Petition for Writ of Certiorari — Woodbury Place Partners v. City of Woodbury

In the

Supreme Court of the United States

October Term, 1992

WOODBURY PLACE PARTNERS,

a Minnesota general partnership,

2, toenp °

Pevutuionel

CITY OF WOODBURY

a Minnesota Municipal Corporation,

4 ’ f

at SP nmaeni

PETITION FOR A WRIT OF CERTIORARI

THE STATE OF MINNESOTA COURT OF APPEALS

PETITION FOR A WRIT OF CERTIORARI

‘Gerald S. Duffy

Anthony J. Gleeke!l

SIEGEL, BRILL, GRE|

DUFFY, P.A

100 Washington Avenus

1300 Washington Square

Minneapolis, Minnesota

612) 339-713]

{ttorneyv for Petitioner

*Counsel of Record

Bachman Legal Printing, 835 Second Ave. So., Mpls MN 55402

@ FAX 612-337-8053

QUESTION PRESENTED

DOES A TEMPORARY DEVELOPMENT

MORATORIUM THAT DENIES A

LANDOWNER ALL ECONOMICALLY VIABLE

USE OF ITS LAND DURING THE

MORATORIUM CONSTITUTE A

CATEGORICAL COMPENSABLE TAKING

UNDER THE FIFTH AMENDMENT OF THI

UNITED STATES CONSTITUTION?

THE PARTIES

Petitioner is a Minnesota General Partnership.

Respondent is a Minnesota Municipal Corporation.

TABLE OF CONTENTS

TABLE OF AUTHORITIES ........

| A

2 ee 8

og | 8 |

lll

TABLE OF AUTHORITIES

CASES:

Agins v. Tiburon,

447 U.S. 255 (19

Chicago BO&R Co. v. Chicago,

166 U.S. 226, 41 L.Ed. 979,

17 S.Ct. 581 (1897)

First English Evangelical Church

of Glendale v.

Los Angeles, 482

Sp is Pe rrr are

Keystone Bituminous Coal

Association Vv.

480 U.S. 470 (1987) ....

Lucas v. South Carolina Coastal

‘t. 2886 (1992)

Council, |

Penn Central Transportation

pene V.

438 U.S. 104 (

Pennsylvania Coal v.

260 U.S. 393.

County of

DeBenedictis,

City And New York,

415 (1922)

= ye 6s 2 are Fe

MISCELLANEOUS:

Bozung and Alessi, Recent Developments in

Environmental Preservation

and Rights of Property Owners,

The Urban Lawyer Vol. 20, No. 4

(eee eer eee ee ee ee eee

Michelman, Property, Utility and Fairness:

Comments on the Ethical Foundations

of "Just Compensation" Law,

80 Harv. L. Rev. 1165, 1192 (1967) .......

Sax, Takings and the Police Power,

74 Yale LJ. 36, 60 (1964) ..............

Williams, Smith, Siemon, Mandelker

& Babcock, The White River

Junction Manifesto, Vermont Law

Review, Vol. 9, No. 2 (1984) ...........

In the

SUPREME COURT OF THE UNITED STATES

October Term, 1992

WOODBURY PLACE PARTNERS,

a Minnesota General Partnership

Petitioner,

VS.

CITY OF WOODBURY,

a Minnesota Municipal Corporation

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES SUPREME COURT TO THE

STATE OF MINNESOTA COURT OF APPEALS

Petitioner respectfully asks that a Writ of Certiorari

issue to review the decision of the State of Minnesota

Court of Appeals filed on November 17, 1992.

Discretionary review was denied by the Minnesota

Supreme Court in an Order filed January 15, 1993.

OPINIONS BELOW

The Minnesota Supreme Court’s Order denying

review of the Minnesota Court of Appeals Decision is

unreported. The decision of the Minnesota Court of

Appeals is reported at 492 N.W.2d 258 (Minn. Ct. App.

