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Earth Movers of Fairbanks v. Fairbanks North Star Borough (12/17/93), 865 P 2d 741
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Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
corrections may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
EARTH MOVERS OF FAIRBANKS, )
INC., ) Supreme Court No. S-5186
)
Appellant, ) Trial Court No.
) 4FA-90-2275 Civil
v. )
) O P I N I O N
FAIRBANKS NORTH STAR BOROUGH, )
)
Appellee. ) [No. 4037 - December 17, 1993]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Fourth Judicial District,
Fairbanks,
Dale O. Curda,
Judge.
Appearances: Joseph L. Paskvan, Hoppner
& Paskvan, P.C., Fairbanks, for Appellant.
Mark Andrews, Assistant Borough Attorney,
Fairbanks, for Appellee.
Before: Moore, Chief Justice,
Rabinowitz, Burke, Matthews and Compton,
Justices.
MATTHEWS, Justice.
The Fairbanks North Star Borough Department of
Community Planning (Department) determined that Richard Wagner
possessed grandfather rights to extract gravel from a pit he
owned in the Borough. In this case, Earth Movers of Fairbanks,
Inc., (Earth Movers) appeals the superior court's holding that
Earth Movers did not have standing to challenge that
determination.
I. FACTUAL AND PROCEDURAL BACKGROUND
The property at issue is located a few miles north of
Fairbanks, off Farmers Loop Road. The property was used from
1962 to 1965 as a source of gravel for construction of Farmers
Loop Road. In 1965, the property was sold to the current owner,
Richard Wagner.
In October 1975, the property was rezoned from
Unrestricted Use to Rural Estate 2. Use of land as a gravel pit
is prohibited in a Rural Estate 2 zone. However, the 1975
rezoning granted grandfather rights for nonconforming uses which
were in existence at the time of the zoning changes.1 The
ordinance in effect at the time provided that nonconforming uses,
such as a gravel pit, could continue "provided any such
nonconforming use which is discontinued for a period of twelve
months may not be re-established." Fairbanks North Star Borough
Ordinance (FNSBO) 18.40.010 (1975).2
Wagner, after receiving notice in 1988 that the state
was upgrading Farmers Loop Road, inquired of the Borough whether
he could extract gravel from the property for the project. The
Department decided that Wagner had grandfather rights to use the
pit. Earth Movers objected to the Department's decision.3
Wagner filed a response, challenging Earth Movers' standing to
dispute the Department's decision.
Earth Movers' appeal was heard by the Borough Assembly,
sitting as a Board of Adjustment. The Board of Adjustment upheld
the decision of the Department,4 and found that Earth Movers had
no standing to challenge the previous decision. Earth Movers
appealed to the superior court, which held that Earth Movers had
no standing and dismissed the appeal. Earth Movers appeals.
II. DISCUSSION
A. Does Earth Movers Have Standing to Challenge the
Board's Decision?5
1. Applicable Zoning Statutes and Ordinances
In Alaska, "[t]he concept of standing has been inter
preted broadly." Trustees for Alaska v. State, 736 P.2d 324, 327
(Alaska 1987). "The basic requirement for standing in Alaska is
adversity." Id. (citing Moore v. State, 553 P.2d 8, 24 n.25
(Alaska 1976)). Thus, we have held that "[s]tanding questions
are limited to whether the litigant is a 'proper party to request
an adjudication of a particular issue.'" Moore, 553 P.2d at 24
n.25 (quoting Flast v. Cohen, 392 U.S. 83, 100-01 (1968)). Both
parties vigorously argue whether Earth Movers is a proper party
to challenge the Department's decision.
General Alaska standing law is not applicable in this
case. In the area of land use law, the legislature has chosen to
limit standing by statute. Therefore, we must look to the
applicable statutes and ordinance for guidance in determining
whether Earth Movers has standing.
The statutes and ordinance provide for two levels of
review, initially to a board and then to the superior court. At
level one, AS 29.40.050(a) provides in part:
Appeals from administrative
decisions. (a) By ordinance the assembly
shall provide for an appeal from an
administrative decision of a municipal
employee, board, or commission made in the
enforcement, administration, or application
of a land use regulation adopted under this
chapter. The assembly may provide for an
appeal to a court, hearing officer, board of
adjustment, or other body.
Pursuant to this statute, the Borough enacted an ordinance
providing:
Appeals. A. Initiation of Appeal.
Decisions may be appealed to the appeals
officer or the board of adjustment by:
. . . .
3. Any person adversely affected by
a decision or determination made by the
director of the department of community
planning in the enforcement of this ordinance
. . . .
FNSBO 18.54.070(A)(3) (1992)(emphasis added). Thus, in order to
appeal to the Board of Adjustment from the Department's
determination that Wagner had grandfather rights, Earth Movers
must be a party "adversely affected."
At level two, AS 29.40.060 provides:
Judicial review. (a) The assembly shall
provide by ordinance for an appeal by a
municipal officer or person aggrieved from a
decision of a hearing officer, board of
adjustment, or other body to the superior
court.
