Court Opinion

ID: 5150051
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:52:06.781272+00
Date Added: 2024-06-11T08:25:00.043451
License: Public Domain

Justice KOURLIS
specially concurring:
I join the majority's conclusion that this case must be remanded to the trial court for a new trial under the correct legal standard. However, I disagree with the majority's construction of that standard. First, I would apply the Colorado Constitution and would not limit it as the majority does. Second, even under federal law, I suggest that the majority has imposed unwarranted restrictions on the applicable test for determining when a regulation works a taking. Accordingly, I respectfully concur in the result of the majority opinion, but write separately to identify my concerns.
L.
The undisputed facts of this case demonstrate that before the Board of County Commissioners of La Plata County (the Board) adopted the Animas Valley Land Use Plan (the Plan), Animas Valley Sand & Gravel, *70Ine. (AVSG) owned property rich in sand and gravel deposits that AVSG intended, in the future, to extract. After the adoption of the Plan, AVSG was no longer entitled to make that use of its property. The Board adopted the Plan for the public benefit in order to protect the riparian and wildlife habitat of the Animas River, to provide a safety net for flood damage, and to promote a seenic corridor in the Animas Valley-unmarred by an unsightly gravel operation.
The trial court bifurcated the proceedings and first addressed the question of whether there had been a taking, leaving the issue of damages and just compensation for a possi-bie later trial-which never occurred. In the first trial, the trial court required AVSG to prove that, after the adoption of the Plan, there was no reasonable use remaining on the AVSCG property.
The trial court did not address reasonable investment-backed expectations in the property, as measured by the feasibility of additional sand and gravel mining; and the trial court did not permit AVSG to introduce evidence concerning the value of its property before adoption of the Plan and after adoption of the Plan. The trial court erred as a matter of law, and the court of appeals upheld that error. The majority correctly remands the case back to the trial court to correct those errors.
IL
Initially, however, I differ with the majority's reading of the Colorado Constitution. As the majority recites, Article II, section 15 of the Colorado Constitution provides that "[plrivate property shall not be taken or damaged, for public or private use, without just compensation." Its federal counterpart contains no reference to "damage." See U.S. Const. amend. V.
When the state constitution differs in language or in historical context from the United States Constitution-and only in those instances-this court should give effect and has historically given effect to the differences. At the time of drafting of our constitution, Colorado still had land available for homesteading. We were primarily agricultural and populated by individuals who were attracted to open spaces and opportunity-in the form of property rights.
Within that framework, this court has, for over a century, concluded that our constitution provides broader protection to private property rights than does the United States Constitution. E.g., Cent. Colo. Water Conservancy Dist. v. Simpson, 877 P.2d 335, 347 (Colo.1994) (citing the established "principle that the takings clause of our constitution prohibits governmental conduct that might not be deemed a taking for purposes of the federal Constitution"). In the first case to address the provision, City of Denver v. Bayer, 7 Colo. 113, 118, 2 P. 6, 9 (1883), the court granted damages to a plaintiff whose property had been damaged by the construction of a railway on an abutting street. The court accepted that the word "taking" might well be limited to a physical invasion or possession, but that "damage" could not be so limited. Id. at 120, 2 P. at 10. Rather, after surveying the law from which the constitutional provision was apparently borrowed, the court clearly concluded that our constitution required compensation to an owner of property for the actions of the government that impaired the value of that property disproportionately. Id. at 124, 2 P. at 12. The measure of compensation allocable to such injury was identified as "the actual diminution in the market value of his premises, for any use to which they may reasonably be put, occasioned by the construction and operation of the railroad through the adjacent street." Id. at 127-28, 2 P. at 15.
In 1894, the court reiterated that the purpose of inserting "damaged" in the constitution was to add an additional right of action for landowners. City of Pueblo v. Strait, 20 Colo. 13, 18, 36 P. 789, 791 (1894). Further, in Harrison v. Denver City Tramway Co., 54 Colo. 593, 597, 131 P. 409, 411 (1913), the court held that a plaintiff was entitled to compensation when
some right in, user of, or interest pertaining to property ... has been wholly or partially destroyed.... The right disturbed may be either public or private, but it must be a right which she enjoyed in connection with her property, and which *71gave to it an additional value, and without which, or as affected by the disturbance, the property itself is damaged. The disturbance of the right or easement may be at a distance from the property injured, but the interference must be with some right held with regard to that property.
