car and lie on the mattress and walk in the shoes before you buy them. E-commerce is limited!”

If nothing else, I think I’ve finally learned not to say “it’ll never happen.” If and when virtual meetings become more the norm, we all need to be like Greensboro and take extra precautions to make sure citizens in the virtual room are not being overlooked.

            Please feel free to forward to others who may be interested. Click on topics of interest to read past blog posts. To receive future posts, add you email to the “subscribe” list. And stay tuned for the next post on how the mechanics and limitations of virtual meetings.

In younger days I traveled through African game lands in Uganda and explored an Amazon tributary in Bolivia. Both times I was confronted with the ironic fact that it’s easier to protect yourself against the large, loud, dangerous things you can see than the small things you cannot.

If you’re going to be sidelined or hospitalized, chances are it will be from diseases carried by mosquitoes or the insidious bacteria in, well, everything you encounter. You’re personally vulnerable, and you know it.

As a child, I absorbed the opposite lesson about the invulnerability of American government. Nothing small could harm us, and the only possible threats to the great American experiment with open and participatory government were the menace of nuclear war and the bugaboo of never seen but oft-discussed Communists seeking to penetrate our governments in every conceivable way.

As an adult working actively in local governments across the state, I perceived governmental vulnerability differently – that the greatest threat to open and participatory government is the not uncommon effort by the very people we elect to conceal their actions and communications from the public when our laws require otherwise. The threat of make-believe Communists is more appealing.

But that was how I thought a full month ago in the way-back-then-times preceding the second week of March, 2020. Unlike Pearl Harbor and 9/11, there was no magic date when our lives changed. Rather, it was the cascading waves of newscasts and White House briefings and CDC reports that formed a tsunami of awareness that none of us is safe in public spaces, and many of us will die from a virus that we cannot see.

Stay-at-home orders have been issued and updated. Our awareness of this danger is more acute in April than it was in March. Restrictions have been tightened, not loosened, and it looks like the ban on public gatherings will be extended. Return to normalcy – whatver that means anymore – might carry a 2021 date.

Now more than ever, our governments must act, but our statutes only seem to recognize a governmental “meeting” as a chamber full of council members and the public in close quarters. Virtual meetings are experimental at best, and for the first time in our nation’s history, we’re confronted with a question never before asked: can we conduct open and participatory government through phone calls and video feeds?

It’s not a trivial question, especially for governmental decisions that, by statute, can be made only after the public has an opportunity to comment. Among the casualties of this virus are all of my clients seeking various land use permits and rezonings. Fox News and the Washington Post haven’t talked about them yet, but they’re victims nonetheless.

My hometown, High Point, has cancelled all public hearings in April and May. The city council will meet electronically and do a live stream on YouTube so the public and media are aware of what transpires. But if your development project cannot move forward without a public hearing, then your contracts and financing and timetables will have to adjust.

Such adjustment is commonplace now. Between early March and mid-May, I had 16 public hearings scheduled in 9 different jurisdictions. All were cancelled or postponed, although at least one is being resurrected. On April 20th I will represent the developer of a 193-acre industrial project at the Greensboro Zoning Commission from my living room through the new technology of something called “ZOOM.” Neither law school nor a low-tech lifestyle prepared me for this, but I’m rising to the challenge.

Last week I spoke to Robin Tatum, Raleigh’s City Attorney, who told me that Raleigh is conducting all “non-controversial” land use cases at the Board of Adjustment through virtual meetings.

But my clients develop asphalt plants, rock quarries, solar farms, landfills, and cell towers. Controversy is built into the process, and the pathway for these land uses is uncharted because they are quasi-judicial and the public’s right to participate through presentation of evidence and cross-examination is well-established.

Cheap comparisons of COVID-19 to WWII have been common, but one fact seems inescapable: life in America after the Age of Coronavirus will look vastly different than life before.

As to what that life will look life, I’m eagerly curious and cautiously hopeful. It’s possible that our governments will find ways to operate with greater openness and even more public participation once our statutes catch up and we figure out how to incorporate technology. If so, you heard it here first.

As a case in point, this past week I learned that our minister’s weekly sermon posted to Facebook had 3 times more views than the number of weekly attendees before services were temporarily cancelled. I was as pleased as I was surprised.

