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R&Y Inc. et al v Municipality of Anchorage (09/07/2001) sp-5466
R&Y Inc. et al v Municipality of Anchorage (09/07/2001) sp-5466
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
R & Y, INC., and JOSEF RESSEL,)
) Supreme Court Nos. S-9315/9435
Appellants/ )
Cross-Appellees. ) Superior Court No.
) 3AN-93-2634 CI
v. )
) O P I N I O N
MUNICIPALITY OF ANCHORAGE, )
) [No. 5466 - September 7, 2001]
Appellee/ )
Cross-Appellant. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Sen K. Tan, Judge.
Appearances: Lawrence V. Albert, Anchorage,
for Appellants/Cross-Appellees. Steven S. Tervooren, Hughes
Thorsness Powell Huddleston & Bauman, LLC, Anchorage, for
Appellee/Cross-Appellant.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
Article I, section 18 of the Alaska Constitution provides
that "[p]rivate property shall not be taken or damaged for public
use without just compensation." Did the Municipality of Anchorage
(MOA) "take"or "damage"property near Blueberry Lake in protected
wetlands when it restricted development in a twenty-foot-wide
setback band that began eighty feet from the lake's shoreline,
decreasing the value of four of the landowners' lots? When the
landowners sued the MOA claiming inverse condemnation, the trial
court applied the relevant factors and held that there was no
"taking." We affirm because we conclude that the legitimacy of the
MOA's interest in restricting development in wetlands outweighs the
relatively minor impact its action had on the value of the land.
In its cross-appeal, the MOA claims that because it was
the prevailing party, it was entitled to an award of attorney's
fees and costs. We conclude that when a landowner does not prevail
on an inverse condemnation claim, costs and fees awards are
controlled by Alaska Civil Rules 79 and 82, and not Alaska Civil
Rule 72(k). We therefore remand for consideration of the MOA's
requests for attorney's fees and costs.
II. FACTS AND PROCEEDINGS
In August 1970 Josef Ressel and Edward Young purchased
approximately forty acres of undeveloped land in Anchorage for
$110,000. [Fn. 1] They purchased the land for future development.
It contained swampland and a shallow lake called Blueberry Lake.
The only regulations then applicable to the land were the Greater
Anchorage Area Borough's interim subdivision regulations and zoning
ordinances. They zoned this property "'U' -- Unrestricted
District." Owners of land zoned "U"could develop swampland and
drain water bodies on their property. The "U"classification
allowed the land to be put to any use that was not noxious,
injurious, or hazardous. Prior to 1970 purchasers of swampland in
Anchorage had drained and filled their property without any legal
restrictions. When they purchased the property near Blueberry
Lake, these landowners expected to be able to develop their land in
part by draining and filling Blueberry Lake and surrounding
swamplands.
In 1972 Congress passed the Federal Water Pollution
Control Act, or Clean Water Act (CWA). [Fn. 2] Under sec. 404(a)
of
the CWA, dredging or filling wetlands requires a permit from the
United States Army Corps of Engineers. [Fn. 3] In 1978 the MOA
began implementing a coastal management plan; in 1982 it adopted
the Anchorage Wetlands Management Plan (AWMP). [Fn. 4] One
objective of the AWMP was to simplify the regulation of wetlands.
The AWMP classified wetlands as "developable,""conservation,"or
"preservation." The MOA could issue dredge and fill permits for
wetlands classified as "developable." But the Corps retained
exclusive permitting authority with respect to "preservation"
wetlands. The AWMP also designated a 100-foot setback around
Blueberry Lake.
The disputed land was part of an area known as Conner's
Bog, designated under the AWMP as "preservation,"with particular
sub-areas designated as "developable."
The State of Alaska took about thirteen of the forty
acres in 1979 for a highway project in exchange for compensation of
about $808,000. The landowners sought to subdivide their remaining
twenty-seven acres.
Following enactment of the AWMP in 1982, the landowners
revised their subdivision design to avoid disturbing Blueberry Lake
or the 100-foot setback area designated in the AWMP. Their final
plat map replaced two lots and associated street access with an
area of equivalent size known as Tract B. The landowners intended
Tract B to encompass all of the "preservation"wetlands surrounding
Blueberry Lake. Essentially all of Blueberry Lake and the
"preservation"wetlands are located within Tract B. The final
subdivision thus consisted of Tract A, Tract B, and Lots 1 through
7. The MOA approved the final subdivision plat in May 1983; that
plat was recorded on May 12, 1983. Referring to Blueberry Lake, a
note on the plat stated that "[n]o structures or fills shall be
placed within 65' of the lake located within Tract B."[Fn. 5]
With the "preservation"designation in effect, the
landowners could develop Tract B only if the Corps of Engineers
issued them a permit allowing them to do so. In August 1985 the
landowners applied to the Corps for a sec. 404 permit to fill
Blueberry Lake. The Corps denied the application after the State
of Alaska, the MOA, and federal agencies objected.
