Saturday, October 29, 2011

What Am I Missing?

In re SP Land Co., LLC, Act 250 Land Use Permit Amendment, 2011 VT 104.

Today’s case is an appeal from an Act 250 Amendment and asks the head-stumping question, Can you seek an administrative amendment when the underlying permit is not there?  The answer is a closer call than you might think.

In 1998, the owners of the Killington Resort Village sought approval from the District Commission for an Act 250 master plan and permit.  This permit would have streamlined future development and given the applicants pre-approval on critical Act 250 criteria.  In 1999, the District Commission ruled that the master plan met five out of the ten criteria and multiple sub-criteria for a permit under Act 250.  As to the remaining criteria, the Commission issued a “weather report” about the applicants’ likelihood of success, but the Commission did not issue any final ruling or a permit.

The applicants and at least one group challenging the applicants appealed this preliminary decision to the Environmental Board (a citizen board where all Act 250 appeals went prior to 2004’s permit reform).  The Board only reviewed the Commissions partial findings, and it issued no permit to the applicants.

In 2004, the partial decision received two administrative approvals from the District Commission.  The first amended the decision to include a plan to subdivide the applicant’s 470 acres into nine lots.  The second renewed the decision as it was due to expire five years after its issuance. 

These amendments were done under Rule 34(D) of the Act 250 rules.  This rule, though, only covers minor revisions that are unlikely to have any impacts on the statutory criteria of Act 250.  Again no permit issued to the applicants.

In 2008, applicants’ luck ran out.  That year, they filed a third amendment seeking to reconfigure the nine lot subdivision to fifteen.  While the District Commission approved the application, a neighbor filed a motion to alter, and when that was denied, neighbor appealed to the environmental division of the superior court. 

Although neighbor filed a statement of 15 questions with the court, its biggest challenge questioned the administrative nature of a fifteen lot subdivision.  Nevertheless, the trial court ruled in favor of applicants on all 15 questions finding that the application was administrative in nature and satisfied the Rule 34(D) criteria. 

Following this ruling, neighbor appeared to have had an epiphany or at least an Emperor-Has-No-Clothes moment because it filed a motion to alter and amend on the basis that a fifteen-lot subdivision cannot be issued without consideration of all of the statutory criteria—something that had never occurred in this case because the applicants had never pursued their original permit. 

The trial court sought guidance from the Natural Resources Board that promulgates the Rules for Act 250, and that Board confirmed: no permit, no administrative amendment. 

Despite this information, the trial court denied the motion to alter and affirmed the administrative approval.  Neighbor appealed to the SCOV.

On appeal, neighbor put the lack of the permit front and center in its filings.  The first question for the SCOV became whether the neighbor had the right to raise this issue and whether neighbor waived it by failing to raise it until a post-judgment motion to alter. 

For the entire SCOV, the answer to the first is a clear affirmative.  Neighbor had a broad interest in the application and sought to challenge its administrative grant.  That was sufficient for neighbor to have standing to raise the issue.  As to the second question, there is a split.  For the majority, the issue is so fundamental that its late entry into the litigation is not important because it goes to the fundamentals of not only the appeal but the Commission’s jurisdiction of the underlying application. 

For Chief Justice Reiber, though, the late hour is fatal to neighbor, and he dissents on this point and by extension, the outcome of the case.  For the dissent, the issue is not so fundamental as to permit an 11th-hour motion to undo a final judgment, especially when there is no reason that the issue could not have been raised earlier. 

The majority, however, is more than comfortable taking the issue up and continues its analysis.  The lack of an underlying permit is fatal to applicant’s efforts to administratively amend the earlier decision.  The remedy is to remand to the lower court for a ruling that will likely kick the entire application back to the District Commission for a hearing on the outstanding Act 250 criteria and a full throated challenge from neighbor.  Far from the quick fix applicants were looking for, this process, if neighbors continued to be motivated, looks to go on for awhile.

Yet, there is metaphysical and epistemological comfort to take in the SCOV’s ruling.  Administrative amendments to permits that do not exist will not fly—even in land use law.  You need your initial permit and the concomitant hearing process before you can start seeking approval for changes that fly under the public’s radar.  

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