I close with this thought. Imagine a world where you can speak to the entire board of commissioners or city council in real time from a lounge chair on your back deck with a beer in one hand and your phone in the other.

That world might already be upon us.

            Please feel free to forward to others who may be interested. Click on topics of interest to read past blog posts. To receive future posts, add you email to the “subscribe” list. And stay tuned for the next post on how the mechanics and limitations of virtual meetings.

This month the Court of Appeals published an opinion (Appalachian Materials v. Watauga County) that provides clear step-by-step instructions for interpreting a zoning ordinance. Is this opinion, following on the heels of Henion v. Watauga County boring? Not at all.

It involves local political intrigue, a meddling “environmental” group, and friendly judicial jousting.   Plus, I’ll give you background information not found in the opinion.

Facts and Narrative

Appalachian Materials is the second case out of Watauga this year involving local attempts to prohibit asphalt plants. The facts are fairly simple. Appalachian Materials requested a High Impact Land Use (HILU) permit to construct an asphalt plant within 1500 feet of a school district office building. The county planning director, however, denied the permit, determining that the office building was an “educational facility” even though the HILU Ordinance defined an educational facility as “an elementary school, secondary school, community college, college or university.”

Why the s t r e t c h e d interpretation? Because Watauga County had become a hotbed of anti-asphalt plant activity and the political winds favored the loud voices of small groups when local ordinances became inconvenient.  Appalachian Materials was one of two asphalt plant cases that were occurring essentially at the same time.

What happened in the first asphalt plant case provides a clear context for the Appalachian Materials permit denial. Full disclosure: the first case (Henion v. Watauga County) was my case. The HILU permit holder in Henion was Maymead Materials, another company that manufactured asphalt.

In Henion, the planning director created his own permit standards in order to declare that Maymead Material’s HILU ordinance permit could be revoked. The plant wasn’t being built fast enough, he said, even though he could cite to no ordinance or provision or permit term that created a deadline. The Board of Adjustment and Superior Court said otherwise, and the Court of Appeals ultimately decided that the opponents lacked standing.

The planning director’s permit revocation followed a routine permit issuance to Maymead’s predecessor. The planning director even defended his decision when asked about it by newspapers, the public and his commissioners.

But circumstances changed quickly. As soon as Maymead erected a sign notifying the public that it was applying for an NCDEQ air quality permit, the community became agitated. The Watauga Democrat and High Country Press began writing articles. County commissioners emailed the planning director. Citizens wrote to complain. The county manager became involved. The Board went into (illegal) closed session to discuss ways to stop the plant’s construction. The Blue Ridge Environmental Defense League came in to form a local fundraising chapter to hire lawyers.

Within days, the planning director – who admitted he never visited the site to inspect it and never called Maymead to inquire – summarily revoked the permit for “lack of progress,” a fuzzy permit “requirement” that cannot be found in the ordinance. It’s all in a well-documented court record.

And it was in this milieu that the planning director attempted to deny Appalachian Materials’ HILU permit application.

What the Court Said

The Court reminds us that “clear and unambiguous” ordinances are applied as written and are not subjected to judicial construction. It refused to “effectively add new words” to create a different meaning convenient to the County’s new desires.

Four Take-away Points

(1)       Although the Blue Ridge Environmental Defense League d/b/a High Country Watch was granted standing to intervene, it owns no property in the area of the proposed plant, and it was formed only to fight two asphalt plants. Under N.C.G.S. §160A-393(d)(3) its intervention should have been challenged. BREDL is not what the average person calls an environmental organization. It is a professional NIMBY group that helps to organize local groups like High Country Watch to fight development projects.

(2)       The Court issued a simple and cautionary statement that will be oft-quoted in future cases: “Words matter.”

(3)       Judges Dillon and Davis, both excellent and respected judges, engaged in interesting and uncommon sword play over different ways to reach the same result.

(4)       Property owners and developers have a greater chance against a politically biased board on matters of ordinance interpretation than with fact weighing. The former is reviewed de novo (without board deference) while the latter is reviewed under the whole record standard (with board deference).



