DA 11 - 0721 IN THE SUPREME COURT OF THE STATE OF MONTANA 2012 MT 236 JOHN RICHARDS, Plaintiff and Appellant, v. COUNTY OF MISSOULA, a political subdivision of the State of Montana, Defendant an d Appellee. APPEAL FROM: District Court of the Fourth Judicial District,

In and For the County of Missoula, Cause No. D V11 - 474 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD:

For Appellant: Richard A. Reep ; Reep, Bell & Laird, P.C., Missoula, Montana For Appellee: Fred Van Valkenburg, Missoula County Attorney; D. James McCubbin , Deputy County Attorney, Missoula , Montana Submitted on Briefs: June 6, 2012

Decided: October 23, 2012

Filed:

___________________________________ _______ Clerk October 23 20122

Justice Brian Morris delivered the Opinion of the Court. ¶1 John Richards (Richards) appeal san order of the Fourth J udicial District Court, MissoulaCounty, that granted summary judgment to the County of Missoula (County) . We affirm. ¶2 Richar dsraise sthe following issue s : ¶3 Whether the District Court abuse d i ts discretion by not allowing Richards to conduct further discovery before ruling on the summary judgment motion? ¶4 Whetherthe District Court properly granted summary judgment to the Countyo n the Board of County Commissioners ’ decision to deny the subdivision? ¶5 Whether the Countyw as entitled to summary judgment on Richards’s regulatory taking claim? ¶6 Richards purchased property near Clearwater Junction in 2005. He intended to develop this 200 - acre property into a rural subdivision . Richards submitted an application for a 119 - lot subdivision to the County in 2006. The Board of Missoula County Commissioners (Board) denied the application. ¶7 Richard s modified the proposal to a 59 - lot subdivi sion that the Board considered in 2007. Montana Fish, Wildlife, and Parks (FWP) provided comments during the subdivision rev iew in which it recommended that the Board approve a density of no more than 20 residential lots due to concerns about wildlife hab it at . The Boardd enied Richards’s application for the 5 9 - lot subdivision based , in part, upon th e adverse effects on wildlife . The district court denied Richard s ’s petition for judicial review. We affirmed . Richards v. C o . of Missoula , 2009 MT 453 , 354 Mont. 334, 223 P.3d 878 ( Richards I

) .3

¶8 Richards worked with FWP to mitigate adverse effects on wildlife in another effort to develop the property . Richards proposed , among other things, to place a fence around the entire subdivision to prevent interactionbetween residents and wildlife. FWP suggested to Richard sthat itha

d no objection to his deve lopment in light of his proposedm itigation . Richards eventually submitted an application in 20 10 to the County for another 59 - lot subdivision. He argued thatt he County should approve the p roposed subdivision in light of FWP’s apparent agreement with his proposed mitigation. ¶9 FWP eventually switched its position, though, on December 2, 2010

— after Richards had submitted his application and approximately one mo nth before the Boardconsidered that application. FWP encountered new research reg arding black bears, grizzly bears, and human - bear conflicts in the proposed subdivisionarea . This research apparently supported FWP’s previous recommendation that the Boar dd eny the subdivision, and FWP advised the Board that its 2006 and 2007 commentsand opposition still appliedto Richard s ’s 2010 application. ¶10 The Boardconsidered Richards ’sapplication at a publi c meeting on January 12, 2011 . The Boardv

oted unanimously

t o reject the proposed subdivision . The Boardi ssued extensive findings of fact and conclusions of law to support this decision . The Boardd enied the application due to its lack of compliance with state law, lack of c om pliance with Missoula County Growth Plan, and lack of compliance with Missoula County Subdivision Reg ulations . The Boardalso noted the potential adverse impact to the wildlife habitat. ¶11 Richards filed a petition for judicial review of the Board ’s decision . Richards alternatively claime d that the Board ’s actions constituted a regulatory taking that entitled him4

