Opinion ID: 2583951
Heading Depth: 4
Heading Rank: 3

Heading: The trial court must apply the balancing of interests test if the Railroad's efforts to comply with local zoning laws fail.

Text: Because the legislature did not state explicitly whether it intended the Railroad to be immune and because we do not find sufficient evidence to impute to it the intent to rely on a presumption of immunity, we must adopt a test to discern the legislature's intent. We have never addressed the issue and there is no consensus among other jurisdictions regarding what test should be applied to determine whether the legislature intended a state agency to be immune from local zoning ordinances. [64] In the absence of a clear expression by the legislature of its intent, there are four tests generally used by courts to resolve intergovernmental land use disputes: the superior sovereign test, the eminent domain test, the governmental function test, and the balancing of interests test. [65] The superior sovereign test, the source of the traditional presumption of immunity, focuses on the relationship between the competing political entities. If the agency whose activities might be regulated is superior to the regulating authority, it is presumed that the legislature intended the superior agency to be immune from regulation. [66] Where two governmental entities are of equal rank, the court will resort to rules of statutory construction to determine whether one's regulations should govern the other. [67] In a case like this one, where a local authority seeks to regulate a state instrumentality, the superior sovereign test presumes that the legislature intended the state instrumentality to be immune. Under the eminent domain test, if a state agency has the power of eminent domain, it is immune from local zoning regulations. [68] The theory behind this test is that the power of eminent domain is inherently superior to the exercise of the zoning power [69] and thus there is a presumption that the legislature intended the state or its agency to be immune from local zoning laws if it granted that entity the power of eminent domain. [70] Whether the legislature is deemed to have intended a governmental entity to be immune from local laws under the governmental function test depends on the purpose of the intended land use: If a use furthers a private purpose, as opposed to a governmental function, there is no immunity. [71] A proprietary land use is said to be one conferring private advantage pursuant to permissive legislation [72] or a function undertaken by a governmental entity in a business, private, or corporate capacity. [73] In contrast, a governmental function has been characterized as a political function or as a function mandated by statute and performed by the governmental entity in furtherance of its duty to discharge its obligation for the health, safety and general welfare of the public. [74] Under this test, [a] municipal corporation in the exercise of a governmental function is not subject to zoning laws or ordinances either within or outside the municipal boundaries. [75] This test was developed as a judicial response to the breadth of the superior sovereign and eminent domain tests by limiting immunity to governmental functions, [76] and it evolved in the context of governmental immunity from tort claims. [77] Although many courts have abandoned the governmental function test, a few continue to apply it. [78] All three of these older tests have been heavily criticized because they have led courts to frequently resolve[] such [intergovernmental] conflicts in perhaps too simplistic terms and by the use of labels rather than through reasoned adjudication of the critical question of which governmental interest should prevail in the particular relationship or factual situation. [79] In particular, critics of the superior sovereign test urged upon us by the Railroad and relied upon by the dissent cite defects such as the test's lack of safeguards against irresponsibility, the practical difficulties inherent in developing a system of sovereign ranking, the inconsistencies in the test's application, the inability of the test to deal with conflicts between governmental units of equal rank, and the test's failure to recognize that all units of local government are `equally' agents of the state. [80] Courts and commentators also have criticized the governmental function test as being difficult to apply and as requiring an often-tenuous distinction between governmental and proprietary functions. [81] We agree that these three traditional tests are unduly rigid and we join the growing ranks of jurisdictions who have rejected these tests in favor of the balancing of interests test. In Rutgers, the State University v. Piluso , the New Jersey Supreme Court recognized that the scope of immunity may be limited, and that its scope is best determined by applying a balancing of the interests test. [82] The burden is on the governmental entity that seeks exemption from local zoning laws to prove that a balancing of the following factors weigh in favor of immunity: [83] the nature and scope of the instrumentality seeking immunity, the kind of function or land use involved, the extent of the public interest to be served thereby, the effect local land use regulation would have upon the enterprise concerned and the impact upon legitimate local interests. [84] The court noted the importance of the flexibility of this test, [85] and emphasized that even where the balance tips in favor of immunity, it must not ... be exercised in an unreasonable fashion so as to arbitrarily override all important legitimate local interests. [86] Some form of a balancing of interests test has been embraced in at least fourteen jurisdictions: Delaware, Florida, Indiana, Iowa, Kansas, Minnesota, Missouri, New Jersey, New York, North Dakota, Ohio, Oklahoma, Rhode Island, and South Dakota. [87] Others have approved it in dicta. [88] A few other states, while not explicitly adopting balancing tests, resolve such conflicts by assessing the necessity for the state's action, [89] or the reasonableness of the state's exercise of immunity, [90] or of the zoning ordinance, [91] tasks that may easily turn into a balancing of interests. A similar balancing methodology has been endorsed by the drafters of the American Law Institute Model Land Development Code. [92] We join those courts, adopting the factors as articulated by the New Jersey Supreme Court. Resort to the balancing of interests test is limited by two threshold requirements. First, because the test aims to discern legislative intent, direct statutory grants of immunity control when they exist. [93] Second, the court will not resolve conflicts under the balancing test unless the state has made a reasonable good faith attempt to comply with local zoning laws. [94] This second requirement is consistent with the premise that the basic purpose of the doctrine of exhaustion of administrative remedies is `to allow an administrative agency to perform functions within its special competenceto make a factual record, to apply its expertise, and to correct its own errors so as to moot judicial controversies.' [95] Requiring the Railroad to first attempt to comply with Anchorage's zoning procedures enhances the possibility that the parties will reach an accommodation that serves the public interest underlying both the zoning power and the Railroad's quarrying activity without resorting to judicial remedies. [96] Because the Railroad has not yet sought the conditional use permit required by the Anchorage zoning ordinance, neither this court nor the superior court should yet apply the balancing of interests test. If the Railroad continues to want to operate the quarry, it should apply for a conditional use permit from the Municipality. If the result of that application is unsatisfactory to it (or any other interested party), further proceedings may follow. The balancing of interests test has been criticized by the Pennsylvania Supreme Court as amounting to judicial legislation because it yields uncertain results and requires courts to resolve intergovernmental land use disputes where the legislature is silent. [97] The eminent domain test, the superior sovereign test, and the governmental function test admittedly may provide a more clear-cut resolution to intergovernmental zoning disputes in some cases. But the very fact that the balancing of interests test does not yield highly predictable results, coupled with the requirement that the state first attempt to comply with local zoning laws, may promote good faith attempts at accommodation by the parties and minimize the need for judicial intervention. [98] We conclude that the balancing of interests test represents the most enlightened approach to determining the legislature's intent with regard to the applicability of local zoning laws to state agencies. We agree with the Minnesota Supreme Court that [t]he trend is to limit [the state's] freedom from regulation, a trend which we believe is well within the dictates of the public interest, principally because the pungent realities of urban sprawl and overpopulation have accentuated the need for land-use planning and control. [99] In adopting the balancing of interests test, we join the ranks of American jurisdictions that have rejected the formalistic approaches of the traditional tests. [100]