(Emphasis added.) In accordance with this statute, the Borough
ordinance provides:
F. Judicial Review. Either the
appellant or apellee [sic] may appeal the
decision of the appeals officer or the board
of adjustment to the superior court. Appeals
shall be made in accordance with the Alaska
Rules of Civil Procedure.
FNSBO 18.54.070(F). Reading the ordinance in conjunction with AS
29.40.060, in order to appeal the Board of Adjustment's determin
ation, Earth Movers must be a party "aggrieved." Thus, in the
area of zoning we are faced with apparently different standing
requirements at different levels of appeal: a party "adversely
affected"and a party "aggrieved."
We resolve this conflict by interpreting the phrase
"adversely affected"as used in the ordinance to mean the same as
the word "aggrieved"as used in the statute. We do so because of
the context of the statutes and ordinance -- zoning. "The zoning
enabling acts commonly authorize judicial review of decisions of
a board of adjustment at the instance of 'a person or persons
jointly or severally aggrieved' by the decision in question." 83
Am. Jur. 2d Zoning and Planning 1027 (1992). The legislature
chose to provide review for those "aggrieved,"indicating that it
follows the general practice of review in zoning cases.6
2. Is Earth Movers a "Person Aggrieved"?
In general, the requirement of "aggrievement"in zoning
cases is not considered to include the threat of potential
business competition.
The prevention of competition is
not a proper element of zoning. A person
whose sole interest for objecting to the
zoning board's action is to prevent
competition with his business is not a person
aggrieved. It is not the function of
ordinances to provide economic protection for
existing enterprises, and the fact that such
businesses may suffer reduced incomes or that
the property would depreciate in value will
not confer standing on these owners . . . .
83 Am. Jur. 2d Zoning and Planning 1034 (1992) (footnote omit
ted).7 In zoning cases, the vast majority of jurisdictions do
not allow standing solely on the basis of potential business
competition.8 Courts generally rely on two theories for holding
that potential business competition is not sufficient to confer
standing.
First, courts point out that competitors do not fall
within the "zone of interest"that zoning regulations protect.
The Supreme Judicial Court of Massachusetts discussed this
rationale extensively in Circle Lounge & Grille, Inc. v. Board of
Appeal, 86 N.E.2d 920 (Mass. 1949). The court noted that the
purpose of zoning was not to protect business from competition;
rather
[t]he primary purpose of zoning with
reference to land use is the preservation in
the public interest of certain neighborhoods
against uses which are believed to be
deleterious to such neighborhoods. . . . The
residence zone was designed to protect
residence against business. It was not
designed to protect business against
business.
Id. at 923. Under this rationale, proper parties to challenge
the Board's decision granting Wagner grandfather rights would
include the neighbors directly affected by the increased
commercial activity in their neighborhood or others whose
affected interests relate to the purpose of the zoning ordinance.
See also Swain v. County of Winnebago, 250 N.E.2d 439, 444 (Ill.
App. 1969) ("It is not the function of the county zoning
ordinances to provide economic protection for existing
businesses."); Sun-Brite Car Wash, Inc. v. Board of Zoning &
Appeals, 508 N.E.2d 130, 135 (N.Y. 1987) ("Zoning laws do not
exist to insure limited business competition.").
The second rationale courts use to support denying
business competitors standing is a "vested rights" argument.
Courts reason that "no person has a vested right to engage in
business without competition. . . . Never having been possessed
of a right to conduct a business free of competition, the
landowner has lost nothing and cannot be said to have been
aggrieved." 3 Arden H. Rathkopf & Daren A. Rathkopf, The Law of
Zoning and Planning 43.07, at 43-53 (1992). The Appellate
Court of Illinois noted that "[a] person can have no vested or
special property right in either the monopoly or competitive
advantage accorded by zoning restrictions at a given time."
Swain, 250 N.E.2d at 444.
We think both theories have merit. In the area of land
use law, we thus adopt the majority rule and deny standing to a
business competitor whose only alleged injury results from
competition.9 Earth Movers argues that "[n]o one other than
those with interests in lawfully operated gravel pits have
greater interests in preserving the laws of gravel pits than
those similarly situated to Earth Movers and Earth Movers
itself." In terms of Earth Movers' interest in limiting
competition in gravel sales, this may be correct. That interest
is, however, irrelevant because it is not an interest meant to be
protected by the zoning ordinance.
III. CONCLUSION
We interpret the applicable statutes and ordinance to
require that a person be "aggrieved" in order to appeal a
decision by a zoning board. We adopt the majority interpretation
of "aggrieved"to deny standing in land use cases to a business
competitor whose only alleged injury is potential increased
competition. Therefore we AFFIRM the decision of the superior
court which affirmed the decision of the Board of Adjustment
denying Earth Movers standing to challenge the Department's
holding.
_______________________________
1 A nonconforming use has been defined as a use
which lawfully existed prior to the enactment
of a zoning ordinance, and which is
maintained after the effective date of the
ordinance, although it does not comply with
the zoning restrictions applicable to the
area in which it is situated. Such a use has
also been described as a vested property
right that zoning ordinances generally may
not abrogate.