During the subdivision process in 1984-85, the landowners
cleared a drainage ditch and placed fill on Lots 4 and 7, near
Tract B. The landowners thought the fill occurred outside the
sixty-five-foot setback line and obtained no sec. 404 permit. The
United States Environmental Protection Agency (EPA) determined that
the fill activity was unauthorized, issued two compliance orders,
and demanded site restoration. Unsatisfied by the landowners'
response, the EPA filed a federal enforcement action in 1988 and
sought injunctive relief and civil penalties. In 1991 the United
States District Court for the District of Alaska entered a
stipulation and consent decree establishing that the appropriate
boundary for federal purposes was an eighty-foot-setback from
Blueberry Lake. In drafting the consent decree, the Justice
Department reasoned that the Corps' general permit required a
fifteen-foot buffer from the "preservation"wetlands. Because the
setback for the "preservation"wetlands was sixty-five feet and the
buffer zone was fifteen-feet wide, the federal consent decree
effectively precluded construction within eighty feet of the lake's
shoreline, rather than the subdivision plat's sixty-five-foot
setback.
In 1990, under authority of the Corps' general permit,
the MOA issued the landowners an MOA permit that allowed them to
fill Lots 5 and 6 and precluded placing fill within 100 feet of the
Blueberry Lake shoreline. In 1991 the landowners obtained a
separate permit from the MOA to fill portions of Tract A. This
permit also precluded fill within 100 feet of the shoreline of the
lake. These setback requirements exceeded both the sixty-five-foot
setback described in the 1983 subdivision plat and the eighty-foot
setback required by the 1991 federal consent decree. Because the
MOA's 100-foot setback requirement extended twenty feet beyond the
federal consent decree's eighty-foot restriction, and thus created
an additional no-fill area twenty feet wide, we will sometimes
refer to this area as the "twenty-foot-wide setback band." It is
this band which is at the heart of this appeal.
MOA and Corps regulations have prevented the development
of Tract B. The landowners have also been prohibited from
developing lands within the setbacks imposed variously by the MOA's
subdivision approval, the EPA consent decree, and the MOA's
subsequent permitting under the Corps' general permit. According
to land appraisers whose opinions were admitted as evidence at
trial, the economic loss to the landowners as of May 1983, when the
subdivision was approved, was $483,800, assuming a sixty-five-foot
setback and a complete prohibition on use of Tract B. The loss was
$563,200, assuming a 100-foot setback and a complete prohibition on
use of Tract B. [Fn. 6]
The landowners filed an inverse condemnation action
against the MOA in 1993. They alleged that the MOA's 1983
subdivision approval resulted in a taking of both Tract B and the
setback area affecting Lots 4 through 7. The MOA's answer denied
any taking. Superior Court Judge Sen K. Tan conducted a bench
trial and issued a memorandum decision holding that there had been
no taking. As part of its analysis, the trial court estimated the
economic impact attributable to MOA action in requiring the twenty-
foot-wide setback band to be between 1.5% and 2% of the value of
the property. The landowners unsuccessfully moved for
reconsideration. The superior court entered final judgment in
September 1999. The MOA sought awards of attorney's fees and
litigation costs, but the trial court denied its requests.
The landowners appeal, arguing that there was a
compensable taking and that the MOA is liable for their loss
attributable to the twenty-foot-wide setback band. The MOA cross-
appeals the denial of its requests for litigation costs and
attorney's fees.
III. DISCUSSION
A. Was the MOA's Restriction on Development in the Twenty-
Foot-Wide Setback Band a Compensable "Taking"?
1. Standard of review
We apply our independent judgment in reviewing
conclusions of law such as the trial court's conclusion that the
MOA's imposition of a setback band was not a compensable taking
under the United States Constitution and the Alaska Constitution.
[Fn. 7] We review de novo questions of constitutional law, [Fn. 8]
and adopt the rule of law that is most persuasive in light of
precedent, reason, and policy. [Fn. 9] We review the trial court's
fact determinations, including the weight it gives to particular
factors in the regulatory takings analysis, for clear error. [Fn.
10]
2. Regulatory takings analysis
Article I, section 18 of the Alaska Constitution provides
that "[p]rivate property shall not be taken or damaged for public
use without just compensation." Property owners enjoy broader
protection under the Alaska Constitution than under the Fifth
Amendment of the United States Constitution. [Fn. 11]
Under both constitutions, if there has been no per se
taking -- either through physical invasion of land or regulation
that has deprived the landowner of all economically valuable use of
the land -- case-specific analysis is necessary to determine
whether a compensable taking has occurred. [Fn. 12] Alaska courts
engaging in this case-specific analysis consider four factors: (1)
the character of the governmental action; (2) its economic impact;
(3) its interference with reasonable investment-backed
expectations; and (4) the legitimacy of the interest advanced by
the regulation or land-use decision. [Fn. 13] These are known as
the Sandberg factors. [Fn. 14]
3. Applying the factors
The trial court considered the landowners' claim that
there were two categories of "takings": (1) the loss of use of
Tract B, and (2) the partial loss of use of Lots 4, 5, 6, and 7 due
to the setback requirement. The trial court analyzed both
categories in light of the four Sandberg factors.