to just compensation . The County mo ved for summary judgment . Richards responded to the merits of the County’s motion . Richards also sought to depose various officials from FWP to determine the basis for itsoppositio n to the proposed subdivision . The District Court denied this request due to Richards’s failure to justify how these depositions would affect the summary judgment proceedings. The District Court alsogranted summar y judgment to the County on all of Richards’s claims . Finally, the District Courtgranted summary judgment to the County with respect to Richards’s takings claim . Richards appeals. **STANDARD OF REVIEW** ¶12 We review for an abuse of discretion a district court ’s decision regarding anM. R. Civ. P. 56(f) request to conduct further discovery. Richards I , ¶ 3 3 . We review for correctness a district court’s decision to grant summary judgment . Dubiel v. Mont. Dept. of Transp . , 2012 MT 35, ¶ 10, 364 Mont. 175, 272 P.3d 66 . **DISCUSSION** ¶13 Whether the District Court abuse d i ts discretion by not allowing Richards to conduct further discovery before ruling on the summary judgment motion? ¶14 The Montana Rules of Civil Procedure allow a party to respond to a summary judgment motion by requesting more time to conduct discovery . M. R. Civ. P. 56(f) . A party making the request must provide the court with an affidavitthat includes“specified reasons” why the party cannot present facts essential to justify its opposition. M. R. Civ. P. 56(f) . The party

muststate in the affidavit the f actsthat it seeksto discover, the reason why that party has been unable to obtain those facts, and why those facts are material to its summary judgment opposition . See M. R. Civ. P. 56(f); Richa rds I , ¶ 33.5

¶15 Richards’s affidavit provides no appearance, on its face, that it is an affidavit in support of hisM. R. Civ. P. 56(f) motion . The five - page affidavit instead mainly contains statement so f alleg

ed disputed facts which he used to oppose sum mary judgment . Richards’s affidavitincludes only one sentence that states what further discovery he would like to conduct . He fails to explain how this further discovery wouldhav e been used to defeat summary judgment . Richards I , ¶ 33 . Richards has f

ailed, once again, to comply with M. R. Civ. P. 56(f) . Richards I

, ¶ 34 . The District Court accordingly did not abuse its discretion by denying Richards’s request to conduct further discovery . See Richards I, ¶ 35. ¶16 Whetherthe District Court properly g ranted summary judgment to the County on Board of County Commissioners ’ decision to deny the subdivision? ¶17 We limit our j udicial review of ag ov erning body ’s decision to grant or deny a subdivision to whether the governing body acted in an arbitrary and cap ricious fashion, or to whether the body ’s decision is unlawful. Ci tizens forR esponsible Dev. v. Bd. of C o . Comm rs . , 2009 MT 182, ¶ 8, 351 Mont. 40, 2 08 P.3d 876 . We do not consider whether the go verning body ’s decisioniscorrect . Keily Constr. LLC v. Ci ty of Red Lodge , 2002 MT 241 , ¶ 69, 312 Mont. 52, 57 P.3d 836. ¶18 We instead rev

iew whether the County carefully considered and addressed the information before it, and whether the County acted largely in conformance with that information . See Richards I , ¶ 22 . The body ’s decision accordingly must be random, unreasonable, or seemingly unmotivated in order for this Court to reverse the go verning body ’s decision as arbitrary and capricious . Ki ely , ¶ 69 . We limitthis rev iew to consideration of the record before the go verning body when it issued its decision . Richards6

I , ¶ 24. ¶19 Richardsargues that the County’s denial of his application constituted an arbitrary and capricious decision . Richards notes that h e worked extensively with FWP . FWP expressed a willingness to withdraw its opposition based on these meeting s . FWP ultimately rev ersed course one month before the subdivision review . F WP o pposed Richards’s subdivision based on newly acquired scientific research regarding wildlife in the prop osed subdivision area. Richards challenges this research and the veracity of FWP’s report. He contend stha

t a factual dispute exists regarding the vera city of FWP’s report . Richards arg ues, in effect, that he can establish the arbitrary and capricious nature of th e County’s deci sion by undermining FWP’s report . ¶20 Richards relies on the false pr emise that he can attack FWP’s report on judicial review with information notcontained in the administrative record . This Court long has stated that it will consider

only the record before the governing body in reviewing whether the body’s decision is arbitrary and capricious. Richards I , ¶ 24 . Correspondingly, we have determined that the governing body

