Nonresidents Claim City’s Action Was ‘Partial Taking’ of Their Property

Richard Clifton v. Village of Blanchester, Case no. 2010-1196
12^th District Court of Appeals (Butler County)

Matthew E. Moore et al. v. City of Middletown et al., Case no. 2010-1363
12^th District Court of Appeals (Butler County)

NOTE:  The two cases captioned above will be argued separately at the Court’s Sept. 6. Oral argument session. They are summarized together here because both raise the same legal issue, and the parties in both cases advance very similar arguments.

ISSUE:  When a city or other political subdivision grants an application for zoning or rezoning of property located within its geographic boundaries, do the owners of adjacent properties that are located outside of the political subdivision have legal standing to pursue a lawsuit against the subdivision based on a claim that the zoning has significantly reduced the value of their property, and therefore constitutes a partial regulatory “taking” of that property for which the owners are entitled to compensation?

BACKGROUND: In Case No. 2010-1196, Clifton v. Blanchester, the Village of Blanchester enacted an ordinance approving the rezoning of a 2.87 acre parcel of land within the village that was currently occupied by a machine shop.  The rezoning was  from “restricted industrial”  to “general industrial” use. Richard Clifton, the owner of a home and 99 acres of farmland immediately adjoining the rezoned property, but outside the Blanchester village limits, filed suit against the village in the Clinton County Court of Common Pleas.

In his complaint, Clifton alleged that the rezoning of the machine shop property constituted an unconstitutional partial “taking” of his property without compensation because the new zoning  classification would allow uses of that land that would make his adjoining property unattractive for future residential development, which Clifton alleged had been his intention at the time he purchased the land.  Asserting that his property had suffered a significant reduction in value because of the rezoning, Clifton asked the trial court to order the village to conduct an “inverse appropriation” proceeding in which the village would be required to compensate Clifton for the loss of value of his property arising from its regulatory action.

After initially granting partial summary judgment in favor of Blanchester, and having the case remanded by the 12^th District Court of Appeals for rulings on additional issues, the trial court entered summary judgment in favor of the village dismissing all of Clifton’s claims. The 12^th District reviewed and affirmed the trial court’s action, holding that 1) Clifton did not have legal standing to pursue a “takings” claim against Blanchester because he was not a resident of Blanchester and its rezoning of property adjacent to his had not denied him continued use of his land for farming or any other purpose; and 2) even if Clifton had standing to sue, he was not eligible to pursue a “partial takings” claim against the village pursuant to the U.S. Supreme Court’s decision in Penn Central Transportation Co. v. New York because Penn Central involved a regulatory action that directly addressed the plaintiff’s property, while the rezoning ordinance in this case did not directly address Clifton’s property.

In Case No. 2010-1363, Moore v. Middletown, the city of Middletown enacted an ordinance granting a requested rezoning of 157 acres within the Middletown city limits from residential to industrial, clearing the way for construction of a coke (industrial coal) processing facility on that property.

The owners of three parcels of residential property adjacent to the rezoned land but outside the city limits of Middletown, including Matthew and Lori Moore,  filed a lawsuit against the city in the Butler County Court of Common Pleas. In their complaint, the landowners sought a declaratory judgment that because the proximity of a coal-processing facility would significantly reduce the value of their residential properties, the rezoning ordinance was an unconstitutional regulatory taking of their property without due process of law. They asked the court to issue a writ of mandamus compelling Middletown to initiate inverse appropriation proceedings to compensate them for the reduced value of their property resulting from the rezoning.

Middletown moved for summary judgment, asserting that the plaintiffs’ complaint should be dismissed for failure to state a claim for which the court could grant relief because the plaintiffs’ property was outside the city limits, and the city had no eminent domain authority to condemn or appropriate land outside its geographical borders. The trial court agreed, and entered summary judgment in favor of the city.

The landowners appealed.  On review, the 12^th District Court of Appeals held that the trial court had erred in even considering the landowners’ takings claims on the merits because the plaintiffs were not residents of Middletown and its rezoning ordinance was not directed to their property, and therefore they lacked legal standing to pursue a lawsuit against the city based on the rezoning. The court of appeals went on to hold that, even if the landowners had standing to sue, the trial court was correct in holding that the remedy they asked for – an order compelling Middletown to appropriate and pay them for their property --  was not within the legal authority of the city.

The plaintiff landowners in both cases sought and were granted Supreme Court review of the 12^th District’s rulings.

Attorneys for Clifton and the Moores contend that, although no Ohio court decisions have held that a nonresident has legal standing to challenge the zoning or rezoning of property adjacent to their own by a neighboring political subdivision, a majority of other states and federal courts that have considered the issue have held that a nonresident does have standing to challenge a political subdivision’s zoning action if he can show that he will be substantially, directly and adversely affected by the rezoning.

In each of these cases, they say, the 12^th District erred in affirming summary judgments against the plaintiffs  because the plaintiffs had presented pretrial evidence sufficient to create a material question of fact regarding whether the zoning ordinances enacted by Blanchester and Middletown had a significant negative impact on the current and future value of the adjacent property.  Pursuant to the U.S. Supreme Court’s holding in Penn Central, the plaintiffs contend, their cases should be allowed to proceed to trial where a judge or jury could reasonably find that the challenged rezoning ordinances constituted a partial regulatory taking of their property, entitling them to compensation. 

Attorneys for Blanchester and Middletown urge the Court to affirm the 12^th District’s rulings  that, because the zoning ordinances at issue did not effect a “taking” of the plaintiff’s property either by appropriating it for a public purpose or by imposing a government regulation that deprived the owners of a current or future use of their property, under Ohio law the plaintiffs do not have legal standing  to challenge those ordinances in court. If the Court finds that the plaintiffs do have standing to bring a “partial takings” claim based on the  U.S.  Supreme Court’s holding in Penn Central, Blanchester and Middletown argue that such a claim must fail because the plaintiff in Penn Central was the owner of property located in New York City that was directly impacted by a New York City ordinance that prohibited the owner from making a desired use of its property.

With regard to the public policy implicated in these cases, the defendants argue that if the Court were to adopt the position of the plaintiffs, any political subdivision granting  a future zoning or rezoning application by the owner of property located within its borders would face the prospect of multiple lawsuits by owners of adjacent properties, including property outside the zoning authority’s borders, alleging loss of property value because of the zoning decision and demanding compensation for those alleged losses.

Contacts
Jay C. Bennett, 513.523.4104, for Matthew and Lori Moore.

Robert J. Gehring, 513.784.1525, for the City of Middletown.

William G. Fowler, 513.932.7444, for Richard Clifton.

Lawrence E. Barbiere, 513.583.4200, for the Village of Blanchester.