Last week the N.C. Court of Appeals published yet another opinion (PHG v. City of Asheville) that (1) further defines the template for deciding quasi-judicial zoning applications and (2) curtails the all-too-frequent seduction of board members to slip into legislative shoes while wearing a (quasi) judicial robe.

Full disclosure: I argued PHG to the Court in September, and I’m eager to provide the color commentary of what actually happened at the board level and how the case evolved. I am not without opinions. But while we’re inside the window when Asheville is deciding whether to petition the NC Supreme Court for discretionary review, I’ll be broad. For now.

First, credit where credit is due. PHG was very ably handled before the city council by my colleague Bob Oast of the McGuire Wood Bissette firm whose preparation made the difference. And I never go into litigation at the trial or appellate level without my colleague and collaborator Kip Nelson who finds case distinctions faster than any computer program yet written.

The Facts

PHG applied for a Conditional Use Permit (CUP) to construct a 7 story hotel in a developing part of the downtown business district. At least 5 reviewing boards and staff recommended approval. PHG put on 3 hours of evidence, primarily through 3 highly qualified experts from three well-known and respected companies.

Except for a man who approached to ask a question about traffic safety, there was zero evidence in opposition. Zero.

Council members themselves provided evidence and testimony during the hearing. They argued with PHG’s experts. Council member Bothwell was incensed that the traffic engineer was unaware whether smoke from the wildfires in Rutherford County has reached Asheville the day the traffic study was conducted. He did research on his iPad during the hearing. Another council member argued that the industry standard for traffic studies was not good enough for Asheville and insisted that the project should have been delayed to conduct traffic analyses in multiple seasons.

The public hearing closed. Council members immediately moved denial without discussion. Three weeks later, the council adopted 44 findings stating why PHG failed to meet its burden. And the findings were, in large part, nit-picky quibbles with PHG’s evidence.

Judge Tyson’s Opinion

The decision and the judge who authored it cannot be discussed separately. Judge John Tyson has now authored 5 opinions in two years that clarify the template for quasi-judicial decisions (Dellinger v. Lincoln County, Innovative 55 v. Robeson County, Ecoplexus v. Currituck County, Little River v. Lee County, and PHG).

These cases are all consistent. They create a modern canon that will be long referenced and cited. They protect the rights of parties against governments that wish to ignore their own ordinances and the rules of evidence. But most importantly, they are not from-the-bench legislation. Rather, they revive and confidently apply the principles of two seminal N.C. Supreme Court cases – Humble Oil and Woodhouse.

And it cannot be avoided or missed that Judge Tyson’s decision has a tone of rebuke. As I move into my 34th year of law practice and having appeared before boards in more than 250 towns, villages, counties, and cities in 3 states, I know the difference between a government that errs and a government that goes completely off the rails. It is rare when it occurs. But in this case it takes one reading of the transcript to recognize a council beholden to no one, no rules of procedure, and no recognized law.

The 7 Key Points

(1)       Yet again, Judge Tyson reminds us that if an applicant makes a prima facie case of entitlement he is entitled to the permit. To make a prima facie case requires not a burden of proof but a burden of production, after which the burden then shifts to the opposition.

(2)       Asheville argued that because it made findings that the standard of review should have been a highly deferential whole record review. Judge Tyson dismissed Asheville’s findings as “unnecessary” and “extraneous and superfluous” because there was no conflicting evidence before the council. The correct standard – which was applied by the trial court – was the non-deferential de novo review. Why? Because whether the applicant presented competent, material, and substantial evidence is a question of law.

If Asheville were to have prevailed on this point, every local government from now to eternity could make a Teflon coated decision escaping meaningful judicial review. Which is what, to my observation, Asheville was attempting.

(3)       The prominence of the Woodhouse case continues to rise. The Woodhouse court said, among other things, that it is an unacceptable and intolerable burden to require an applicant to anticipate and disprove every single objection to the project. Judge Tyson has recognized this point in most of the cases cited above.

(4)       Judge Tyson wrote at length on the definitions of “competent,” “material,” and “substantial,” to explain why Asheville erred as a matter of law when it declared each of these experts’ testimonies to be irrelevant and improper. I predict that PHG will be oft-cited on these points.