Although the landowners asserted in the trial court that
the MOA took a much larger part of their property, in their
appellate reply brief and at oral argument before us, their
attorney made it clear that their appeal concerns only the twenty-
foot-wide setback band beginning eighty feet from the shoreline of
Blueberry Lake and extending to 100 feet. We therefore need not
consider whether the MOA prevented the landowners from developing
Tract B, and we limit our attention to the effect of the twenty-
foot-wide setback band on Lots 4 through 7.
The landowners argue that the trial court incorrectly
applied the four Sandberg factors. They claim that, as a matter of
law, the court erred by de-emphasizing the reasonable investment-
backed expectations and economic impact factors and overemphasizing
the fact that the MOA setbacks caused only minor economic loss.
They contend that a compensable taking has occurred whenever there
is interference with reasonable investment-backed expectations or
damage to property, regardless of how "minor"the economic damage.
We reject this contention because it is contrary to the
settled law of the United States and the State of Alaska. And we
conclude that the trial court did not err in applying the Sandberg
factors.
a. Character of the MOA's action
Concerning the character-of-governmental-action factor,
the trial court concluded that the MOA's decisions affected the
subdivision both indirectly and directly. By designating Blueberry
Lake a "preservation"wetland and leaving it to the Corps to
determine whether a sec. 404 permit was appropriate, the MOA's
decisions had an indirect impact. By imposing a sixty-five-foot
setback, the MOA directly affected the land. The trial court also
reasoned that the Corps, by denying the 1985 sec. 404 permit
application to drain and fill the lake, affected both Tract B and
the four lots: "[i]f the Corps had granted [the] sec. 404
application,
there would be no lake and no setback requirements." It further
found that there was federal intervention, leading to the federal
consent decree and the eighty-foot setback. It concluded that the
MOA's conduct regarding the land was "mostly indirect." The trial
court did not separately consider the character of the MOA's
imposition of the additional twenty-foot-wide setback band.
b. Economic impact of the MOA action
Concerning the economic impact factor, the trial court
concluded that "opportunity for development has been lost to Tract
B of the property and the designated setback areas on Lots 4 to 7."
It found that "the lion's share of the economic impact"on the
subdivision was due to the Corps' denial of the sec. 404 permit
application. [Fn. 15]
On appeal, the landowners argue that the pertinent
economic impact is that caused by the twenty-foot-wide setback
band. Therefore, the relevant diminution in value must be measured
by the loss attributable to the MOA's requirement for the setback
band that begins eighty feet from the shoreline and extends to 100
feet. That loss must be compared to the value of the entire
subdivision, Tract A, Tract B, and Lots 1 through 7. [Fn. 16]
The trial court estimated that the twenty-foot-wide
setback band diminished the value of the relevant property by 1.5%
to 2%. The court did not explain how it calculated this estimate.
But there was ample evidence before the trial court to support this
estimate. We also conclude that the loss in value, however
calculated, was small enough to support the trial court's
conclusion that the MOA's actions did not amount to a compensable
regulatory taking.
Although the trial evidence regarding the financial
effect of requiring the additional twenty-foot-wide band is
obscure, the evidence permits relatively precise calculation of the
incremental impact caused by extending the sixty-five-foot setback
to 100 feet. Relying upon King's expert testimony, the trial court
reasoned:
[W]ith a curved 65 foot setback, the value
before governmental action is $2,958,900 and the value of the land
after governmental action is $2,475,100, a resultant loss in value
of $483,800 or 16.35%. Of the loss in value of $483,800, $392,000
or 13.23% is attributable to Tract B, with the remaining $91,800 or
3.2% attributable to the [sixty-five-foot] setback requirement.
(Emphasis added.) As the trial court recognized, "the experts did
not testify regarding the economic impact of a 80 foot setback."
But by using the appraisal the court found to be more accurate, the
trial court could easily calculate the impact of extending the
sixty-five-foot setback by thirty-five feet. That appraisal,
prepared by the landowners' expert, found that a 100-foot setback
would reduce the value of the land to $2,395,700, a loss in value
of $563,200. Again subtracting the $392,000 loss in value for
Tract B, the loss in value for Lots 4 through 7 attributable to the
100-foot setback is $171,200, or 5.79% of the total value of the
subdivision. By subtracting the loss attributable to the sixty-
five-foot setback from the loss attributable to the 100-foot
setback, the incremental loss in value caused by extending the
sixty-five foot setback to 100 feet can be calculated. It is
$79,400 ($171,200 - $91,800); that is 2.68% of the total value of
the subdivision property.