— not the courts

— should assess the credibility of information and arbitrate disputes over conflicting information. Richards I , ¶ 22. ¶21 Richardsargues that this Court’s decision in Aspen Trails Ranch, LLC v. Simmons , 2010 MT 79, ¶ 53, 356 Mont. 41, 230 P.3d 808 , stand s for the propositionthat a party who challenges ag

ov ernin g body’s decision on a subdivision application should be able to rely upon “extraneous evidence” not contained in the administrative record. More specifically, Richards contends that he should be allowed to undertake discovery to determine whether7

the “ne w science” upon which FWP alleged ly relied canb e attacked as “faulty, inadequate or unscientific.” ¶22 Neighboring landowners in Aspen Trails challenge dthe adequacy of the environmental assessment (EA) prepared as part of the subdivision review process . Th e neighbors arg

ued that § 76 - 3 - 603, MCA, required additional information reg arding the condition of the subject property to have been included in the EA . Aspen Trails , ¶¶ 55 - 56. We determined thatt he district courth ad not abused its discretion inallowing the neighbors to present expert testimony regarding the condition of the subject property that had not been included in the EA . Aspen Trails , ¶ 53. ¶23 The County characterizes Aspen Trails asan extremely limited exception to the general rule that a cou rt must limit its review to consideration of the record before the go verning body when it issue s its decision . Richards I , ¶ 24 . The County distinguishes Aspen Trails on the basis that the district court allowed the testimony “ to determine the adequacy o f the record for a subdivision review. ” By contrast, the County characterizes Richards ’sefforts as an attempt to “re - ev aluate” the recordfor a subdivision review . We ag ree. ¶24 We rejected in MM&I, LLC v. Bd. of C o . Commrs. of Gallatin Co . , 2010 MT 274, ¶ 26, 358 Mont. 420, 246 P.3d 1020, a similar effort to “re - ev

aluate” the decision of the board of county commissioners on a proposed subdivision . The plaintiffs in MM&I sought to introduce on judicial review deposition testimony reg arding the individual c o mmissioners ’ thought processes abouta ctions taken more than five years earlier . MM&I , ¶ 23 . The plaintiffs sought to demonstrate that the commissioners had abused their discretion by8

ignoring facts and evidence in the record and instead had based their decision on their own personal opinions and beliefs . MM&I , ¶ 23 . At least one of the c ommissioners repeatedly stated that she did not recall the specifics of the matter . MM&I , ¶ 26 . W e determined that the district court had not abused its discretion inexcluding the deposition testimony. MM&I , ¶ 27. ¶25 Richards dispute sthe accuracy of the comments that FWP submitted regarding the proposed subdivision that formed the basis for the FWP report . The Board serves asth e sole arbite r of disputed facts . Richa rds I , ¶ 22 . A party possesses no rig

ht to an evidentiary hearing when he challenges a go verning body’s decision that it reached after consideration of competing evidence during a subdivision review. Richards I , ¶ 22 . Richards cites nothing in the recor d to suggest that we should re - evaluate the Board’s reliance on the FWP report. Richards accordingly lacks any basis to attack collaterally the FWP report on judicial review. ¶26 Moreover, Richards makes no attack whatsoever against the Board’s other reasons for denying his proposed subdivision . The Board providednumerous reasons for denying the application and citedextensive findings of fact to support each reason . For example, the subdivision violatedthe County’s growth policy . The subdivisionwould have deleterious impacts on agricultural water user facilities . The subdivision failed to comply with state irrigation l aws . The subdivision failed to comply with the County’s Primary Travel Corridor requirement . The subdivision would have extensive impac ts upon the environment, wildlife, and wildlife habitat pertaining to Blanchard Creek . The demand from the subdivision would exceedthe carrying capacity of the wells and septic systems . Richards cites nothing in the record to demonstrate that any of the Board ’s conclusions were random or unreasonable .9