1993). The Findings of Fact, Conclusions of Law and

Order for judgment of the State District Court are not

reported. The Minnesota Supreme Court’s Order, Court

of Appeal’s decision and State District Court’s Findings of

Fact, Conclusions of Law, Order for Judgment and

Judgment are reprinted in the Appendix and are cited

herein as App. A-1 through App. A-38.

JURISDICTION

The Minnesota Supreme Court’s Order denying

review of the Minnesota Court of Appeals decision was

filed on January 15, 1993. This Court has jurisdiction to

review the Minnesota Court of Appeals decision by Writ

of Certiorari pursuant to 28 U.S.C. §1257.

STATUTES AND RULES INVOLVED

U.S. Const. Amend. V:

No person shall be held to answer for a

capital, or otherwise infamous crime, unless

On a presentment or indictment of a Grand

Jury, except in cases arising in the land or

naval forces, or in the Militia, when in

actual service in time of War or public

danger; nor shall any person be subject for

the same offence to be twice put in jeopardy

5

of life or limb; nor shall be compelled in

any criminal case to be a witness against

himself, nor be deprived of life, liberty, or

property, without due process of law; nor

shall private property be taken for public

use, without just compensation.

STATEMENT OF THE CASE

This Petition presents the question of whether an

interim development moratorium, which denies a property

owner all economically viable use of its property, consti-

tutes a categorical compensable taking under the Fifth

Amendment of the United States Constitution.

At all relevant times, Petitioner was the owner of

thirteen acres of vacant, unimproved property within

Respondent’s corporate boundaries ("Property"). In

February 1988, Petitioner submitted an application to

Respondent for approval of a commercial development on

the Property. Respondent tabled the Petitioner’s develop-

ment application and requested that Petitioner submit a

revised development plan consistent with proposed

roadway improvements adjacent to the Property.

(Stipulated Findings of Fact (Petitioner’s version) no. 19.)

Petitioner revised its development application § to

accommodate the Respondent’s proposed redesign of

adjacent roadways. (Stipulated Findings of Fact

(Petitioner’s version) no. 19.)

On March 23, 1988, Respondent adopted a six-

month moratorium ("Moratorium") on development of

property including Petitioner’s Property. The Moratorium

States, in part:

No application for subdivision approval, site

plan review, amendments to the comprehen-

sive plan or rezoning should be accepted or

considered in the area designated herein

during the time that this ordinance is in

effect.

he Moratorium included a provision allowing a landown

er to apply for a variance.

On June 8, 1988, the Respondent made its final

decision on Petitioner’s application by tabling all further

action on the application until termination of the

Moratorium. Respondent also denied Petitioner's request

for a variance from the Moratorium. (Stipulated Findings

of Fact (Petitioner’s version) no. 36.)

On three separate occasions, the Respondent

extended the Moratorium for consecutive six-month terms.

(Stipulated Findings of Fact (Petitioner’s version) no. 41.)

On February 22, 1989, Respondent denied Peti-

tioner’s second request for a variance from the Moratori-

um. (Stipulated Findings of Fact (Petitioner's version) no.

41.) The Moratorium was terminated on March 23, 1990,

two years to the day from its adoption.

Petitioner sought an Alternative Writ of Mandamus

in July 1988, directing Respondent to institute condemna-

tion proceedings for a temporary taking of the Property

during the two-year Moratorium. In order to avoid a

lengthy trial, the parties stipulated to findings of fact,

including that Petitioner was denied all economically

viable use of the Property for the two years the

Moratorium was in effect. (Stipulated Findings of Fact

(Petitioner’s Version) no. 47).!

The state District Court heard oral argument on

the sole issue in the case: whether the Moratorium

constituted a compensable temporary taking of the

Property. The District Court ruled that the Moratorium

effected a compensable temporary taking (App. A 2-3).

The District Court’s decision was based on this Court’s

holdings in First English Evangelical Church of Glendale v.

County of Los Angeles, 482 U.S. 304 (1987), and Agins v.

Tiburon, 447 U.S. 255 (1980) (App. A-6).

