STATE EX REL by absences

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                       STATE EX REL. SHELLY MATERIALS, INC. v.
                      CLARK COUNTY BOARD OF COMMISSIONERS,

                                  SUPREME COURT OF OHIO

                                    875 N.E.2d 59 (Ohio 2007)

PRIOR HISTORY:                                      the board denied Shelly's application because
  APPEAL from the Court of Appeals for              the company had not complied with certain
Clark County, No. 2003-CA-72, 2005 Ohio             zoning regulations. More specifically, the board
6682.                                               concluded:
State ex rel. Shelly Materials, Inc. v. Clark            [**P5] "4. The Applicant has not com-
County Bd. of Comm'r, 2005 Ohio 6682, 2005          plied with Section 129(4) of the Clark County
Ohio App. LEXIS 6003 (Ohio Ct. App., Clark          Zoning Resolution, because the Applicant has
County, Dec. 12, 2005)                              not demonstrated that the proposed resource
   Case Background                                  and mineral extraction use would not be detri-
                                                    mental to the vicinity or surrounding properties.
     [**P2] Shelly has been in the business of
sand and gravel extraction, aggregate produc-            [**P6] "5. The Applicant has not com-
tion, and construction in Clark County for 35       plied with Section 129(5) of the Clark County
years. In 1998, the company purchased a             Zoning Resolution, because the Applicant has
306.057-acre tract of land in Moorefield Town-      not demonstrated that all equipment used in the
ship for $ 1,943,340, to mine the sand and gra-     proposed resource and mineral extraction use
vel deposits beneath the subsurface.                would be constructed, maintained, and operated
                                                    in such a manner as to eliminate so far as prac-
     [**P3] The purchased property, zoned A-1
                                                    tical, noise, vibration, or dust which would in-
as an agricultural district, permits agricultural
                                                    jure or annoy persons living in the vicinity."
uses and also allows residences on lots of one
acre or more. The parcel is surrounded by eight         [**P7] "* * *
subdivisions with more than 200 residential              [**P8] [*339] "12. The Applicant has not
lots. Resource and mineral extraction is an al-     complied with Section 129(12) of the Clark
lowed conditional use in an A-1 Agricultural        County Zoning Resolution, because the Appli-
District, provided that the Clark County Board      cant has not demonstrated that the proposed
of Zoning Appeals approves the application for
                                                    resource and mineral extraction use would be
a permit as a conditional use.                      carried out in a manner and on such scale as to
     [**P4] The year after it bought the proper-    minimize dust, noise, and vibrations, and to
ty, Shelly submitted its application to the board   prevent adversely affecting the surrounding
for a conditional-use permit. Following com-        properties.
munity hearings, Shelly filed an amended ap-            [**P9] [***63] "13. The Applicant has
plication, seeking a permit to mine sand and        not complied with Section 129(13) of the Clark
gravel for 20 years, with a gradual conversion      County Zoning Resolution, because the Appli-
of the property into an area suitable for devel-    cant has not demonstrated that access roads to
opment as a lakefront residential community.
After consideration of the amended application,
                                                                                                     Page 2
                                 115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                 875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

the proposed use would be maintained in a                and as applied; and that it was denied both
dust-free condition."                                    substantive and procedural due process and
                                                         equal protection of the law.
     [**P10] The Clark County Court of
Common Pleas affirmed the board's denial of                   [**P13] The district court dismissed the
the conditional-use permit.                              takings claim and state constitutional claims
                                                         without prejudice because Shelly had not ex-
     [**P11] Shelly appealed. The Second Dis-
                                                         hausted its state remedies. The court also held
trict Court of Appeals determined that the find-
                                                         that the due process claims were barred by res
ings that Shelly had violated Clark County
                                                         judicata and that the equal protection claim
Zoning Resolution Sections 129(5), (12), and
                                                         lacked merit. The United States Court of
(13) were not supported by evidence. Shelly
                                                         [*340] Appeals for the Sixth Circuit affirmed
Materials, Inc. v. Daniels, Clark App. No.
                                                         the dismissal of the takings claim but deferred
2002-CA-13, 2003 Ohio 51, P 44, 48, 51. The
                                                         consideration of the remaining claims, remov-
court of appeals concluded that there was no
                                                         ing the appeal from the active docket, subject to
credible evidence that substantiated any con-
                                                         a possible reinstatement after state court pro-
cerns "about dust, noise, groundwater contami-
                                                         ceedings were completed. Shelly Materials,
nation, and traffic." Id. at P 82. Yet the court
                                                         Inc. v. Board of Zoning Appeals (2005), 160
affirmed the judgment of the trial court because
                                                         Fed. Appx. 443, 2005 U.S. App. LEXIS 28500.