The trial court recognized that the evidence did not
permit a direct calculation of the impact of the last twenty feet
of that thirty-five-foot-wide band, i.e., the twenty-foot-wide
setback band lying between the federal consent decree's eighty-foot
setback and 100 feet. But the trial court probably estimated the
impact of the twenty-foot-wide setback band by somehow prorating
the loss in value caused by the entire thirty-five-foot-wide band.
The trial court's estimate -- that the impact was "in the range of
1.5% to 2% of the value of the property"-- is consistent with a
prorational estimate. Given its findings about the impacts caused
by the sixty-five and 100-foot setbacks, and the evidence that the
entire thirty-five-foot band increased the impact by about 2.68% of
the value of the relevant property, the trial court may have
multiplied the latter percentage by 20/35 to estimate what part of
the loss in value was attributable to the setback band that formed
the last twenty feet of the thirty-five-foot band. The result
would have been about 1.5%, a figure within the 1.5% and 2.0% range
the trial court mentioned in footnote 9 of its opinion. [Fn. 17]
Further, footnote 23 of the landowners' opening brief
estimates a loss in value that confirms that the economic impact of
the additional twenty-foot setback is very small relative to the
value of the property. [Fn. 18] Their estimate is consequently
consistent with the estimate derived by the trial court. Likewise,
the loss in value of Lots 4 through 7 caused by the entire thirty-
five-foot band lying between sixty-five and 100 feet was about
2.68% of the subdivision property. This figure was itself so small
that it would support the trial court's balancing analysis.
We conclude that there was ample support for the trial
court's estimate of the economic impact of the twenty-foot-wide
setback band.
c. The landowners' expectations
The trial court found that "the Owners' expectations were
reasonable and investment backed." This finding was favorable to
the landowners. The MOA has not challenged this finding on appeal,
and we accept it for purposes of reviewing the trial court's
analysis of the Sandberg factors.
d. Legitimacy of the MOA's interest
The trial court found that the MOA has a "legitimate
interest in [its] land use decisions":
The land use decisions here have to do
with the protection of wetlands. The passage of the CWA as well as
of the state ACMP and the municipal AWMP all speak to the
legitimacy of the governmental action.
There has certainly been a diminution of
the total acreage of wetlands in the Anchorage area since the
1950's and because such wetlands are a valuable resource in and by
themselves, the MOA has a legitimate interest in such land use
decisions.
The landowners do not challenge this finding. We therefore accept
this finding for purposes of this appeal.
But given the importance of this factor to the trial
court's analysis, we also note that no plausible argument could be
made that the MOA has no legitimate interest in land-use decisions
concerning wetlands.
e. Weighing the factors
Finally, the trial court concluded that "the factors must
be weighed to decide whether a 'taking' has occurred." It reasoned
that, "[s]ince the actual extent of the impact of the MOA's
decisions is 'so unclear, the severity of the economic impact and
the reasonableness of [the landowners'] expectations concerning
development plans must weigh heavily in [the landowners'] favor.'"
[Fn. 19] The trial court found that the MOA setback requirement
caused economic loss to the landowners' property. But, in
balancing the Sandberg factors, the trial court found that no
compensable taking or damage had occurred:
On balance . . . factors two and three do not
weigh heavily enough to tip the scales in favor of the Owners. In
this case, Owners were able to realize most of their investment
backed expectations and have done so through the sale of
Subdivision property. The reduction in value, although significant
in terms of actual dollars, represents a small percentage when
viewed in the context of the entire property. Lastly, I find that
the land-use decisions here [serve] a legitimate purpose.
Therefore I find that private property has not been damaged or
taken in this case.
The landowners would find a compensable taking whenever
the government interferes with reasonable investment-backed
expectations, or damage to property has occurred, even if the
economic damage is "minor." But that rule would be inconsistent
with established takings doctrine and the economic policies
underlying that doctrine. The takings doctrine of this court and
the United States Supreme Court clearly holds that, where there has
been no physical invasion of property, a per se taking will not be
found except upon a showing that all economic value of a particular
piece of property has been destroyed. [Fn. 20] The landowners also
suggest that a de facto taking can be established without full
consideration of the Sandberg factors when a government's action
has damaged private property even when the damage has not destroyed
all economic value of the land. This proposed rule offends
established takings doctrine, which, outside a narrow set of
circumstances resulting in per se takings, requires courts to
engage in case-specific analysis guided by the Sandberg factors.
We decline to adopt the landowners' alternative legal rule.
Rather, we agree with the trial court that even under the
more far-reaching terms of the Alaska Constitution, the MOA's
regulatory action did not amount to a compensable taking of the
landowners' property.
