May 30, 2012

Do property owners have a right to recover damages for bureaucratic delay?

By Brian T. Hodges Senior Attorney

At PLF, we litigate for judicial acceptance of the idea that property owners should be allowed to reasonably use their property without undue interference from the government.  Many of our clients, such as Wendy Birnbaum, believe in this principle, but find themselves tangled in red tape when they actually exercise their property rights.

Ms. Birnbaum was stuck in a permitting “vortex” with Pierce County, Washington, for over five years before she finally obtained approval to convert her property into a campground in the foothills of Mt. Rainier.  After the county granted the permit, Ms. Birnbaum sued to recover for massive losses she suffered as a result of the county’s delay, but the court dismissed her case because she did not sue quickly enough.  The irony of the court’s unacceptable decision was not lost on PLF attorneys, who have taken on Ms. Birnbaum’s case and are preparing to file a petition for review to the Supreme Court of Washington.

Ms. Birnbaum’s lawsuit turns on the interpretation of Revised Code of Washington, Chapter 64.40, titled “Property rights – damages from governmental actions.”  This statute allows property owners to seek relief for damages arising from government misfeasance during the land-use permitting process.  However, the statute requires plaintiffs to “exhaust administrative remedies”—meaning that property owners must seek a final decision through the permitting agency’s specified channels—before suing in court.  Following this instruction, Ms. Birnbaum waited to sue until after the county hearing examiner issued a decision on her permit application.  But the Washington Court of Appeals published an opinion in April holding that Ms. Birnbaum should have sued the county sometime earlier (the court didn’t say when, exactly), before the permit decision issued and the opportunity to exhaust administrative remedies arose.

Ms. Birnbaum’s case is a perfect example of how excessive bureaucracy can cost a property owner the ability to exercise her property rights, and lots of money to boot.  Not only that, but the county’s sluggishness has pushed back the opening of the campground—a great amenity for the public—by several years, at least.

We hope that the Court will review Ms. Birnbaum’s case and uphold Chapter 64.40 as an effective remedy for property owners where government bungles the land-use permitting process.  Incidentally, PLF has a history of participation in lawsuits involving Chapter 64.40 at the Washington Supreme Court, including the 1997 case Hayes v. City of Seattle, where the Court ruled that a property owner who waited to sue until after the city’s final decision on his permit was entitled to damages.

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