sufficient evidence backed the board's finding
that Shelly did not demonstrate that its opera-              Mandamus Case
tions "will not be detrimental to the vicinity or            [**P14] Shelly then filed a complaint in
surrounding properties." Clark County Zoning             the Second District Court of Appeals for a writ
Resolution Section 129(4). Id. at P 82. The              of mandamus to compel the commissioners to
court of appeals stated, "[W]hile the evidence is
                                                         begin appropriation proceedings, alleging that
far from overwhelming, we have to conclude *             the permit denial was a compensable and invo-
* * that the trial court did not err in finding the      luntary taking. The commissioners filed an an-
proposed gravel pit incompatible with the sur-           swer, and both parties filed motions for sum-
rounding area." Id. at P 84. The Second District         mary judgment. The court of appeals granted
rejected Shelly's constitutional arguments over          the commissioners' motion for summary judg-
the board's decision and interpretation of the           ment, denied Shelly's motion for summary
zoning regulations. Id. at P 113. We did not             judgment, and denied the writ. State ex rel.
then accept for review Shelly's discretionary            Shelly Materials, Inc. v. Clark Cty. Bd. of
appeal from the court of appeals' judgment.              Commrs., Clark App. No. 2003-CA-72, 2005
Shelly Materials, Inc. v. Daniels, 99 Ohio St.3d         Ohio 6682.
1410, 2003 Ohio 2454, 788 N.E.2d 647.
                                                              [**P15] This matter is now before us as
   Federal Case
                                                         an appeal as of right. To be entitled to a writ of
     [**P12] Shelly sued the board and the               mandamus, Shelly must establish a clear legal
county zoning inspector in federal district court        right to compel the commissioners [***64] to
alleging Fifth and Fourteenth Amendment                  begin appropriation, the commissioners' cor-
claims under Section 1983, Title 42, U.S.Code.           responding clear legal duty to institute such ac-
Shelly sought declaratory and injunctive relief          tion, and the lack of an adequate remedy for
and damages, alleging that the board's denial of         Shelly in the ordinary course of law. See State
its conditional-use-permit application was an            ex rel. Duncan v. Mentor City Council, 105
unconstitutional taking; that the zoning regula-         Ohio St.3d 372, 2005 Ohio 2163, 826 N.E.2d
tions were unconstitutional both on their face           832, P 10. Mandamus is the appropriate action
                                                                                                    Page 3
                                115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

to compel public authorities to commence ap-            Amendment purposes: first, those government
propriation cases when an involuntary taking of         actions that cause an owner to suffer a perma-
private property is alleged. State ex rel. Pre-         nent physical invasion of property, see Loretto
school Dev., Ltd. v. Springboro, 99 Ohio St.3d          v. Teleprompter Manhattan CATV Corp.
347, 2003 Ohio 3999, 792 N.E.2d 721, P 12.              (1982), 458 U.S. 419, 435-440, 102 S.Ct. 3164,
                                                        73 L.Ed.2d 868 (state law requiring landlords to
    The Takings Clause and Regulatory Tak-
                                                        permit cable companies to install cable facili-
ings
                                                        ties in apartment buildings effected a taking);
     [**P16] Often referred to as the Just              and second, government regulations that com-
Compensation Clause, the final clause of the            pletely deprive an owner of "all economically
Fifth Amendment to the United States Constitu-          beneficial uses" of the property. (Emphasis sic.)
tion provides: "nor shall private property be           Lucas v. South Carolina Coastal Council
taken for public use, without just compensa-            (1992), 505 U.S. 1003, 1019, 112 S.Ct. 2886,
tion." This prohibition applies to the states as        120 L.Ed.2d 798. A Lucas taking is also known
well as the federal government. Chicago, B. &           as a categorical, or total, taking, and in such a
Q. R. Co. v. Chicago (1897), 166 U.S. 226,              case, the government must pay just compensa-
239, 241, 17 S. Ct. 581, 41 L. Ed. 979; Webb's          tion for the total property taken except to the
Fabulous Pharmacies, Inc. v. Beckwith (1980),           extent that "background principles of nuisance
449 U.S. 155, 160, 101 S.Ct. 446, 66 L. Ed.2d           and property law" independently restrict the
358. Section 19, Article 1 of the Ohio Constitu-        owner's intended use of the property. Id. at
tion also provides that private property shall not      1030. " 'Outside these two relatively narrow
be taken for public use without just compensa-          categories (and the special context of land-use
tion. See, also, State ex rel. Trafalgar Corp. v.       exactions 1 * * *), regulatory takings challenges
Miami Cty. Bd. of Commrs., 104 Ohio St.3d               [***65] are governed by the standards set forth
350, 2004 Ohio 6406, 819 N.E.2d 1040, P 24.             in Penn Central Transp. Co. v. New York City,
     [**P17] The government's appropriation             438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631
or physical invasion of private property re-            (1978).'" Lingle v. Chevron U.S.A., Inc. (2005),
quires compensation for the property owner.             544 U.S. 528, 538, 125 S.Ct. 2074, 161 L.Ed.2d
We recently have indicated the limits on the            876.