(5)       Council members’ personal or policy preferences are completely immaterial in a quasi-judicial case. Decisions must be based solely on the evidence presented. It is improper for council members (as here) to bring extraneous and incompetent evidence into the hearing. And the “unsubstantiated opinions of City Council members do not constitute competent evidence . . . [to rebuke an expert].” And citing Howard v. Kinston, the Court reminds us that a CUP cannot be denied based on reasons that are “merely an excuse to prohibit the requested use.”

(6)       There are two outlier zoning cases (SBA v. Asheville and Am. Towers v. Morrisville) where boards denied applications for special use permits. Both cases seem to grant local boards authority to raise the bar ever higher on an expert’s testimony as an excuse to deny a permit. PHG distinguishes both cases and reigns them in.

(7)       For future matters involving an appraiser conducting a market impact study, PHG is a must read.

Stay tuned. Pending the ultimate outcome of this decision I have more interesting tidbits from the hearing.

I published this post last January but my law partners – who won the case – asked me to take it down. Why? Because the other parties asked the N.C. Supreme Court to review the decision and one of the bases for higher review is a case’s significance.

And since I had described this decision as one of the most significant land use decisions in years because it opened the door to completely changing how appointed and elected bodies issue special and conditional use permits, my partners understandably cringed.

Two weeks ago the N.C. Supreme Court declined to hear this case, so I repost the original blog and especially ask you to read the section at the end explaining why the case merits game-changer attention.

The Parties

Little River is the owner of an existing Lee County rock quarry that needed to expand its quarry pit and facility boundary. Carolina Trace is the HOA of a subdivision about a mile from the quarry pit that elected to build near the existing quarry.  It was joined in the action by three other HOAs and several individual neighbors.

Although the hearing was before the Board of Adjustment, the county is the proper party on appeal.

The Facts

Lee County expressly permits rock quarries in RR and RA zoning districts if the quarry applicant can demonstrate by competent, material, and substantial evidence that it meets the standards of a Special Use Permit (SUP).

Lee County has the typical four SUP standards: (1) the use must not materially endanger health or safety; (2) the use must otherwise meet objective zoning ordinance requirements (3) the use must not substantially injure the value of adjoining property; and (4) the use must be generally consistent with the comprehensive plan and in harmony with the area.

As is becoming more common, the hearing occurred over many nights – in this case it took 5 nights over a six-month span. Lawyers represented all parties (including special counsel for the Board), and the lawyers generally agreed on the procedures the board would follow.

Little River had experts to demonstrate that it met most of the standards and used other forms of evidentiary presentations where experts were not needed. Interestingly, the HOAs were deep-pocketed and hired their own experts, something that is not common.

After 5 nights, the Board of Adjustment denied the SUP. Little River appealed to superior court.  The HOAs and others moved to intervene, and Little River consented, but with an express reservation of right to challenge the standing of the HOAs.

The superior court upheld the county’s denial, so Little River appealed to the Court of Appeals, which was a very good move.

The Court’s Decision

The Court of Appeals, through Judge John Tyson’s pen, reversed the superior court. As he did in his previously authored cases Dellinger v. Lincoln County and Innovative 55 v. Robeson County, Judge Tyson began his analysis with the prima facie case – did the applicant meet its initial burden of presenting competent, material, and substantial evidence tending to show that it met all SUP standards? If so, then it would have presented a prima facie case of entitlement to the permit.

He (and Judges Hunter and Stroud) concluded that the applicant did meet its burden, and that the HOAs failed to present competent, material and substantial evidence that it failed to meet any one of the standards.

As Judge Tyson reminds us (he mentions it twice), the applicant’s initial burden is a burden of persuasion. It is not a burden of proof.

And he cited one of his favorite cases (and mine), Woodhouse v. Bd. of Commissioners, on two key points, the first being that the applicant need not anticipate and address every conceivable objection to the proposed use.  Trust me that opponents will raise every “but what if” imaginable, and the Woodhouse standard is a helpful defense.

He also reminds us that “whole record review” is broader than looking for evidence to support the board’s decision. A reviewing court should look at all the evidence, including evidence contrary to the board’s decision.