Ki ely , ¶ 69 . ¶27 Richards next challenges the lawfulness of the Board’s decision . He first contends that the County had to provide proper defere nce to his mitigation proposal as required under § 76 - 3 - 608( 5)(b), MCA . Richard sh ad proposed placing afence around the subdivision . He arg ued that this fence would mitigate sufficiently F WP’s concern about wildlife - human interactions . He contends that the County acted unlawfully in failing to accord any defere nce to this mitigation . ¶28 A go verning body

must offer this deference only when itrequires mitigation . MM&I, LLC, ¶ 46 . This mitigation normally arises in the context of a decisionc onditionally to approve a proposed subdivision . See MM&I, LLC, ¶ 46 . The governing body possesses no obligation to defer

w hen it determines that its concerns cannot be mitigateda dequately . MM&I, LLC, ¶ 46 . The Board d eniedoutright Richards’s application due to its determination that its concerns coul d not be mitigateda d equately . Thus, the Board possessed no duty to defer to Richards’s proposed mitigation. ¶29 Moreover, Richards ’sp lanned mitigation addressed only the Board ’s first concern

— human - wi ldlife interaction . Richard s ’s planned mitigation actually exacerbated the B oard ’s second concern—

removal of wildlife habitat. Indeed, FWP and the Boardnoted that offering deference to such proposed mitigation would pose a significant issue if viewed in the aggregate . That is, this deference would encourage all landowners in th e Clearwater Junction area to fence out wildlife . The cumulative effect of this fencing ultimately would diminish w i ldlife habitat . The Boarda ccordingly had no duty to defer t o Richard s ’s proposed mitigation whenthe Board determined that the fence woul d exacerbate

— r ather10

than alleviate

—the Board ’swildlife concerns. ¶30 Richards also arg

ues that the Board unlawfully relied on information presented in hearings regarding Richard s ’s 2006 and 2007 applications . The Board relied, in part, on 2006 and 2007 tes timony from FWP and the Missoula County Rural Initiative s . Richards cites no provision of law that prohibits the County from considering this information . W e previously

hav e a llowed a go verning body br oad discretion with regard to a subdivision applicati on . See MM&I, LLC , ¶ 35 . This notion provesparticularly true when applied to clearly relevant testimony . ¶31 FWP noted that its 2006 and 2007 comments “still apply” to Richards’s 2010 application due to the application’s failure to address adequately wildl ife issues . Similarly, the Missoula County Rural Initiative noted that its testimony from 2006 and 2007 contain ed factual information “that is appropriate to the discussion of the wildlife resources on and in the vic inity of

t he property” in considering R ichards’s 2010 application . Richards conceded the relevancy of this testimony when he submit tedh is own 2006 and 2007 expert ecological reports in su

pport of his 2010 application. ¶32 Richards has presented no facts to demonstrate the County acted in an arbitrary and capricious manner. He attempts instead to disagree with the Board’s determination of facts . Richards’s arguments that the Board acted unlawfully are similarly unavailing . In particular, Richards challenges the Board’s consideration of FWP’s re port on wildlife issues . Richards has failed to establish, however, that the Board acted unlawfully in considering the FWP report. He similarly has failed to establish that the Board’s consideration of the FWP report lacked foundation . And finally, Ric hards has failed to establish that the Board violated the11