government power in eminent domain. Nor-
wood v. Horney, 110 Ohio St.3d 353, 2006                       1 Land-use exactions are government
Ohio 3799, 853 N.E.2d 1115. In some in-                        demands that a landowner dedicate an
stances, moreover, a direct appropriation or                   easement allowing public access to prop-
ouster does not occur, but government regula-                  erty as a condition of obtaining a devel-
tion of private property becomes so onerous                    opment permit. Lingle, 544 U.S. at 546,
that its effect is tantamount to a condemnation,               125 S.Ct. 2074, 161 L.Ed.2d 876.
[*341] and such regulatory taking may be                      [**P19] The default standard of Penn
compensable under the Fifth Amendment. See              Central with respect to "partial" regulatory tak-
Pennsylvania Coal Co. v. Mahon (1922), 260              ing demands an analysis different from the
U.S. 393, 415, 43 S.Ct. 158, 67 L.Ed. 322               analysis for a total taking because after the par-
(Property may be regulated to a certain extent,         tial regulatory taking, the remaining property
but "if regulation goes too far it will be recog-       still has value. Penn Cent., 438 U.S. at 129, 98
nized as a taking").                                    S.Ct. 2646, 57 L.Ed.2d 631. Penn Cent. recog-
    [**P18] Two types of regulatory actions             nizes an ad hoc, factual inquiry that requires the
will be deemed to be per se takings for Fifth           examination of the following three factors to
                                                        determine whether a regulatory taking occurred
                                                                                                    Page 4
                                115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

in cases in which there is no physical invasion,        Hts. City Council (1998), 81 Ohio St.3d 207,
and the regulation deprives the property of less        210, 1998 Ohio 456, 690 N.E.2d 510.
than 100 percent of its economically viable use:             [**P22] Shelly has asserted that it has
(1) the economic impact of the regulation on            been subjected to a categorical, or total, taking.
the claimant, (2) the extent to which the regula-       A total taking occurs when the denial of a
tion has interfered with distinct investment-           property owner's application for a conditional-
backed expectations, and (3) the character of           use permit denies the owner all economically
the governmental action. Id. at 124.                    viable use of its property. "In the Lucas con-
     [**P20] Both the United States Supreme             text, of course, the complete elimination of a
Court and this court have recognized that the           property's value is the determinative factor."
denial of a permit allowing a certain use of            Lingle, 544 U.S. at 539, 125 S.Ct. 2074, 161
property may constitute a taking if the effect of       L.Ed.2d 876.
the denial is to prevent all economically viable             [**P23] The Second District Court of Ap-
use of the land. In United States v. Riverside          peals determined that Shelly's claim was go-
Bayview Homes, Inc. (1985), 474 U.S.121, 127,           verned by Community Concerned Citizens, Inc.
[*342] 106 S.Ct. 455, 88 L.Ed.2d 419, in                v. Union Twp. Bd. of Zoning Appeals (1993),
which denial of a permit to dump fill material          66 Ohio St.3d 452, 1993 Ohio 115, 613 N.E.2d
in wetlands was deemed not to be a taking, the          580, P 14. In Community Concerned Citizens,
court stated, "A requirement that a person ob-          the claimant had purchased property, knowing
tain a permit before engaging in a certain use of       that it was zoned "residential, single family"
his or her property does not itself 'take' the          and that a day care center was a conditional
property in any sense: after all, the very exis-        use. We held that the township's refusal to
tence of a permit system implies that permis-           grant the application for a conditional use was
sion may be granted, leaving the landowner              not a taking, and the fact that a day care center
free to use the property as desired. Moreover,          [***66] could not be constructed and operated
even if the permit is denied, there may be other        did not deny the owner all economically bene-
viable uses available to the owner. Only when a         ficial uses of the land. Id. at 458.
permit is denied and the effect of the denial is
to prevent 'economically viable' use of the land             [**P24] Here, the Second District con-
in question can it be said that a taking has oc-        cluded that Shelly had purchased the property
curred."                                                with knowledge that a conditional-use permit
                                                        was required to mine the sand and gravel in the
     [**P21] Correspondingly, in a case in              zoned area. When the permit application was
which denial of a demolition permit was                 denied, not all economically beneficial use of
deemed not to be a taking, we observed that "           Shelly's property was lost, and therefore, no
'in order for the landowner to prove a [regulato-       compensable taking occurred. Shelly Materials,
ry] taking, he or she must prove that the appli-        2005 Ohio 6682, P 14. Because the purchased
cation of the ordinance has infringed upon the          parcel had many potential uses, no [*343] ge-
landowner's rights to the point that there is no        nuine issue of material fact existed that Shelly
economically viable use of the land and, conse-         had not been deprived of all economically via-
quently, a taking has occurred for which he or          ble use of its land. Id. at P 22.
she is entitled to compensation.' " State ex rel.