But let’s look at how the court analyzed each standard.

Standing.  Little River challenged the HOAs’ and individual neighbors’ standing.  Except for some unique facts, it actually might have won on that point by demonstrating that the HOAs and others were not “aggrieved parties.”  After all, Judge Stroud, who authored the often-discussed Cherry v. Wiesner case, presided over this panel of judges. However, (1) the local ordinance provided for wide open participation before the board, and (2) Little River’s legal counsel consented to the HOAs’ intervention. The court dismissed the standing challenge on these bases, not on whether neighbors were aggrieved. (A noteworthy point: Little River consented to the HOAs’ intervention while expressly reserving the right to challenge standing in superior court. I would have appreciated more detailed reasoning from the Court).

Health and safety. I have argued for years that the SUP health and safety standard cannot be addressed by a local board on matters that are heavily regulated and pre-empted by state and federal law except to say that they are pre-empted.  The Little River Court does not use the term “pre-emption” but it essentially reaches the conclusion that the matters related to groundwater, surface water, air, blasting, etc. are all expressly regulated by state and federal agencies that have pre-emptied the field of lower governmental regulation.

I’ve been waiting for the right case to walk into my office for years – the case where the Court of Appeals says with finality that lay members of local government boards may not insert themselves in matters handled through state permitting by regulatory officials specifically trained to implement and oversee matters of environmental health and safety. This case opens the door a bit wider. (More on this point below)

Meeting Ordinance Standards.  First, I’ve said for years that this standard has no place in quasi-judicial decision-making.  It’s an objective, not subjective, standard.  It’s a determination that staff, not board members, are trained to make.

But more importantly, and without doing research, this is the first case I’m aware of where a court distinguishes between SUP requirements and the requirements later needed for a building permit or any other permit that is “an entirely separate process.” I battle boards on this issue more often than I’d like, and this court highlighted the distinction and clearly got it right.

Property values.  The court correctly followed the zoning ordinance standard – will the use substantially injure adjoining or abutting properties – noting that evidence of harm to homes in the HOA was immaterial because none of those homes adjoin or abut the quarry. (For those who follow these things, I note that this was at least the fourth time the Court of Appeals found the substance and methodology of appraiser Rich Kirkland to be sufficient to meet local ordinance standards).

Harmony. In its second application of the Woodhouse case, the Court found that generalized fears and speculations of lay witnesses could not overcome the legislative determination of harmony previously made by Lee County when it decided that quarries were allowed uses in RA and RR districts.  This legislative presumption of harmony is rebuttable, but the Court did not find that evidence in the record.

It is worth noting that in recent years our appellate courts have dismissed “similarity of use” and subjective appearance as working definitions of “harmony.” (See MCC Outdoor v. Franklinton, Blair Investments v. Roanoke, Innovative 55 v. Robeson County, etc.)

Other Commentary That You Won’t Read Anywhere Else

The lawyer who should be embarrassed. One of the outside counsel for the HOA or County drafted an order for the superior court judge that referred over and over to the Board of Adjustments (plural).  There is no such creature. The board of adjustments (plural) is a colloquial term used by lay people who haven’t read the statute or been to planning school. I wish Judge Tyson had said “(sic)” after each quoted misuse of the term from the lower court’s order.

And everybody has pet peeves. I also admit to minor cringing when the “board of adjustment,” the correct statutory term, is called the “zoning board of adjustment,” making the term “zoning” in this context the most useless and redundant term in land use law.

Lawyer-drafted rules. I’ve been in more multi-night hearings than I can remember, and in jurisdictions in every corner of the state.  It is always helpful and sometimes necessary for the lawyers to agree upon procedures to assist the local board that is likely experiencing its very first matter with lawyers on both sides and experts and court reporters.  That’s how it was done here, as mentioned by the Court.

Standing and intervention. This case did not analyze the application of Cherry v. Wiesner to participation at the board level other than to say it was inapplicable because the local ordinance provided an open door to participation before the board.  Having to deal regularly with citizens from across town or out-of-county who imagine that they have a dog in the local fight, I’m waiting for is a case that clarifies who can participate locally if the ordinance is silent on that point.  Some level of standing should be required.  Additionally, the court cited Little River’s consent to the HOAs’ intervention at the superior court level as a barrier to later challenge.  Since Little River consented to intervention while preserving the right to challenge standing, I will no longer consent to intervention if standing is a genuine issue.