Alaska case law does not elaborate on how the Sandberg
factors are to be weighed against each other. But it is helpful to
consider the policies that animate the federal doctrine from which
the Sandberg factors were adopted. [Fn. 21] At one end of the
spectrum, the cases recognize limits on the rightful uses to which
owners may put their private property. "Long ago it was recognized
that 'all property in this country is held under the implied
obligation that the owner's use of it shall not be injurious to the
community.'"[Fn. 22] Furthermore, the doctrine recognizes that in
order to protect the public welfare, governments may exercise their
police powers, occasionally impairing the use and value of private
property. [Fn. 23] This policy is present in the law of the states
as well. [Fn. 24]
Nevertheless, courts also recognize limits on the
exercise of police powers that encroach on property rights.
"[T]here is no dispute about the proposition that a regulation
which 'goes too far' must be deemed a taking."[Fn. 25] Thus,
regulatory takings doctrine requires courts to reconcile these
policies. The reconciling principle employed in the federal
doctrine focuses on whether the challenged regulatory action
unfairly allocates the burden of preserving the public welfare to
a particular landowner. "The determination that governmental action
constitutes a taking is, in essence, a determination that the
public at large, rather than a single owner, must bear the burden
of an exercise of state power in the public interest."[Fn. 26]
Although no precise rule determines when property has
been taken, [Fn. 27] the question necessarily requires a weighing
of private and public interests. [Fn. 28] Professor Robert
Ellickson explains the policy underlying the doctrine: "[t]akings
clauses largely aim to prevent horizontal inequity stemming from a
government's decision to impose a heavy burden on a few citizens
instead of spreading that burden through the tax system."[Fn. 29]
Professor Ellickson suggests that any land use activity can be
appraised in terms of its relative desirability to neighbors. [Fn.
30] He notes that government land-use regulations that restrict
neighborly activity (activity that does not impose externalities
that are worse than normal, like commercial development in a
commercial development zone) are most likely to trigger
compensation under takings clauses. [Fn. 31] Still, the government
should be entitled to attempt to prove a defense that, in the long
run, a practice of compensating in instances of this sort would not
be in the interest of claimants in general, such as when the social
desirability of the regulation is unquestionably strong or the
transaction costs of rendering payment would be severe. For
example, Professor Ellickson explains that the government defense
should succeed in justifying a non-compensable prohibition on the
neighborly activity of growing wheat when the prohibition is
applied to a wide set of landowners to produce a significant social
benefit, i.e., when a state enacts a statewide ban on wheat farming
to allow nature to remedy the effects of the previous year's dust
bowl.
The landowners in the present case could make a prima
facie showing of a taking under Professor Ellickson's scheme
because they have suffered economic loss due to a government
regulation that prevents them from engaging in normal land use
activities (commercial development in a commercial district).
However, the MOA's setback restriction should not trigger
compensation because it is part of a city-wide (indeed, nationwide)
wetlands preservation scheme which applies broadly to all
landowners and which benefits both the public generally and the
landowners in particular. Scientists and legislators have
recognized the unique ecological and economic value that wetlands
provide in protecting water quality, regulating local hydrology,
preventing flooding, and preventing erosion. In preserving the
valuable functions of wetlands, regulations like those of the MOA
provide ecological and economic value to the landowners whose
surrounding commercially-developed land is directly and especially
benefitted by the functioning of Blueberry Lake.
The seminal decision of Agins v. City of Tiburon is also
illustrative. In Agins, the United States Supreme Court affirmed
the California Supreme Court's judgment that a city's open-space
land zoning ordinances, which restricted a previously purchased
five-acre tract of land to single-family residences and open-space
use, did not take the property without just compensation, where the
zoning benefitted the landowners as well as the public by assuring
careful and orderly development. The Agins Court found it
significant that "[t]here [was] no indication that the appellants'
5-acre tract [was] the only property affected by the ordinances,"
and that the landowners "therefore [would] share with other owners
the benefits and burdens of the city's exercise of its police
power."
Federal courts have rejected the landowners' "any
economic loss is compensable"position in favor of the more nuanced
Agins-type reasoning. These decisions aspire ultimately to
allocate economic burdens and benefits fairly and will find an
allocation fair when the disputed regulation: (1) applies broadly
to many landowners; (2) directly benefits those that it burdens;
and (3) permits burdened landowners to engage in viable alternative
economic uses of their land.
The Federal Circuit Court of Appeals employs a
"reciprocity of advantage"test to determine when government
regulations that reduce but do not entirely eliminate the economic
value of land have gone too far and ought to be compensable. This
test is consistent with the Agins reasoning and Professor
Ellickson's expository scheme. The Federal Circuit has explained:
When there is reciprocity of advantage,
paradigmatically in a zoning case, then the claim that the
Government has taken private property has little force: the
claimant has in a sense been compensated by the public program
"adjusting the benefits and burdens of economic life to promote the
common good."[]
In determining whether a challenged government action produces a
reciprocity of advantage and therefore ought not trigger
compensation, the Federal Circuit instructs trial courts to
consider whether there are "direct compensating benefits accruing
to the property, and others similarly situated, flowing from the
regulatory environment"or whether the "benefits, if any, [are]
general and widely shared through the community and the society,
while the costs are focused on a few." In addition, trial courts
may consider whether there are "alternative permitted activities
economically . . . realistically available." When government
regulations permit such alternative economic uses, courts have
consistently held that no compensation shall be due.