BSW Dev. Group v. Dayton (1998), 83 Ohio                    Applicability of R.T.G.
St.3d 338, 343, 1998 Ohio 287, 699 N.E.2d                   [**P25] Shelly contends that State ex rel.
1271, quoting Goldberg Cos., Inc. v. Richmond           R.T.G., Inc. v. State, 98 Ohio St.3d 1, 2002
                                                        Ohio 6716, 780 N.E.2d 998, requires reversal
                                                                                                  Page 5
                                115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

of the judgment of the court of appeals and a           mineral estate was created for the greater por-
remand for the writ of mandamus to issue.               tion of R.T.G.'s land. Id at P 49. The Ohio Rec-
                                                        lamation Board of Review applied an "unsuita-
     [**P26] R.T.G. is a plurality opinion of
                                                        ble for mining" ("UFM") designation to
this court that departs from the established doc-
                                                        acreage that included much of R.T.G.'s proper-
trine of considering a "parcel as a whole" in
                                                        ty containing coal, because the reclamation
analyzing a regulatory-taking claim. The Unit-
                                                        agency was concerned that mining would pol-
ed States Supreme Court has generally rejected
                                                        lute the only available water source of a local
attempts to sever property interests in determin-
                                                        village. Id at P 2. When the UFM designation
ing the relevant parcel for regulatory takings
                                                        was applied, RTG already had received condi-
under the Fifth Amendment. See Tahoe-Sierra
                                                        tional-use permits for some of its acreage and
Preservation Council, Inc. v. Tahoe Regional
                                                        had been surface mining the coal in the area for
Planning Agency (2002), 535 U.S. 302, 331,
                                                        ten years. Id at P 11. RTG claimed that by
122 S.Ct. 1465, 152 L.Ed.2d 517.
                                                        [*344] prohibiting its mining operations, the
     [**P27] No party in this case has re-              government had effected a compensable Lucas
quested that R.T.G. be overruled or has cited           "total taking" of all the property R.T.G. had
the rule in Westfield Ins. Co. v. Galatis, 100          acquired, both as to the fee-owned [***67]
Ohio St.3d 216, 2003 Ohio 5849, 797 N.E.2d              land and the land leased for mineral rights. Id.
1256, that must be applied before precedent is          at P 44.
discarded. "A prior decision of the Supreme
                                                             [**P30] Rather than distinguish between
Court may be overruled where (1) the decision
                                                        the land owned in fee and the land leased, as
was wrongly decided at that time, or changes in
                                                        did the court of appeals on review, the R.T.G.
circumstances no longer justify continued adhe-
                                                        plurality held that the "coal rights" were the
rence to the decision, (2) the decision defies
                                                        relevant parcel and then decided that all eco-
practical workability, and (3) abandoning the
                                                        nomically beneficial use had been taken. Id. at
precedent would not create an undue hardship
                                                        P 57. Stating that "mineral rights are recog-
for those who have relied upon it." Id., para-
                                                        nized by Ohio law as separate property rights, "
graph one of the syllabus.
                                                        id. at P 49, the court cited Moore v. Indian
     [**P28] That is not to say that R.T.G.             Camp Coal Co. (1907), 75 Ohio St. 493, 80
should not be limited to its facts, although the        N.E. 6, 4 Ohio L. Rep. 673.
syllabus is stated broadly. "In determining the
                                                             [**P31] Moore, however, should be read
relevant parcel for a takings analysis, pursuant
                                                        in context. Moore begins, "This court has sev-
to the Takings Clause of the Ohio Constitution,
                                                        eral times recognized and applied the doctrine
Section 19, Article I, coal rights are severable
                                                        that there may be a complete severance of the
and may be considered as a separate property
                                                        ownership of the surface of land from the own-
interest if the property owner's interest was to
                                                        ership of the different strata of mineral which
purchase the property solely for the purposes of
                                                        may underlie the surface; and that the creation
mining the coal." R.T.G., 98 Ohio St.3d 1, 2002
                                                        of a separate interest in the mineral with the
Ohio 6716, 780 N.E.2d 998.