statutory provisions for consideration of possible deleterious effects on wildlife as set forth in the FWP report. The District Court properly granted summary judgment in the face of these undisput ed facts. ¶33 Whetherthe County was entitled to summary judgment on Richards’s regulatory taking claim? ¶34 Richards contends that the County’s denial of his subdivision constitutes a taking t hat entitles him to compensation . A person may recover no compensat ion , however, when he seeks to use his land in a manner prohibited by pre - existing rules or regulations . Lucas v. S.C. Coastal Council , 505 U.S. 1003, 1029 (1992) . Indeed, a personwho buys a parcel with existing regulatory restrictions has no grounds to a llege economic loss whena g ov erning body enforcesthose restrictions and he fails to realize his investment expectations . Palm Beach Isles Assocs. v. U .S. , 231 F.3d 1354, 1363 ( Fed. Cir. 2000) . A p ersonh as no reasonable expectation , w hen he purchasessuch property , that it may be used for a prohibited purpose . Palm Beach , 231 F.3d at 1363 . ¶35 Richards purchased the property with the intentof creating a subdivision . Richards fully understood , however, t hat he lawfully could subdivide the landonly with C ounty approval . Richards cannot now allege economic loss when he should have appreciated the risk that, due to existing law, his subdivision may never have materialized . Richards stands in the same place today that he was when he purchased the property

—the owner of a 200 - acre parcel that remains subject to subdivision review . Richards can sustain no t akings claim under these circumstances. ¶36 Affirmed.12 /S/ BRIAN MORRIS

We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JIM RICE

Justice James C. N elson, concurring. ¶37 I concur in the Court’s decision. I write separately regarding Richards’ argument that a party who challenges a governing body’s decision on a subdivision application should be able to rely upon “extraneous evidence” not contained in th e administrative record. Opinion, ¶ 21. ¶38 Richards cites Aspen Trails Ranch, LLC v. Simmons , 2010 MT 79, ¶ 53, 356 Mont. 41, 230 P.3d 808, in support of this argument. The source of this line of authority, however, is Skyline Sportsmen’s Assn. v. Bd. of La nd Commrs. , 286 Mont. 108, 951 P.2d 29 (1997), in which the Court made the following statement:

The standard of review of an informal administrative decision is whether the decision was arbitrary, capricious, or unlawful. North Fork Pres. v. Dept. of Stat e Lands (1989), 238 Mont. 451, 458 - 59, 778 P.2d 862, 867. It was appropriate for the District Court, in applying that standard, to accept new ev idence and not to limit its review to the administrative record. I n a proceeding to determine whether an agenc y decision was arbitrary, capricious, or unlawful, unless the reviewing court looks beyond the record to determine what matters the agency should have considered, it is impossible for the court to determine whether the agency took into consideration all re levant factors in reaching its decision. Asarco, Inc. v. U.S.E.P.A. ( 9th Cir. 1980), 616 F.2d 1153, 1160.13

Skyline Sportsmen’s Assn. , 286 Mont. at 113, 951 P.2d at 32. ¶39 As we have since recognized, Asarco does not stand for an unqualified rule permitting t he consideration of extra - record evidence when reviewing administrative decisions. To the contrary, the Asarco court limited the use of extra - record evidence to three purposes: for background information; for ascertaining whether the agency considered al l the relevant factors; or for ascertaining whether the agency fully explicated its course of conduct or grounds of decision. 616 F.2d at 1160. The court stated that “[c]onsideration of the ev idence to determine the correctness or wisdom of the agency’s decision is not permitted, even if the court has also examined the administrative record.” Id. Heffernan v. Missoula City Council , 2011 MT 91, ¶ 66, 360 Mont. 207, 255 P.3d 80. ¶40 A more recent statement of Ninth Circuit law still provides that judicial rev iew of ag ency action is “limited to the administrative record.” N.W. Envtl. Advocs. v. Natl. Marine Fisheries Serv. , 460 F.3d 1125, 1144 (9th Cir. 2006). The Ninth Circuit has recognized “a discrete set of narrow exceptions” to this rule, where a distric t court ma y ad mit extra - record ev idence: (1) if ad mission is necessary to determine whether the agency has considered all relevant factors and has explained its decision, (2) if the agency has relied on documents not in the record, (3) when supplementing the record is necessary to explain technical terms or complex subject matter, or (4) when plaintiffs make a showing of agency bad faith. N.W . Envtl. Advocs. , 460 F.3d at 1145. ¶41 In Aspen Trails , this Court held that the district court did not err when it co nducted an ev identiary hearing and admitted extra - record evidence. I n so doing, the Court simply recited the above - quoted paragraph from Skyline Sportsmen’s Assn. See Aspen Trails , ¶ 53.14