Respondent appealed the District Court’s decision

to the Minnesota Court of Appeals. The Court ol

Appeals reversed the District Court. The Minnesota

Supreme Court denied discretionary review of the

Minnesota Court of Appeals’ decision.

Citing Lucas v. South Carolina Coastal Council, 112

S.Ct. 2886 (1992), the Minnesota Court of Appeals

recognized that a "categorical taking" occurs when a

regulation “denies all economically beneficial or

productive use of land,” but nevertheless held that a two-

year loss of use did not rise to the level of a categorical

taking.” The Minnesota Court of Appeal held that:

‘In Agins v. Tiburon, 447 U.S. 255, 260 (1980), this Court held that

the Fifth Amendment is violated when land-use regulation “does not

substantially advance legitimate state interests or denies an owner

economically viable use of his land" (emphasis added)

“The Court of Appeals remanded the case to the District Court for

submittal of evidence to determine if the Moratorium effecied a taking

pursuant to the factors set forth in Penn Central Transportation

When measured against the value of the

property as a whole, rather than against

only a two-year time frame, the moratorium

did not deny the partnership “all

economically viable use" of its property.

(App. A-33-34)

The Court of Appeals acknowledged that no case

specifically addressed the dimension of time as it applies

to the totality of a taking. The Court of Appeals

determined that loss of present use did not constitute

denial of all economically viable use as defined in Lucas

v. South Carolina Coastal Council, because the Property

had future use.

REASONS FOR GRANTING THE WRIT

SUMMARY

In 1922, Justice Oliver Wendell Holmes originated

the concept that government regulation, like physicai

appropriation, may effect a Fifth Amendment taking of

property:

while property may be regulated to a certain

extent, if it goes too far it will be recognized

as a taking.

Pennsylvania Coal v. Mahon, 260 U.S. 393, 415 (1922).

Company v. City of New York, 438 U.S. 104 (1978)

This Court has painstakingly sought to define

Holmes’ pronouncement in recent years. Lucas v. South

Carolina Coastal Counsel, 112 S. Ct. 2886 (1992);° First

English Evangelical Church of Glendale v. County of Los

Angeles, 482 U.S. 304 (1987); Keystone Bituminous Coal

Association v. DeBenedictis, 480 U.S. 470 (1987); Agtiis v.

City of Tiburon, 447 U.S. 255 (1980) and Penn Central

Transportation Company v. City of New York, 438 U.S. 104

(1978). Those cases provided the Court with the

opportunity to offer "insight into when, and under what

circumstances, a given regulation would be seen as going

‘too far’ for purposes of the Fifth Amendment." Lucas,

113 S.Ct. at 2893.

The issue presented in this Petition naturally

follows previous regulatory taking cases as it will provide

equally important "insight" into when and under what

circumstances a regulation effects a temporary taking. This

Petition presents the Court with a question that has never

been before the Court. Specifically, this Petition gives the

Court the opportunity to decide whether a temporary

regulation which denies a property owner all present

economic use of its property, constitutes a categorical

taking as defined in Lucas v. South Carolina Coastal

Council.

The issue is squarely presented as a matter of law

because the parties stipulated that the two-year

Moratorium denied Petitioner all economically viable use

of the Property for two years. (Stipulated Findings of Fact

(Petitioner's Version) no. 47). Presented with that

The Lucas v. South Carolina Coastal Council decision was issued

during the briefing schedule before Minnesota Court of Appeals

5

stipulation, the Minnesota Court of Appeals held that no

compensable temporary taking occurred. The Court of

Appeals held that denial of all economically viable use of

property, for a definite period of time, does not constitute

a taking because the economic burden must be measured

against the value of the Property “as a whole,” not just the

two-year segment of time (App. A-33). The Minnesota

Court of Appeals based its decision on Penn Central

Transportation Company, 438 U.S. at 130-131 and Keystone

Bituminous Coal Association v. DeBenedictis, cases pre

dating both Lucas v. South Carolina Coastal Council and

First English Evangelical Lutheran Church of Glendale \

County of Los Angeles.