                                                        right to remove the same, whether by deed,
     [**P29] R.T.G.'s holding, however, was             grant, lease, reservation or exception, unless
largely dependent on unique circumstances.              expressly restricted, confers upon the owner of
R.T.G. was a coal-mining company that had               the mineral a fee simple estate, which is of
purchased land and coal leases in eastern Ohio.         course determinable upon the exhaustion of the
Id. at P 2. Because a majority of the property          mine." (Emphasis added.) Id. at 499, 80 N.E. 6.
had been leased for its coal rights, a separate
                                                                                                    Page 6
                                115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

     [**P32] Thus, Moore acknowledged that              6682, P 22. Although the court emphasized that
mineral rights "may" be recognized separately;          Shelly purchased the property with notice of
however, these rights are created as a separate         the zoning regulations, we note that the United
interest in the land, whether "by deed, grant,          States Supreme Court has stated that this chro-
lease, reservation or exception." In R.T.G., a          nology is not necessarily a bar to a takings
separate mineral estate had been created in at          claim. Palazzolo v. Rhode Island (2001), 533
least a portion of the land held by the property        U.S. 606, 121 S.Ct. 2448, 150 L.Ed.2d 592.
owner. In contrast, there is no dispute that Shel-      Nevertheless, a property owner's awareness of
ly purchased its land in its entirety and that the      regulations may be relevant in a Penn Central
deed transferred a fee simple title to Shelly Ma-       partial taking, for one of the inquiries is " 'the
terials Inc.                                            extent to which the regulation [***68] has in-
                                                        terfered with distinct investment-backed expec-
     [**P33] R.T.G. stated that the UFM desig-
                                                        tations.' " Lingle, 544 U.S. at 539, 125 S.Ct.
nation constituted a Lucas total taking of
R.T.G.'s coal property, even though arguably            2074, 161 L.Ed.2d 876, quoting Penn Cent. 438
                                                        U.S. at 124, 98 S.Ct. 2646, 57 L.Ed.2d 631.
the designation did not deprive RTG of all eco-
                                                        Shelly, however, has not made a Penn Central
nomically beneficial use of the property it
                                                        takings claim here.
owned in fee. Shelly now asks us to expand
R.T.G. and hold that if a property is purchased             Background Principles
only to mine sand and gravel, the owner who                  [**P36] "[E]ven if a regulation results in
does not receive a conditional-use permit must          categorical taking, no compensation is due if
receive compensation for a total taking of the          the claimant's use of the land violates
value of the mining. We decline to broaden              'restrictions that background principles of the
R.T.G. in this fashion.                                 State's law of property and nuisance already
     [**P34] Sand and gravel are minerals that          place upon land ownership.' " R.T.G., 98 Ohio
are subject to mining restrictions. R.C.                St.3d 1, 2002 Ohio 6716, 780 N.E.2d 998, P 36,
1514.01(B); see, also, R.C. 5301.56(A)(4),              quoting Lucas, 505 U.S. at 1029, 112 S.Ct.
which includes sand and gravel in the definition        2886, 120 L.Ed.2d 798. There is no need to ex-
of minerals in an Ohio Marketable Title Act             amine background principles in this case, be-
provision concerning abandonment and pre-               cause there has been no categorical taking.
servation of mineral interests. R.T.G. should be            The Regulatory Burden
clarified based upon Moore's holding: A min-
eral estate may be considered the relevant par-              [**P37] Shelly also argues that (1) appli-
cel for a compensable regulatory taking if the          cation of Chapter 7, Section 129(4) of the Clark
mineral estate was purchased separately from            County Zoning Resolution to deny Shelly its
the other interests in the real property. Other-        use of the sand and gravel within its property
wise, the property should be considered as a            "imposes a burden so onerous and extreme that
whole when a regulatory takings claim is made.          compensation should be paid," and (2) the bur-
Because there is no evidence that a mineral es-         den imposed upon a natural-resource owner
tate was created in this case, the [*345] court         who is denied a conditional-use permit to ex-
of appeals correctly examined Shelly's pur-             tract the natural resources "is greater than the
chased property as the relevant parcel.                 burden imposed upon other types of landown-
                                                        ers such that a protectable property interest
    [**P35] The Second District appropriately           should be found." In other words, Shelly main-
examined the parcel as a whole, including its           tains that advance notice of a conditional-use
surface rights, in determining whether a taking         regulatory scheme should not divest owners of
had occurred. Shelly Materials, 2005 Ohio
                                                                                                    Page 7
                                115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

property containing natural resources of their               [**P42] [***69] Accordingly, we affirm
property interests without just compensation.           the judgment of the court of appeals and deny
                                                        the writ.
    [**P38] The United States Supreme Court
has explained that the purpose of the Takings                 Judgment affirmed.
Clause is to "bar Government from forcing                    MOYER, C.J., and O'CONNOR and CUPP,
some people alone to bear public burdens                JJ., concur.
which, in all fairness and justice, should be
borne by the public as a whole." Armstrong v.                 O'DONNELL, J., concurs in judgment on-
United States (1960), 364 U.S. 40, 49, 80 S.Ct.         ly.