Hence, we have a rich history of interpreting our constitution to provide broad protection to private property interests. The majority construes that case law in a very limiting fashion so as to constrain the "damage" clause of the Colorado Constitution solely to those instances where landowners claim that they have been damaged by governmental invasion or possession of abutting lands, without any physical taking of their own property. See maj. op. at 68. For that proposition, the majority cites City of Northglenn v. Grynberg, 846 P.2d 175 (Colo.1993), a case in which this court declined to find a taking when Northglenn acquired the surface estate overlying Gryn-berg's coal lease and drilled a core hole into that leasehold, which demonstrated that there were no commercially exploitable coal reserves in the lease. On the question of whether Northglenn had "damaged" Gryn-berg (as distinguished from taking something from him), the court held that
Northglenn did nothing which would have impaired GGrynberg's exploration for or mining of coal in the coal lease.
Furthermore, there is no evidence that Northglenn obstructed Grynberg's ingress or egress to his property. There is no evidence that Northglenn's acts affected a right or interest he enjoyed in connection with his property which is not shared with or enjoyed by the public generally. In other words, the law of constitutional dam-agings does not apply to the undisputed facts of this case.
Grynberg, 846 P.2d at 185.
Hence, although the majority here cites Grynberg for the proposition that the "damage" clause of the Colorado Constitution is limited to a narrow area of damage visited upon property abutting a governmental activity, in fact, the court applied that clause much more broadly in G@rynberg to analyze just the issues that I suggest courts should appropriately analyze.
Indeed, in Simpson, we cited Grynberg for the proposition that the takings clause of our constitution prohibits governmental conduct that might not be deemed a taking for purposes of the federal constitution because the "Colorado Constitution permits property owners whose property is substantially damaged by governmental action to obtain legal redress for such damage even though the action does not constitute a physical invasion of the property." Simpson, 877 P.2d at 347.
Colorado has long recognized that a property owner who has suffered damage to his rights of ownership or use by operation of governmental action in a manner that differs in kind from that suffered by the public generally is entitled to compensation. The damage must differ in kind, not merely in degree. Gilbert v. Greeley, S.L. & P. Ry., 13 Colo. 501, 510, 22 P. 814, 817 (1889). The right for which compensation is awarded should be a right that gives the property additional value and by the disturbance of which the property itself is devalued. Harrison, 54 Colo. at 597, 131 P. at 411. Lastly, the measure of damages is quite simply the difference in market value of the property before and after the government action. Dandrea v. Bd. of County Comm'rs, 144 Colo. 343, 348, 356 P.2d 893, 896 (1960).
We are bound by that precedent. Under that case law, AVSG need only produce evidence that its vested rights were damaged by the Plan and the value of its property was accordingly diminished. John J. Delaney & Emily J. Vaias, Recognizing Vested Development Rights as Protected Property in Fifth Amendment Due Process and Takings Claims, 49 Wash. U.J. Urb. & Contemp. L. 27, 38 (1996).
IIL
More broadly, even if this case is governed by federal law, I would offer broader and more complete directions to the trial court concerning the application of Palazzolo v. Rhode Island, 533 U.S. 606, 121 S.Ct. 2448, 2457-58, 150 L.Ed.2d 592 (2001), decided by the United States Supreme Court last Term.
*72A.
I do agree that Palazzolo specifically clarifies that courts are to evaluate regulatory action at two levels: first, if the action denies all economically productive or beneficial use of the land, it is a per se taking that requires compensation. Id.. at 2457. Second, even if the action does not go that far, but does economically affect the landowner and interfere with the landowner's reasonable investment-backed expectations, it may nonetheless be a compensable taking depending upon various factors. Id. As to this latter category, the Court concluded that such an "ad hoe" inquiry is mandated by the purpose of the Takings Clause, which is "to prevent the government from 'forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." " Id. at 2457-58 (quoting Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960)).
The majority in Palazzolo remanded that case to the trial court to enable the landowner to attempt to establish a compensable taking under the second, fact-specific inquiry. Palazzolo, 121 S.Ct. at 2465. The Court did not set out a comprehensive test to govern that determination, and also did not resolve the issue of what the "proper denominator" should be in a takings case-or, stated otherwise, what the courts should use as the landowner's property interest to be examined in determining value before damage, but rather specifically declined to address that issue. Id.