The landowners also appear to argue here that the trial
court erred in determining that, because the MOA's interest in
wetlands regulation is legitimate, no taking could be found. But
this was not the trial court's reasoning. The landowners have not
shown that the trial court gave inadequate weight to the
investment-backed expectations and economic impact factors. The
trial court expressly made findings regarding these factors and
explained that, because the economic loss was so minor, these
factors did not weigh heavily enough to overcome the MOA's
legitimate interest in wetlands preservation. The trial court
correctly applied the law, and its finding of minor economic impact
was both reasonable and supported by expert testimony establishing
the value of the setback bands.
The crux of the landowners' complaint remains their view
that every economic loss due to government regulation must be
compensated, no matter how minor the loss. As we have seen, this
is not the law. While some minor economic losses may indeed be
compensable under our takings doctrine, not every such loss is
compensable. A case-specific analysis, guided by the Sandberg
factors and the underlying economic principle of equitable
distribution of public burden and benefit, determines which losses
are compensable. The trial court's decision is consistent with
takings doctrine and its underlying principles. They recognize
broad governmental authority to regulate in the public interest
when that regulation does not unfairly allocate the burden of the
public welfare to a particular private party. Here, as in Agins,
the landowners were not singled out and made to suffer unduly
burdensome economic loss. Instead, they incurred only relatively
minor economic loss due to generally applicable wetlands
restrictions which govern all land use in Anchorage and benefit all
landowners, including these landowners, by preserving the
ecologically and economically valuable functions of wetlands.
The trial court took a rational and well-reasoned
approach to this case. It appropriately considered the Sandberg
factors and made reasonable findings regarding the value of the
property actually in dispute. We conclude that its decision that
there was no taking is supported by the evidence.
The landowners moved in June 2001 for leave to file
memoranda addressing the United States Supreme Court's recent
opinions in Solid Waste Agency of Northern Cook County v. United
States Army Corps of Engineers and Palazzolo v. Rhode Island, and
for leave to file a motion to stay the appeal pending a possible
application by the landowners to the Corps of Engineers for some
unspecified relief from restrictions on developing the wetlands.
We denied the motion to stay because the question here is whether
the MOA's past actions in imposing the twenty-foot-wide setback
band entitle the landowners to compensation. The Supreme Court's
opinions do not affect our resolution of that question. We express
no opinion about the effect of any prospective decisions by the
Corps of Engineers or future acts of the MOA with respect to this
property. As to the narrow question before us here, we simply hold
that the past acts of the MOA with respect to the twenty-foot-wide
band have not resulted in a compensable taking.
f. Other issues
The landowners raise several other issues. They assert
that we should follow a rule of joint and several liability where
several governments regulate land use, causing loss. They also
assert that it was error to permit the MOA to amend its defenses at
trial to assert that these wetlands were subject to joint
governmental action. Because the landowners now limit their claim
to "the last twenty feet of setback,"these issues are moot.
IV. MOA'S CROSS-APPEAL
A. Standard of Review
We review the interpretation of Alaska Civil Rules
governing the award of costs and attorney's fees de novo, and will
adopt the rule of law that is most persuasive in light of
precedent, reason, and policy.
B. The MOA's Requests for Attorney's Fees and Costs
After the court granted complete summary judgment to the
MOA, the MOA requested an award of costs under Alaska Civil Rule 79
and an award of attorney's fees under Civil Rule 82. Reasoning
that Alaska Civil Rule 72 governed inverse condemnation
proceedings, the trial court denied both applications.
The MOA argues that Rule 72 supersedes Rules 79 and 82
only when the condemnor initiates condemnation actions, but does
not prohibit the MOA from recovering costs and attorney's fees when
a landowner asserts an unsuccessful inverse condemnation claim.
Rules 79 and 82, respectively, provide that costs and
attorney's fees shall be awarded to the prevailing party in a civil
case, except as otherwise provided by law. Rule 72 creates a
narrow exception in those cases involving "the condemnation of
property under the power of eminent domain . . . ." It permits an
award of attorney's fees to landowners who are named as defendants
in eminent domain actions initiated by the government, based upon
the constitutional requirement of just compensation, where a taking
of private property has occurred. We have not applied Rule 72 in
an action initiated by a landowner in which it is determined that
there has been no inverse condemnation or taking.
Cases cited by the MOA demonstrate that this court has
been willing to award attorney's fees when no taking has been
found. In Stewart v. State, Department of Transportation & Public
Facilities, we explained: "[t]he mere fact that a party brings an
inverse condemnation action does not mean that there has been a
taking. If a court dismissed an inverse condemnation complaint
because there was no taking, the purported condemnor would be
entitled to attorney's fees."