1563, 4 L.Ed.2d 1554. The question is whether                PFEIFER and LUNDBERG STRATTON,
Shelly's situation demands a writ of [*346]             JJ., dissent.
mandamus to order the commissioners to begin
appropriation proceedings because it has not            DISSENT BY: PFEIFER, J., LUNDBERG
been granted the conditional-use permit.                STRATTON, J.
     [**P39] Shelly contends that denial of the
conditional-use permit removes all economic             DISSENT
value associated with its property. However,                  PFEIFER, J., dissenting.
Shelly purchased more than sand and gravel
rights, and as we have discussed, there are oth-              [**P43] I dissent from the majority opi-
er potential uses available for that land. The          nion, which muddles takings law in Ohio by
Clark County Board of Zoning has authority to           ignoring precedent. This case is in all relevant
regulate property and issue conditional use             regards identical to State ex rel. R.T.G., Inc. v.
permits within the county. The court of appeals         State, 98 Ohio St.3d 1, 2002 Ohio 6716, 780
has upheld the permit denial.                           N.E.2d 998. However, in direct contradiction to
                                                        R.T.G, the majority concludes here that "Shel-
    [**P40] Whether mining natural resources            ly's sand and gravel interests in its property are
should be treated differently from other condi-         not severable as separate property interests be-
tionally permitted uses is a public policy ques-        cause the deed did not specify a transfer of
tion that we decline to answer. Under the cir-          mineral rights alone, but transferred fee simple
cumstances of this case, we hold that there has         title to Shelly," holding that this conclusion is
been no undue burden placed on Shelly by the            supported by a "limitation" on our previous
denial of its conditional-use permit.                   holding in R.T.G.
   Conclusion                                                [**P44] [*347] The court's holding is er-
     [**P41] Based on the foregoing, Shelly's           roneous for several reasons: (1) it actually over-
sand and gravel interests in its property are not       rules R.T.G. instead of limiting it; (2) it makes
severable as separate property interests because        arbitrary distinctions between the facts in
the deed did not specify a transfer of mineral          R.T.G. and the facts of this case; and (3) it re-
rights alone, but transferred fee simple to Shel-       lies on a ground that was neither argued by the
ly Materials, Inc. Therefore, any regulatory tak-       parties nor adopted by the court of appeals.
ing claim must be analyzed using the property           Moreover, even if the court's sua sponte limita-
as a whole. Because the county zoning appeals           tion of R.T.G. is appropriate, a reversal and re-
board's denial of the conditional-use permit did        mand are warranted so that Shelly is afforded
not deprive Shelly of all economically viable           the opportunity to raise a Penn Central takings
use of its property, a compensable taking did           claim. Penn Cent. v. New York City (1978), 438
not occur.                                              U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631.
                                                                                                     Page 8
                                 115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                 875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

     [**P45] First, the court's holding -- that a        and that are located in the UFM-designated
mineral estate may be considered the relevant            area." (Emphasis added.) Id. at P 3.
parcel for a regulatory-takings determination                [**P49] Therefore, the so-called "limita-
only if the mineral estate was purchased sepa-           tion" or "clarification" of R.T.G. espoused by
rately from other interests in the real property --      the majority manifestly overrules R.T.G. in-
actually overrules R.T.G. rather than limiting or        stead of limiting or clarifying it. That is, the
clarifying it. In R.T.G., 98 Ohio St. 3d 1, 2002         majority's application of its holding here would
Ohio 6716, 780 N.E.2d 998, syllabus, and P               have resulted in a completely different outcome
49-50, the court held that regardless of whether         in R.T.G.
a mineral-extracting company purchases prop-
erty in fee simple or through mineral-rights                  [**P50] [*348] Yet the majority con-
leases or purchases, as long as the company              cedes that R.T.G. cannot be overruled here.
does so for the sole purpose of mining the min-          That is because the majority is constrained by
erals from the property, the mineral estate is           the hopelessly random and formulaic approach
severable from the remainder of the property             to overruling precedent set forth in Westfield
owned in fee, and the relevant parcel for a tak-         Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003
ings analysis is the severed mineral estate.             Ohio 5849, 797 N.E.2d 1256. The Galatis-
                                                         related problems with overruling R.T.G. in the
     [**P46] R.T.G. did not require that the             context of this appeal are that (1) neither the
deed to the property transferred to a mineral-           parties nor the court of appeals argues or oth-
extracting company "specify a transfer of min-           erwise suggests that R.T.G. was either wrongly
eral rights alone" in lieu of a fee interest. In-        decided or should be overruled; (2) even if ap-
stead, the court specifically held that "RTG ac-         pellee -- the board of county commissioners --
quired all the property at issue herein, whether         had requested that R.T.G. be overruled because
in fee or through coal leases or purchases, for          it was wrongly decided, an incorrect decision
the sole purpose of surface-mining the coal * *          satisfies only the first part of the court's three-
*" and that all of that mineral estate was the           part Galatis test to overrule precedent; and (3)
relevant parcel for a takings analysis. (Empha-          there is no evidence or argument supporting the
sis added.) R.T.G. at P 50.                              latter two requirements for overruling R.T.G.