83 Am. Jur. 2d Zoning and Planning 624 (1992).
2 The ordinance was amended in 1988 to require that
grandfather rights were to be discontinued if the nonconforming
use ceased for thirty-six months, rather than twelve months.
FNSBO 18.56.030(B)(2).
3 Earth Movers claimed that, as the owner of gravel pit
rights within the Borough, it would be adversely affected by the
Department's mistaken allowance of Wagner's nonconforming use.
4 In order to maintain the gravel pit as a nonconforming
use, ordinances clearly required Wagner to have used the pit
commercially within the specified time frames. Earth Movers
argues strenuously, and the Borough concedes, that in affirming
the Department, the Board of Adjustment misinterpreted the law.
The Board of Adjustment issued a finding of fact stating "[t]he
Borough zoning code for the period 1975-1988 did not require
commercial [activity] . . . ." Although it is clear that the
Board of Adjustment was wrong in not requiring a showing of
commercial activity, the existence of the wrong does not in
itself give Earth Movers standing. Earth Movers must still show
that it has standing to challenge that incorrect finding.
5 Where the superior court acts as an intermediate appellate
court, this court owes no deference to its decision, but,
"[i]nstead . . . independently scrutinize[s] directly the merits
of the administrative determination." Tesoro Alaska Petroleum
Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903 (Alaska 1987). In
order to determine if Earth Movers has standing, we must
interpret the applicable statutes and ordinance. Thus we address
questions of law, and the appropriate standard of review is de
novo. Langdon v. Champion, 745 P.2d 1371, 1372 n.2 (Alaska
1987).
6 In general, standing in zoning cases has been more
restrictive than general standing principles, primarily in order
to prevent excessive litigation and undue delay of final
dispositions. 83 Am. Jur. 2d Zoning and Planning 1026 (1992).
As one court noted,
[a]llowing the threat of increased
competition to confer standing could open a
new and inappropriate battleground for
business competition: the planning and
zoning boards of each municipality in the
State. This battleground would unduly tax
the resources of our municipalities as well
as impair our commitment to a free enterprise
system.
Paramus Multiplex Corp. v. Hartz Mountain Indus., Inc., 564 A.2d
146, 149 (N.J. Super. 1987).
7 See also 101A C.J.S. Zoning & Land Planning 267(b)
(1979) ("Generally, a person is not 'aggrieved' merely because
the permit, variance, exception, or rezoning will increase
competition in the business of the party seeking review . . .
."); 3 Arden H. Rathkopf & Daren A. Rathkopf, The Law of Zoning
and Planning 43.07, at 43-53 (1992) ("'Aggrievement' sufficient
to confer standing to challenge rezoning, or the grant of a
variance, or a special permit, has traditionally been denied
where its basis has been that the business competition which
would result from the zoning action complained of would adversely
affect the interests of the complainant.").
8 See Gregorio v. Zoning Bd. of Appeals, 232 A.2d 330, 333
(Conn. 1967) ("The fact that the proposed gasoline station would
result in competition harmful to the plaintiff's business would
not be sufficient to qualify the plaintiff as an aggrieved
person."); Swain v. County of Winnebago, 250 N.E.2d 439, 444
(Ill. App. 1969) ("Neither the fact that parties may suffer
reduced incomes or be put out of business by more vigorous or
appealing competition . . . give rise to a standing to sue.");
Lucky Stores, Inc. v. Board of Appeals, 312 A.2d 758, 766 (Md.
1973) ("[A] person whose sole interest for objecting to the
Zoning Board's action is to prevent competition with his
established business is not a person aggrieved."); Circle Lounge
& Grille, Inc. v. Board of Appeal, 86 N.E.2d 920, 922 (Mass.
1949) ("We cannot believe that a person is aggrieved . . . merely
because a variance, even if improvidently granted, will increase
competition in business."); Redstone v. Board of Appeals, 416
N.E.2d 543, 544 (Mass. App. 1981) ("A party is not, however,
aggrieved . . . because the zoning relief granted may result in
business competition."); Copple v. City of Lincoln, 315 N.W.2d
628, 630 (Neb. 1982) ("An increase in business competition is not
sufficient to confer standing to challenge a change of zone.");
Paramus Multiplex Corp. v. Hartz Mountain Indus., Inc., 564 A.2d
146, 148 (N.J. Super 1987) ("This court holds that increased
competition does not . . . of itself confer standing."); Sun-
Brite Car Wash, Inc. v. Board of Zoning & Appeals, 508 N.E.2d
130, 134 (N.Y. 1987) ("Sun-Brite lacks standing to seek judicial
review because . . . its only substantiated objection was the
threat of increased business competition, which is not an
interest protected by the zoning laws.").
9 Of course, a business competitor who can show other
injury, such as a deleterious effect on traffic patterns,
parking, etc., should not be denied standing simply because he is
also a competitor.
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