This Court has not defined the "property interest

against which the loss of value is to be measured. While

that question remains unclear as to severance of physical

segments of property, the Court has never spoken to the

issue Of whether the temporal strand of the bundle of

rights that compose property should be isolated for the

purpose of determining whether denial of all economically

viable use occurs.

With widespread use of governmental growth

management techniques (1.e., moratoria), which are

designed to stop or stall development, the novel issue

presented in this Petition is timely, and of vital importance

and great interest to all landowners and_ planning

authorities.

The Decision Of The Minnesota Court Of Appeals

Raises An Important Question Of Federal Law

Which Should Be Settled By This Court Without Delay

In Keystone Bituminous Coal Association \

DeBenedictis, First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles, and Lucas v. South

Carolina Coastal Council, petitions for certiorari were

yranted because of the novelty and importance of the

questions presented as they related to the Court's desire

to define when and under what circumstances a regulation

effects a taking under the Fifth Amendment to the

Constitution.’ The issue presented here is_ both

unresolved and novel, and as important as those presented

in Keystone Bituminous Coal Association v. DeBenedictts,

First English Evangelical Lutheran Church of Glendale

County of Los Angeles and Lucas v. South Carolina Coastal

Council.

In order to answer whether a moratorium

constitutes a compensable temporary taking,’ tne Court

must define the "property interest” against which the loss

in value resulting from the regulation is to be measured.

With temporary regulations the Court must consider

whether present use and future uses are separate SI

in the bundle of rights that compose property, or whether

“The Fifth Amendment (takings clause) provides “nor shall privat

property be taken for public use, without just compensation’ and 1

applies to the states through the Fourteenth Amendment. See ¢ hicage

BOAR Co. v. Chicago. 166 U.S. 226, 41 L.Ed. 979, 17 S.Ct. 581 (189

~

, Ss '

they are to be viewed together.” No case has addressed

a regulation’s duration as it applies to the totality of a

taking.

While the Court has never faced the issue regarding

segmentation of time as a component of property for

regulatory takings analysis, there appears to be no

consensus on the issue of segmentation of physical

segments of property versus defining the "parcel as a

whole."’ Penn Central Transportation Company, 438 U.S.

at 130-131 (1978). Segmentation of the physical strand that

composes a parcel of property was first addressed in Penn

Central Transportation Company v. New York:

"Taking" jurisprudence does not divide a

single parcel into discrete segments and

attempt to determine whether rights in a

particular segment have been entirely

‘This issue has ignited great debate amongst land-use scholars. See,

Sax, Takings and the Police Power, 74 Yale LJ. 36, 60 (1964);

Michelman, Property, Utility and Fairness: Comments on the Ethical

Foundations of "Just Compensation" Law, 80 Harv. L. Rev. 1165, 1192

(1967); Bozung and Alessi, Recent Developments in Environmental

Preservation and Rights of Property Owners, The Urban Lawyer Vol.

20, No. 4 (1988); Williams, Smith, Siemon, Mandelker & Babcock, The

White River Junction Manifesto, Vermont Law Review, Vol. 9, No. 2

(1984).

°In Penn Central Transportation Company v. New York, the dissent

did not agree with the "parcel as a whole" formulation. In response to

the Court’s formulation the dissent opined that "the Court must define

the particular property unit that should be examined.” Penn Central

Transportation Company, 438 U.S. at 149, n. 13 (Rehnquist J.,

dissenting).

10

abrogated. In deciding whether a particular

governmental action has effected a taking,

this Court focuses rather both on the

character of the action and on the nature of

the interference with rights in the parcel as

a whole...

Penn Central v. Transportation Company, 438 U.S. at 130-

131.