     [**P47] In effect, the majority opinion             pursuant to Galatis. In State ex rel. Grimes
adopts the holding of the court of appeals in            Aerospace Co., Inc. v. Indus. Comm., 112 Ohio
R.T.G., which distinguished between owning               St.3d 85, 2006 Ohio 6504, 858 N.E.2d 351, P 6,
mineral rights separately and owning those               this court denied a request to overrule
rights as part of the property purchased in fee.         precedent because the appellant had failed to
R.T.G. at P 19-23. But in R.T.G., we reversed            argue that the final two Galatis requirements
the portion of the court of appeals' judgment            were met.
that did not sever the mineral estate from the                [**P51] Thus, instead of explicitly over-
property owned by RTG in fee:                            ruling R.T.G., the majority opinion arbitrarily
     [**P48] "We reverse the judgment of the             distinguishes the facts in R.T.G. from the facts
court of appeals in part and hold that the UFM           in this case. The majority concludes that
[unsuitable for mining] regulation resulted in a         R.T.G. "was largely dependent on unique cir-
taking of RTG's coal that lies under the tracts          cumstances," including that "[b]ecause a major-
of land in which RTG owned only coal rights              ity of the property had been leased for its coal
and that are located within the UFM-designated           rights, a separate mineral estate was created for
area, as well [***70] as the coal rights that lie        the greater portion of RTG's land" and that
under the tracts of land that RTG owned in fee           RTG "already had received conditional-use
                                                                                                      Page 9
                                  115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                  875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

permits for some of the acreage and had been              ry-takings claim is not barred by the mere fact
surface mining the coal in the area for ten               that the property owner acquired the property
years." The majority may have just as well                with knowledge of a preexisting land-use re-
have distinguished R.T.G. on the basis that in            striction. Palazzolo v. Rhode Island (2001), 533
this case, the parties' names are different.              U.S. 606, 627-628, 121 S.Ct. 2448, 150 L.Ed.2d
                                                          592; State ex rel. Shemo v. Mayfield Hts.
     [**P52] The first limitation suggested by
                                                          (2002), 95 Ohio St.3d 59, 2002 Ohio 1627, 765
the majority is that as long as most of the total
                                                          N.E.2d 345. RTG had in fact received permits
property acquired is only the mineral estate, the
                                                          to mine only 107.4 of its roughly 500 acres at
property owner will receive the benefit of the
                                                          the time of the state's UFM designation. R.T.G
R.T.G. holding for any remaining property it
                                                          at P 5-13. Therefore, for about 80 percent of its
owns in fee simple. This is a peculiar and arbi-
                                                          property, RTG was in no different a position
trary distinction. At issue in R.T.G were ap-
                                                          than Shelly was in here -- without any permit to
proximately 500 acres owned by the coal-
mining company: 200 acres of property in fee              mine.
and approximately 300 acres of owned or                        [**P54] The third flaw in the majority's
leased coal rights only. R.T.G. at P 5. We held           holding is that its "limitation" -- that "Shelly's
that for all of this property -- including that por-      sand and gravel interests in its property are not
tion of the roughly 200 acres that RTG owned              severable as separate property interests because
in fee and was within the UFM-designated area             the deed did not specify a transfer of mineral
-- the mineral rights were severable and would            rights alone, but transferred fee simple to Shel-
be treated as the relevant parcel for RTG's tak-          ly * * *" -- was not raised by the parties or the
ings claim. R.T.G. at P 50. The fact that a ma-           court of appeals. (Emphasis added.) Neither
jority of the acreage involved only mineral               party requested and the court of appeals did not
rights was not cited as a relevant fact in R.T.G.         conclude that R.T.G. should be so "limited."
This court dealt with the property owned in fee           Instead, the board of county commissioners and
separately, without consideration of the charac-          the court of appeals sought to distinguish
ter of the other property. The majority's odd             R.T.G. on the erroneous grounds of no vested
distinction is not supported by any logical or            rights, preexisting knowledge of land-use re-
equitable rationale.                                      strictions, and background principles of zoning
                                                          law. Shelly, 2005 Ohio 6682, P 13-16, 20-21.