The panel of judges.  This panel was a pro-development attorney’s appellate dream team, and whoever says that the panel you’re assigned to does not matter has not argued cases on the appellate level.  Judge Stroud, as I noted, wrote the court’s opinion in Cherry v. Wiesner, which raised the bar for judicial participation by neighbors who just don’t like the decision that was made.  Judges Tyson and Hunter have written some of the most important opinions in recent years protecting the rights of private property owners against aggressive, over-stepping, or arbitrary governmental decisions. For example, I could have told attorneys for the HOAs that they needed to be aware of Judge Tyson’s dissent in Dobo v. Wilmington, where he showed disdain for subdivision dwellers in once-rural areas who failed to inform themselves of the uses allowed on surrounding parcels, yet later complained when someone outside the subdivision wanted to expand the use of their property.

And why is this Opinion a Game-Changer for Land Use Cases?

It’s the pre-emption issue. To a great extent, this Court removes from local lay board members the assumed authority to make decisions that are otherwise delegated to state and federal agencies that hire experts who follow and implement the rules that are fully vetted for the protection of health and safety.

Health and safety are the topics on which clients I represent must spend from thousands to tens of thousands of dollars to address various matters at the local level. They are the topics boards often spend days discussing. As illustrated by this case and others, boards still listen to generalized fears raised by adjacent neighbors before they’ll listen to experts or trust state and federal agencies.

Whether it’s a rock quarry or a landfill or a shopping center requiring a 401/404 permit for disturbance of wetlands, Little River v. Lee County – to my reading – is a giant step in the direction of taking pre-empted decision-making out of the hands of local boards. Now all we need is a case where the nullification of pre-empted decision-making is the actual holding of the case.

Fair Disclosure

It is appropriate to note that Little River was represented by my firm, Smith Moore Leatherwood. Although I was present for oral arguments (I had the previous case on the docket) I had nothing to do with this case, which was ably handled by Gray Styers and Karen Kemerait in our Raleigh office, with assistance from our crackerjack appellate team.

“Standing” is suddenly a hot topic in zoning law, with three recent appellate opinions on the subject, one of which was a case of first impression decided by our Supreme Court.

SIDEBAR: My colleague Kip Nelson and I have our own standing case in the N.C. Court of Appeals awaiting decision.  Accordingly – and since the ethics of blog writing are undefined in these contexts – I’ll only make general comments on standing and add a couple of innocuous points on these cases. The case summaries have been prepared by Olivia Fajen in my firm without edits from me as to substance.  The case descriptions and interpretations are hers alone.  END SIDEBAR.

What Is Standing?

As a general rule, “standing” refers to a citizen’s right to avail him or herself of remedies offered by our judiciary.  Only someone who has been harmed may appeal to our courts, and the harm must be one that can be addressed by judicial remedy.

Without standing, a court does not have subject matter jurisdiction over a case.  Thus, the nature and existence of standing may be raised at any time.

The Zoning Case Conundrum

In land use and zoning cases, our courts keep struggling to define who can challenge a local government’s decision affecting land use.

To quote Bugs Bunny, we “took a wrong turn at Albuquerque” with Jackson v. Board of Adjustment, a 1969 N.C. Supreme Court case where neighbors challenged approval of a mobile home park.  The Court held that a reduction in one’s property value resulting from an illegal use is sufficient to grant standing.  But then we went into the wilderness for close to 40 years with several subsequent cases proclaiming that Jackson stood for the proposition that you must have a loss in property value to have standing.

In 2008, the Mangum v. Board of Adjustment case broadened the inquiry to include injury resulting from more than a loss of property value—in  that case traffic, water drainage, and safety.

In 2015, the Court of Appeals raised the bar on standing in Cherry v. Weisner, concluding that a neighbor lacked standing to challenge the construction of a modernist style home in an historic neighborhood in Raleigh.

So what is happening this year to make standing such a hot topic? I don’t know, but let’s look at what our courts have said.