The Aspen Trails Court provided no limiting or qualifying language in its application of the Skyline Sportsmen’s Assn. rule. In the present case, however, the County argues a plausible interpretation of Aspen Trails as representing an extremely limited exception to the general rule that a court must limit its review to consideration of the record before the governing body when it issued its decision. SeeOpinion, ¶ 23. ¶42 In MM&I, LLC v. Bd. of County Commrs. , 2010 MT 274, 358 Mont. 420, 246 P.3d 1029, this Court held that the district court did not abuse its discretion wh en it refused the post - hearing testimony of two Gallatin County Commissioners. MM&I , ¶ 27. I t was necessary in the course of o ur decision to distinguish Aspen Trails . I n so doing, we su gge sted that the testimony at issue in Aspen Trails was properly adm itted because it was “in the form of additional information from an expert witness regarding the condition of the subject property which was not contained in the EA

—information which should have been included by law.” MM&I , ¶ 26. Conversely, the testimon y at issue in MM&I was properly excluded because it “concerned the Commissioners’ thought processes regarding actions taken more than five years earlier and where at least one of the Commissioners repeatedly stated that she did not recall the specifics of the matter.” MM&I , ¶ 26. ¶43 I acknowledge that I signed the Court’s opinion in Skyline Sportsmen’s Assn. and authored the Court’s opinion in MM&I . Af ter reconsideration, however, I believe that I voted wrongly, and I now conclude that the concurring and dis senting opinions in Skyline Sportsmen’s Assn. were correct as to this issue. See Skyline Sportsmen’s Assn. , 286 Mont. at 116 - 17, 951 P.2d at 34 (Buyske, D.J., sitting for Leaphart, J., specially concurring) (“I believe the path the majority chose . . . in vites future litigants to view district court15

proceedings as a means to do what should hav e been done at the administrative agency level

— dev

elop the record.”); 286 Mont. at 119, 951 P.2d at 36 (Gray, J., dissenting) (“I cannot join the Court’s sweeping eff ort to reconstitute the administrative record on which the Board made its decision in order to provide the plaintiffs a ‘second bite at the apple’ in their late effort to impact on that record and the ultimate decision in this case.”). ¶44 Accordingly, for the reasons expounded in Justice Rice’s Aspen Trails concurrence — with which I agreed, see Aspen Trails , ¶ 72 (Nelson, J., specially concurring)

—I would reject the broadly stated rule of Skyline Sportsmen’s Assn. , which the Court seemingly perpetuated in Aspen Trails . I would hold that review of the governing body’s action is limited to the record before the governing body at the time of its decision

— subject only to the narrow exceptions noted above. Heffernan , ¶ 66; § 2 - 4 - 704(1), MCA (review of an agency dec ision “must be confined to the record”). ¶45 Furthermore, to the extent that our reasoning at ¶ 26 of MM&I m ight be read as permitting extra - record evidence to support “unlawfulness” challenges, while prohibiting extra - record evidence to support “arbitrarinessor capriciousness” challenges, I would not adopt such a distinction. See Heffernan , ¶ 65 (explaining these standards). Whether the ev idence pertains to the lawfulness of the governing body’s action, or to the arbitrariness or capriciousness of

the go verning body’s action, the evidence should be made part of the administrative record so that the governing body is given the opportunity to remedy any alleged errors in its decision - making process prior to judicial review. Cf. State v. West , 2008 MT 338, ¶ 1 7, 346 Mont. 244, 194 P.3d 683 (“Above all else, the rationale underlying the timely - objection rule is judicial economy and bringing alleged errors to the attention of each16

court involved, so that actual error can be prevented or corrected at the first opp ortunity .” (emphasis added, internal quotation marks omitted)). ¶46 With these observations, I concur in the Court’s decision. /S/ JAMES C. NELSON