Accordingly, I suggest that the majority here is correct in answering the first question on which we accepted certiorari in the affirmative. Even in federal law, after Pa-lazzolo, it is clear that there may, indeed, be a compensable, regulatory taking when some economically viable use remains on the property. Palazzolo, 121 S.Ct. at 2457. However, the majority greatly limits Palazzolo by concluding that the "ad hoe" test only addresses the rare situation where a landowner "whose land has a value slightly greater than de minimis" is entitled to compensation. See maj. op. at 65. I agree that the appropriate test for measuring the landowner's entitlement to compensation includes: (1) the economic impact of the plan; (i) the plan's impact on investment-backed expectations; and (%i) the net value of the land before and after the plan. I do not agree that such a formulation then leads only to compensation in rare cireumstances where the landowner is left with next to nothing. In fact, in my view, Palazzolo specifically rejected that approach as the "per se" approach, and broadened both the inquiry and the class of com-pensable takings accordingly.
B.
Other courts that have addressed Palazgo-lo have taken a broad approach. Two cases are, perhaps, relevant as we attempt to determine how to apply Palazzolo. The Alaska Supreme Court decided a case recently in which it held that a landowner was not entitled to compensation for damage caused to his right to develop a twenty-foot strip of land adjacent to a regulated wetlands setback area. R & Y, Inc. v. Municipality of Anchorage, 34 P.3d 289, 300, 2001 Alas. LEXIS 122, at *38 (Alaska 2001). The court applied the Alaska Constitution,1 noting that both the United States Constitution and the Alaska Constitution required the "ad hoe" factual analysis discussed in Palazzolo. Id. at 298. Courts in Alaska engaging in the "ad hoe," case-specific analysis consider four factors: (1) the character of the governmental action; (2) its economic impact; (8) its interference with reasonable investment-backed expectations; and (4) the legitimacy of the interest advanced by the regulation or land-use decision. Id. The supreme court determined that the trial court had properly allowed the landowner to present evidence on all four factors and that the trial court had then found that the landowner failed to prove any real diminution in value of his land as a result of the regulations at issue. Id. at 296. The court upheld those findings and conclusions as supported by the evidence. Id. at *73300. Neither the trial court nor the supreme court required the landowner to demonstrate that his land had only a "de minimis" value or that all reasonable use of his property had been eliminated; rather, they both applied the more expansive test, but concluded that the landowner had failed in his burden. Id.
In a California Court of Appeal's case, Cwynar v. City & County of San Francisco, 90 Cal.App.4th 637, 109 Cal.Rptr.2d 233 (2001), review denied, 2001 Cal. LEXIS 6617 (Cal. Sept. 26, 2001), that court considered a challenge to an ordinance that restricted a property owner's ability to eviet a tenant from a residential rental unit so that the property owner or a close family member could occupy the unit. The plaintiffs sued the City and County of San Francisco for, among other claims, inverse condemnation. Id. at 240. The California Constitution parallels the United States Constitution and provides compensation only for takings, but the court of appeal observed that under both the federal, citing Palazzolo, and state constitutions, courts must engage in an "ad hoe" analysis to determine whether a taking has occurred. Id. at 250. That court focused on two factors: the government's purpose for enacting the regulation; and second, the impact of the regulation on the property owner-to be evaluated under a thirteen-step test. Id. at 258. The test factors included: (1) whether the regulation affects the present or past use of the property, thus interfering with the owner's primary expectation; (2) whether the regulation permits the property owner to profit and benefit from a reasonable return on his investment; (8) whether the regulation affords the property owner benefits and rights mitigating the financial burdens the law has imposed; (4) whether the regulation prohibits the most beneficial use of the land; and (5) whether the regulation nullifies a fundamental attribute of ownership. Id. at 253 n. 9. In the end, the court concluded that the plaintiffs had sufficiently alleged that the regulation fundamentally changed and restricted the use of their residential real property, and that they had sufficiently alleged a disproportionate impact from the regulation by reason of being unable to inhabit their own apartments in order to accommodate public housing needs. Id. at 255. Such allegations were sufficient to survive demurrer, and the court sent the case back for further fact-finding. Id. at 256.
Thus, the two courts that have applied Palazzolo since its announcement have both concluded that the inquiry should be broad and inclusive. I would urge a similar application here, which would give the trial court tools with which to measure the impact of any taking.
C.