The Cherry Community Case

In February, the  Court of Appeals published Cherry Community Org. v. City of Charlotte, No. 2015-CVS-20180 (N.C. App. Feb. 6, 2018).  In Cherry Community a developer petitioned to rezone land in the Cherry Community.  After first denying the rezoning because the building’s height violated area plans, the developer orally agreed to lower its building height and the city council approved the rezoning at its next hearing.

The community organization petitioned for judicial review, challenging the validity of an oral amendment in the rezoning process.  The trial court held that CCO lacked standing on summary judgment, and community organization appealed.

The court reiterated that in zoning ordinance actions, a party (1) must suffer damages that are distinct from the rest of the community, and (2) those damages must be sufficiently plead.

Here, the court determined that CCO’s mere pleading of special damages was insufficient.  There must be actual proof of special damages.

CCO failed to show that it would lose any tenants because of the rezoning or that the loss of view due to the height of the proposed building was associated with any diminution in value to its property.  It presented no evidence of increased noise, traffic, or parking.  Thus, its evidence of special damages was nothing more than conclusive, unsupported allegations.

Judge Hunter wrote a separate concurring opinion, arguing that standing is broad and includes anyone who has suffered harm.  To him, the fact that the organization owns property adjoining the property at issue and can potentially be adversely affected by the rezoning was sufficient to have standing.  But, Judge Hunter concurred in the result because CCO presented insufficient evidence of special damages to survive summary judgment.

Byron v. Synco Properties

In March, the Court of Appeals again stressed the importance of the necessity for a specific injury to satisfy standing requirements in Bryon v. Synco Properties, No. COA17-318 (N.C. App. Mar. 20, 2018).  In Bryon, the plaintiffs challenged the constitutionality of amendments to the Protest Petition Statute, which replaced the traditional protest petition process with a “Citizen Comment” procedure.  See N.C. Gen. Stat. § 160A-385 and S.L 2015-160.  However, (1) the plaintiffs never actually petitioned the city protesting the rezoning; (2)their property was not subject to the rezoning; and (3)their property was not within 100 feet of the area subject to the rezoning.

The court distinguished the three different standards for standing involved in this case: (1) zoning ordinance challenges; (2) statutory construction and validity claims; and (3) constitutional challenges to zoning ordinances.  First, a rezoning ordinance may be challenged “only by a person who has a specific personal and legal interest in the subject matter affected by the zoning ordinance and who is directly and adversely affected thereby.”  Second, standing to challenge a statute requires that the statute directly and adversely affect the plaintiff.  Third, standing to challenge the constitutionality of a zoning ordinance or statute requires that the plaintiff demonstrate injury or immediate danger of injury to a constitutionally protected interest in the property.

The Byron court held that the plaintiffs lacked standing because they did not have an injury – the property rezoned was not their property, and they did not have an interest in the rezoning of an adjoining landowner’s property.

These two cases show that there must be actual proof of a specific injury to a citizen’s property caused by the governmental decision.  That is quite a high bar to meet.

Willomere v. City of Charlotte

Finally, in Willowmere Community Ass’n v. City of Charlotte, 809 S.E.2d 558 (N.C. Mar. 2, 2018), homeowners’ associations for adjacent subdivisions brought an action to challenge a Charlotte rezoning decision.  In a case of first impression, the Supreme Court held that the homeowners’ associations did have standing to bring the action.

The city did not argue that the homeowners’ associations lacked a sufficient personal interest the case.  Instead, the city asserted that the court had no subject matter jurisdiction because the homeowners’ associations acted without authority on behalf of its members because it did not follow its own internal grievance procedure required by its corporate bylaws.

The Court rejected the concept that the defendant, a stranger to the plaintiff association, may assert that the plaintiff’s failure to follow its own internal guidelines necessitates dismissal of the plaintiff’s complaint for lack of standing.  Instead, only a member of the association may assert that argument.

Further, the Court stated that “[n]othing in our jurisprudence on standing requires a corporate litigant to affirmatively plead or prove its compliance with corporate bylaws and internal rules relating to its decision to bring suit.”  Thus, the Court reversed and remanded the case back to the trial court, holding that the plaintiffs possessed a sufficient interest in the case.