We followed a similar approach in Weidner v. State,
Department of Transportation & Public Facilities, where the trial
court found no taking and awarded the state its costs and
attorney's fees. We affirmed in all respects, although the
landowner there did not argue on appeal that Rule 72(k) controlled.
We conclude that because the landowners asserted an
unsuccessful inverse condemnation claim, Rule 72 does not supersede
Rules 79 and 82 and that those rules permit the MOA to recover
costs and attorney's fees here. As the prevailing party, the MOA
is entitled to recover partial fees under Rule 82 and costs under
Rule 79.
V. CONCLUSION
We AFFIRM the judgment because we hold that the MOA's
actions did not effect a compensable taking, but we REVERSE the
denial of the MOA's request for costs and motion for attorney's
fees and REMAND for further proceedings in accord with this
opinion.
FOOTNOTES
Footnote 1:
Ressel and Young later formed R & Y, Inc. to hold title to
various assets. The corporation issued shares to Ressel and Young.
Young sold his shares to William Watterson and Mark Graber.
Most of the other facts discussed in this part, including
those concerning the purchase of this land, past zoning
requirements, past development practices in Anchorage, the adoption
of land use standards, and these landowners' expectations, were set
out in an extensive pretrial stipulation.
Footnote 2:
Pub. L. No. 92-500, 86 Stat. 816 (codified at 33 U.S.C. sec.
1251, et seq. (1972)).
Footnote 3:
Section 404 is codified at 33 U.S.C. sec. 1344 (1986).
Section
404(a) provides that "[t]he Secretary may issue permits, after
notice and opportunity for public hearings for the discharge of
dredged or fill material into the navigable waters at specific
disposal sites."
Footnote 4:
Incorporated in 1975, the Municipality of Anchorage subsumed
the City of Anchorage and the Greater Anchorage Area Borough. See
Anchorage Municipal Charter sec.sec. 1.02, 19.02(a).
Footnote 5:
The plat note also states that "Tract B shall be reserved for
15 months from the date of recording for purchase or acquisition by
the Municipality in accordance with Section 21.80.135 of the
Anchorage Municipal Code."
Footnote 6:
These loss calculations were based on the May 1983 values of
all subdivision lots before and after regulation.
Footnote 7:
See Smith v. Ingersoll-Rand Co., 14 P.3d 990, 992 (Alaska
2000); see also Zerbetz v. Municipality of Anchorage, 856 P.2d 777,
778 (Alaska 1993) (affirming trial court's grant of summary
judgment for municipality and holding that municipality's
designation of property as "conservation wetlands"was not
compensable taking).
Footnote 8:
See Municipality of Anchorage v. Sandberg, 861 P.2d 554, 557
(Alaska 1993) (reversing grant of summary judgment for landowner
and holding that municipality's purchase of park land in area of
landowner's development, assembly votes against water and sewage
districts, and decision not to participate in road improvement
district did not constitute "taking").
Footnote 9:
See State, Dep't of Revenue, Child Support Enforcement Div. v.
Beans, 965 P.2d 725, 730 (Alaska 1998).
Footnote 10:
See State v. Alex, 646 P.2d 203, 214 (Alaska 1982); Osness v.
Dimond Estates, Inc., 615 P.2d 605, 610 (Alaska 1980); see also
Alaska R. Civ. P. 52(a).
Footnote 11:
See Ehrlander v. State, Dep't of Transp. & Pub. Facilities,
797 P.2d 629, 633 (Alaska 1990) ("[Article I, section 18 of the
Alaska Constitution] is to be interpreted liberally in favor of the
property owner. The inclusion of the term 'damage' affords the
property owner broader protection than that conferred by the Fifth
Amendment to the Federal Constitution.") (citing State v. Doyle,
735 P.2d 733 (Alaska 1987)). The Fifth Amendment to the United
States Constitution provides in part: "nor shall private property
be taken for public use, without just compensation."
Footnote 12:
See Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104,
124 (1978) (explaining that in determining whether government
regulations go too far for purposes of Fifth Amendment, courts must
"engag[e] in . . . essentially ad hoc, factual inquiries"); [Fn.
32]Sandberg, 861 P.2d at 557 (citing Lucas v. South Carolina
Coastal Council, 505 U.S. 1003 (1992)). See also Palazzolo v.
Rhode Island, 533 U.S. ___, 121 S. Ct. 2448 (2001) (affirming state
court rejection of Lucas takings claim where state regulated
wetlands but did not deprive owner of all economic use of his
property, and remanding for consideration of owner's claims under
Penn Central analysis).
Footnote 13:
See Sandberg, 861 P.2d at 557; see also Beluga Mining Co. v.