     [**P53] The other limitation set forth by
the majority -- that RTG had already received                  [**P55] The problem with deciding a
permits for some of its property before the reg-          case on an issue that did not form the basis for
ulatory taking occurred -- [*349] is also not a           either the trial court's decision or the parties'
basis to distinguish this case from R.T.G. Both           arguments is that "[w]hile appellate courts have
the United States Supreme Court and this court            the power to raise issues sua sponte, they
have recognized that the denial of a permit to            should cease deciding cases on such issues
allow a property use can constitute a compens-            without giving the parties an opportunity to be
able taking if the effect of the denial is to             heard through supplemental briefing and argu-
[***71] prevent all economically viable use of            ment * * * [because the] failure to do so is in-
the land. United States v. Riverside Bayview              consistent with the fundamental principles of
Homes, Inc. (1985), 474 U.S. 121, 127, 106                due process that a party should have notice of,
S.Ct. 455, 88 L.Ed.2d 419; State ex rel. BSW              and the opportunity to be heard on, the deter-
Dev. Group v. Dayton (1998), 83 Ohio St.3d                minative issue in the case." (Emphasis sic.) Mi-
338, 343, 1998 Ohio 287, 699 N.E.2d 1271.                 lani & Smith, Playing God: A Critical Look at
And as the majority acknowledges, a regulato-             Sua Sponte Decisions by Appellate Courts
                                                                                                   Page 10
                                115 Ohio St. 3d 337, *; 2007 Ohio 5022, **;
                                875 N.E.2d 59, ***; 2007 Ohio LEXIS 2411

(2002), 69 Tenn.L.Rev. 245, 315. The prefera-           quests that we apply R.T.G. here. So applied,
ble course is to request supplemental briefing          R.T.G. does not require a separate purchase of
on issues that are not raised by the parties that       the mineral estate in order for the estate to be
are susceptible of reasonable disagreement and          considered the relevant parcel for a compensa-
are considered to be potentially dispositive.           ble regulatory taking. R.T.G. merely requires
See, e.g., State v. Drummond, 111 Ohio St.3d            evidence that the property owner's interest in
14, 2006 Ohio 5084, 854 N.E.2d 1038, P 28;              purchasing the property was solely for the pur-
Kish v. Akron, 106 Ohio St.3d 1402, 2005 Ohio           pose of mining the minerals. Id. at syllabus and
3118, 829 N.E.2d 1215; State v. Yarbrough,              P 50. Consistent with the court's precedent in
104 Ohio St.3d 1, 2004 Ohio 6087, 817 N.E.2d            R.T.G., Shelly submitted an uncontroverted af-
845, P 4.                                               fidavit that its sole purpose in purchasing the
                                                        property was to mine sand and gravel. The
     [**P56] [*350] Finally, even if the ma-
                                                        board of county commissioners never contested
jority's sua sponte overruling of R.T.G. were
appropriate, it should have remanded the cause          that evidence.
to the appellate court for further proceedings to            [**P58] Therefore, because the court's
permit Shelly to assert a Penn Central takings          holding effects a sub silentio overruling of
claim. It is hardly equitable to apply an overrul-      R.T.G. that neither the parties nor the court of
ing or "limitation" of precedent that neither par-      appeals requested and is not supported by any
ty requested and then apparently simultaneous-          logical factual distinction, I dissent. Only Gala-
ly preclude the party harmed by that holding            tis keeps the majority from its true objective.
from raising a new takings claim. Because               Without Galatis, the court could have explicitly
Shelly could not have reasonably foreseen that          overruled R.T.G., which would have at least
this court would apply a limitation to our              lent clarity to takings law in Ohio. Now, parties
R.T.G. holding that neither party advocated and         will be left to wonder what the law is and
the court of appeals did not find, Shelly could         which irrelevant fact from R.T.G. might be
not have intentionally waived a Penn Central            used in the future to further limit its applica-
claim under these circumstances. Pursuant to            tion.
Penn Central, the conditional-use limitation                 [**P59] Meanwhile, the evidence mounts
would not necessarily mean that Shelly's eco-           against the precedential value of Galatis. As to
nomic expectation of being able to obtain the           its own magical second element -- "workabili-
permit to extract sand and gravel was so unrea-         ty" -- Galatis continues to come up short,
sonable that [***72] it would defeat Shelly's           which may some day result in this court's over-
takings claim. This is particularly true when the       ruling Galatis on the authority of Galatis. See
denial of Shelly's conditional-use permit was           Dwight Latham and Moe Jaffe, "I'm My Own
affirmed by a sharply-divided panel of the court        Grandpa."
of appeals in which even the majority found
that the evidence supporting the denial was "far            LUNDBERG STRATTON, J., dissenting.
from overwhelming." Shelly Materials, Inc. v.                [**P60] [*351] With the exception of the
Daniels, Clark App. No. 2002-CA-13, 2003                comments regarding Westfield Ins. Co. v. Gala-
Ohio 51, P 84.                                          tis, 100 Ohio St.3d 216, 2003 Ohio 5849, 797
     [**P57] In sum, notwithstanding the ma-            N.E.2d 1256, I join the dissenting opinion of
jority's view that Shelly requests that we "ex-         Justice Pfeifer.
pand" or "broaden" R.T.G., Shelly simply re-

								
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