I also note that the adoption by the United States Supreme Court of the second portion of the inquiry in a takings case greatly diminishes the importance of the "denominator" question, and under both state and federal law, we need not wade into that quagmire. Prior to Palazzolo, under Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), federal law provided that a taking occurs when the regulation "denies all economically beneficial or productive use of land." Under that formulation, therefore, a court had to compare the loss of property use precluded by a regulation with all use rights in that property in order to determine whether the taking was compensable. The resulting struggle rested in the definition of the relevant property interest. For example, if the relevant property interest were defined narrowly enough, then a taking would always occur. On the other hand, if it were defined broadly enough, a taking would never occur. See John E. Fee, Unearthing the Denominator in Regulatory Taking Claims, 61 U. Chi. L.Rev. 1535, 1536 (1994). Here, the example would be that if AVSG defined the relevant property interest as its right to mine sand and gravel, or its mineral estate in sand and gravel, then the estate was fully taken by the regulation, and compensation would be due. If, on the other hand, the Board defined the interest as all property AVSG or its affiliates owned in the county, then the mineral interests in a portion of one tract would certainly not be "all beneficial or productive use" of AVSG land, *74and therefore compensation would not be due.
I suggest that Palazzolo rightfully eliminates that shell game from the process of determining whether a governmental regulation "goes too far," and suggests a different approach completely. Under Palazzolo, a regulation can go too far if it economically affects the landowner and impacts reasonable investment-backed expectations: it no longer need work a taking of all economically viable uses. Palazzolo, 121 S.Ct. at 2457. For example, a landowner who owns a fee surface and mineral estate whose mineral estate is completely taken by operation of government regulation will be treated by the courts the same way as a mineral owner who owns no surface estate but who is similarly deprived of the mineral estate by government regulation. It is not the cumulative number of sticks in the bundle of property rights that should affect the question of whether one right has been wholly or partially taken. Rather, it is the question of whether the right that is taken results in real economic damage-not blue sky speculative damage.
D.
An additional factor that a court must consider in assessing a takings claim in this context is the legitimacy of the governmental action itself. Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). The majority concludes that there is ample evidence in the record to establish the legitimacy of the Plan and concludes that this factor weighs in favor of the county. See maj. op. at 66 & n. 5. In my view, the trial court should revisit that question and assess whether the county correctly treated the master plan as binding. I resist the assumption that the Board has any right to impose upon or regulate use of private property by means of a master plan.
A master plan is the broadest of all planning tools available to local governmental entities. It is intended to encourage visionary thinking, which contemplates and designates in a descriptive and explanatory manner the general location of various uses within the county. § 30-28-106(3), 9 C.R.S. (2001). A master plan "is advisory only," § 30-28-106(3)(F), and this court has specifically observed that master plans are not the equivalent of zoning, nor binding upon the zoning authority. Theobald v. Bd. of County Comm'rs, 644 P.2d 942, 948-49 (Colo.1982) (holding that "[clonceptually, a master plan is a guide to development rather than an instrument to control land use," and describing a master plan as a "recommendation of the most desirable use of land" that is "generally held to be advisory only"). A master plan can have no regulatory effect unless or until it is implemented through zoning or through a Planned Unit Development. Theobald, 644 P.2d at 950; see generally Beaver Meadows v. Bd. of County Comm'rs, 709 P.2d 928 (Colo.1985).
In this case, the Plan deprived AVSG of any right to continue the extraction of sand and gravel at any time, rather than merely restricting some speculative prospective use. Further, the Plan was not adopted as a part of any specific and exact zoning or subdivision regulation. Hence, the trial court should carefully examine the legitimacy of the governmental action based on whether the master plan properly governed the use of AVSG's property, absent further implementing regulation or zoning.
IV.
In conclusion, I suggest that the majority appears to hold AVSG to a standard more akin to a per se takings analysis, warranted neither by the United States nor Colorado Constitutions. In my view, on remand, the trial court should consider the legitimacy of the governmental action in light of the nonbinding status of a master plan. Further, the trial court should determine the value of the entire property owned by AVSG and contained within the River District both before and after the Plan's adoption. If there is a diminution in value after adoption, the trial court should then determine: () whether the diminution is attributable to the Plan; and (ii) whether the diminution relates to AVSG's reasonable investment-backed expectations. If the answer to both of those questions is yes, then AVSG should be awarded the difference in value as a compensable inverse condemnation of certain uses of its *75property. I therefore specially concur in the majority's judgment only.
I am authorized to state that Justice COATS joins in this special concurrence. ©

. Article I, section 18 of the Alaska Constitution contains the same provision that "private property shall not be taken or damaged for public use without just compensation" as does our constitution.