State, Dep't of Natural Resources, 973 P.2d 570, 575 (Alaska 1999)
(citations omitted); Cannone v. Noey, 867 P.2d 797, 800 (Alaska
1994) (citations omitted).
Footnote 14:
Sandberg, 861 P.2d at 557.
Footnote 15:
The landowners' expert, Franklin King of the Accuval-Resco
Appraisal Company, Inc., opined that the original sixty-five- foot
restriction reduced the market value of Tract B to $0. That
necessarily means that any further restriction by the MOA caused no
additional diminution in the value of Tract B.
Footnote 16:
The parties stipulated at trial that the parcel of land
"relevant"to the takings inquiry encompassed Tract A, Tract B, and
Lots 1 through 7.
Footnote 17:
The trial court may have applied some more sophisticated
method to estimate the impact of the twenty-foot-wide band. For
example, the lake is irregular in shape, but its area, as estimated
by a surveyor, allows a rough assumption that it has a radius of
about 233 feet. Assuming perfect concentric circles, that figure
can be used to estimate and compare the areas of the band lying
between sixty-five and 100 feet of the shoreline and the band lying
between eighty and 100 feet of the shoreline. By applying the
resulting ratio to $79,400 (the loss in value caused by the entire
thirty-five foot band), the loss in value the twenty-foot-wide
setback band caused to Lots 4 through 7 may be estimated. The
result is an estimate of about 1.52% of the value of the relevant
property.
Footnote 18:
The landowners there estimate their damages at about $66,000.
Given the context of their discussion, this appears to be their
estimate of the loss in value caused by the "marginal 81-100 foot
setback area." If so, the economic impact is 2.23% of the value of
the subdivision property. If they actually intend the $66,000
estimate to apply only to the first fifteen feet of the thirty-
five-foot setback, the value of the remaining twenty-foot band
would be even less, $13,400 ($79,400 - 66,000), or .452% of the
value of the property.
Footnote 19:
The trial court there quoted Sandberg, 861 P.2d at 558.
Footnote 20:
See Lucas, 505 U.S. at 1015-16 (citations omitted); Sandberg,
861 P.2d at 557.
Footnote 21:
See Sandberg, 861 P.2d at 557 (identifying source of four
factors, first identified by us in State, Dep't of Natural
Resources v. Arctic Slope Reg'l Corp., 834 P.2d 134, 138-39 (Alaska
1991), and derived from Ruckelshaus v. Monsanto Co., 467 U.S. 986,
1000-05 (1984), and Agins v. City of Tiburon, 447 U.S. 255, 260-61
(1980)).
Footnote 22:
Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470,
491-92 (1987) (quoting Mugler v. Kansas, 123 U.S. 623, 665 (1887)).
Footnote 23:
See, e.g., Keystone, 480 U.S. at 485-93 (coal mine); Goldblatt
v. Town of Hempstead, 369 U.S. 590, 590-97 (1962) (rock quarry
excavation); Miller v. Schoene, 276 U.S. 272, 277-81 (1928)
(infectious tree disease); Hadacheck v. Sebastian, 239 U.S. 394,
404-14 (1915) (emissions from factory); Mugler, 123 U.S. at 652
(intoxicating liquors); see also Penn Cent. Transp. Co., 438 U.S.
at 145 (Rehnquist, J., dissenting) ("The question is whether the
forbidden use is dangerous to the safety, health or welfare of
others.").
Footnote 24:
Courts have consistently held that a state need not provide
compensation when it diminishes or destroys the value of property
by stopping illegal activity or abating a public nuisance. See
Pompano Horse Club, Inc. v. State ex rel. Bryan, 111 So. 801, 807
(Fla. 1927) (gambling facility); People ex rel. Thrasher v. Smith,
114 N.E. 31, 32 (Ill. 1916) ("bawdyhouse"); MacLeod v. City of
Takoma Park, 263 A.2d 581, 584 (Md. App. 1970) (unsafe building);
Nassr v. Commonwealth, 477 N.E.2d 987, 990 (Mass. 1985) (hazardous
waste operation); Kuban v. McGimsey, 605 P.2d 623, 627 (Nev. 1980)
(brothel); Eno v. City of Burlington, 209 A.2d 499, 502-03 (Vt.
1965) (fire and health hazard).
Footnote 25:
First English Evangelical Lutheran Church v. County of Los
Angeles, 482 U.S. 304, 328 (1987) (Stevens, J., dissenting)
(citing Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922)).
Footnote 26:
Agins, 447 U.S. at 260.
Footnote 27:
See Kaiser Aetna v. United States, 444 U.S. 164, 174-75
(1979).
Footnote 28:
See Agins, 447 U.S. at 260-61.
Footnote 29:
Robert C. Ellickson, Takings Legislation: A Comment, 20 Harv.
J.L. & Pub. Pol'y 75, 82 (1996).
Footnote 30:
See id.
Footnote 31:
See id.
Footnote 32:
See id. at 83.
