May 9, 2013

Supreme Court should allow property owners to seek damages for unlawful zoning decisions

By Brian T. Hodges Senior Attorney

PLF attorneys filed a petition for review with the Washington Supreme Court this week in a case called Manna Funding, LLC v. Kittitas County.  This is an important property rights case in which PLF seeks reversal of a lower court decision that stripped property owners of vital safeguards in the land use permitting process.

The case centers on Manna’s efforts to rezone about 100 acres of its property near Roslyn, Washington, for residential development.  Manna’s rezone application met all of Kittitas County’s criteria for approval, but the county twice denied the rezone for reasons extraneous to those criteria.  Manna successfully challenged the county in court after each denial, overturning the unlawful denials and eventually securing the rezone.  The problem?  Litigating against the county took nearly three years, during which time Manna suffered substantial losses as a result of the county’s unlawful delay.

In 2011, Manna filed a lawsuit to recoup its losses.  It argued that Washington state law allows property owners to recover damages that result from the government’s unlawful acts during the permitting process.  Manna also argued that the county violated its due process rights under the Fourteenth Amendment by arbitrarily denying the rezone application.  Neither claim met with success.  The Washington Court of Appeals held that Manna could not recover under state law because a rezone is not the kind of “permit” for which damages are available, and also held that due process protection did not cover Manna because the rezone request did not implicate Manna’s property rights.

The notion that the government is not liable for damages if it unlawfully denies a rezone application conflicts with Washington Supreme Court opinions which demonstrate that site-specific rezones should not be exempt from damages claims.  And the lower court’s conclusion that due process does not apply when the government unlawfully denies a rezone application ignores U.S. Supreme Court and other federal cases which establish that property owners are protected from arbitrary zoning decisions that affect their constitutional right to use their property.

We are hopeful that the Washington Supreme Court will agree to hear Manna’s case later this year.  The ability to recover damages when the government makes unlawful zoning decisions helps level the field between property owners and the government.  Property owners deserve that protection.

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