The Court in Keystone Bituminous Coal Association

v. DeBenedictis, focused on defining "property interest.” In

that case, the Court held that the Pennsylvania Subsidence

Act, which prohibited the mining of more than 50 percent

of coal beneath public buildings, dwellings or cemeteries,

did not constitute a facial taking. Just as the Minnesota

Court of Appeals broadly defined the temporal strand in

this case, the Court broadly defined physical segments of

property, ultimately holding that "as a whole" the owner

had not been denied all economically viable use because

it had use of a portion of the property. Keystone

Bituminous Coal Association, 480 U.S. at 497, quoting,

Penn Central Transportation Company, 438 U.S. at 130-131.

The dissent in Keystone Bituminous Coal Association

v. DeBenedictis opposed the Court’s perpetuation of the

Penn Central Transportation Company "parcel as a whole”

formulation. Recognizing the vagueness of the Penn

Central Transportation Company "parcel as a whole’

language, the dissent concluded:

The Court gave no guidance on how one Is

to distinguish a "discrete segment’ from a

single parcel.

tt CC

Keystone Bituminous Coal Association, 480 U.S. at 517, n.

S (Rehnquist J., dissenting).

In the same term, the Court decided the seminal

case ON a property owner’s right to compensation for

temporary taking of property. See; First English

Evangelical Lutheran Church of Glendale v. County of Los

Angeles. The Court held that where the governmental

regulation works a taking of all use of property, no

subsequent action relieves the government of the duty to

compensate the landowner for the period during which the

taking was effective. First English Evangelical Lutheran

Church of Glendale v. County of Los Angeles, provides

support for the State District Court’s holding in this case

(that the Moratorium effected a compensable taking), but

did not present the Court with the opportunity to

determine whether the temporal strand of property is to

be severed when defining the "property interest" that has

been denied use as a result of government regulation.’

"Justice Stevens, in his First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles, dissent, recognized that treatment

of the temporal strand of property was an issue that needed

clarification:

Regulations are three-dimensional; they have depth,

width and length ... Finally, and for purposes of this

case, essentially, regulations set forth the duration of

the restrictions. It is obvious that no one of these

elements can be analyzed alone to evaluate the impact

of the regulation, and hence to determine whether a

taking has occurred

First English Evangelical Lutheran Church of Glendale, 482 U.S. at 330

(Stevens J., dissenting)

In Lucas v. South Carolina Coastal Council, the

Court again recognized the need to clarify what constitutes

"property interest" for regulatory taking purposes. The

Lucas v. South Carolina Coastal Council Court promulgat-

ed a per se categorical rule that a regulation which denies

a landowner economically viable use of its land effects a

compensable taking without case-specific inquiry or

balancing of public interest advanced in support of the

regulation. While committing to a categorical rule, it

appears the Court believed that the definition of "property

interest" remains unclear:

Regrettably, the rhetorical force of our

"deprivation of all economically feasible use"

rule is greater than its precision, since the

rule does not make clear the ‘property

interest’ against which the loss of value is to

be measured.

Lucas, 112 S.Ct. at 2894 n.7.

By this footnote, the Court appears to recognize that it

has only taken Justice Holmes’ proclamation so far, and

that further insight into when and under what

circumstances a regulation effects a compensable taking is

needed. This is especially true of temporary regulations.

Unless the Court defines "property interest” in the

temporary regulatory taking context, lower federal and

state courts may erode the constitutional principles pro-

mulgated by this Court since Pennsylvania Coal v. Mahon.

Moreover, the categorical formulation set forth in Lucas

v. South Carolina Coastal Council and the mandate for

compensation promulgated in First English Evangelical

Lutheran Church of Glendale v. County of Los Angeles will

be more difficult to apply.

Resolution of the issue presented in this Petition

will provide foundation for future courts to rely on to

determine whether temporary regulations’ effect

compensable takings. Most temporary regulations are

accomplished through the use of growth management

regulations. The government’s right to regulate property

and a property owner’s right to use its property directly

conflict when government utilizes growth management

controls such as the Moratorium. Traditional subdivision

and zoning regulations regulate use and density. Growth

management controls are three-dimensional because they

add timing to the regulation.

As a result of growth management controls,

landowners are forced to maintain the status quo for sake

of the community as whole. When there are no uses of

property regulated by growth management regulations, the

result, as in this case, may be denial of all present use of

the property. This case presents the Court with the

opportunity to define whether such loss of present use is

compensable.

Perpetuation of the constitutional protections

granted to property owners by the Takings Clause will

exist only if the "property interest" to be measured against

the loss in value is defined. The Court has never been

presented the case in which it can define the relevant

property interest. The posture of this case presents the

Court with the opportunity to finally decide the issue, an

opportunity the Court has desired since Pennsylvania Coal

I

c

19909

Mahon. in 1922.

CONCLUSION

Just as with any police power regulation, the

underlying inquiry to determine compensability under the

takings clause is whether "some people bear public

burdens which in all fairness and justice, should be borne

by the public as a whole." First English Evangelical

Lutheran Church of Glendale, 482 U.S. at 318. This Court

has painstakingly balanced those interests in promulgating

regulatory taking jurisprudence. This case is the next in

the line of cases since Pennsylvania Coal v. Mahon, in

which the Court can define a landowner’s rights under the

Takings Clause of the Fifth Amendment.

For the reasons set forth above, a Writ of

Certiorari should be granted in this case.

Respectfully submitted,

Gerald S. Duffy, #24703

Counsel of Record

Siegel, Brill, Greupner & Duffy

Attorney for Respondent

100 Washington Avenue South

1300 Washington Square Building

Minneapolis, MN 55401

(612) 339-7131

ee

APPENDIX

Findings of Fact, Conclusions of Law

and Order for Judgment dated

Boe a) | rr A 1-7

District Court’s Order denying

Defendant’s Motion for a New Trial

and/or Motion for Amended Findings of

Fact, Conclusions of Law, Order

Se SL, 5-6 cae bo bod es ee eee es A 8-

Judgment Dated March 26, 1992 ....... .. Ald4-

Judgment Dated April 2, 1992 ........... A 1/-

Findings of Fact and Order dated

April 27, 1990 denying Defendant's

Motion for Summary Judgment ........... A 19-2

Court of Appeals’ Decision .............. A 25-:

Minnesota Supreme Court Order Denying

Petition for Review of Decision of

Sg 0 eee ee rr er re A:

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF WASHINGTON rTENTH JUDICIAI

: DISTRICT

Woodbury Place Partners, a Minnesota

general partnership, File No. CO-88-3249

Plainuft,

FINDINGS OF FACT

VS CONCLUSIONS OF LAW

ORDER AND ORDER FOR

City of Woodbury, Minnesota, JUDGMENT

a municipal corporation,

Detendant.

[he above-entitled matter came on for trial before

the undersigned, the Honorable J. E. Cass, Judge of the

above-named Court, at the Washington County

Government Center, Sillwater, Minnesota, on September

27, 1991,

Anthony J. Gleekel and Christopher Penwell

appeared on behaif of Plaintiff. Pierre N. Regnier and

James G. Golembeck appeared on behalf of Defendant.

The Court, after considering the arguments of

counsel and the memoranda submitted, and based upon

all of the files, records and proceedings herein, makes the

following:

FINDINGS OF FACT

l. The parties submitted the matter to the

Court upon two sets of stipulated facts. Each party agreed

as to the accuracy of each set of facts, but objected to the

Opposing party’s set on grounds of relevancy.

r Plaintiff's set of stipulated facts focus on the

fact that Plaintiff was denied all economically viable use

of the property from March 23, 1988 to March 23, 1990,

as the result of the City of Woodbury’s enactment of a

moratorium.

3. Defendant’s set of stipulated facts focus on

the reasonableness of the moratorium enacted by the City

of Woodbury. The Court finds the reasonableness of the

moratorium to be irrelevant.

4. Plaintiff's version of the Stipulated Findings

of Fact, attached, is incorporated herein by reference.

5. Plaintitf has not unreasonably delayed

asserting a known right to the prejudice of others.

}

Based on the foregoing, the Court makes the

following:

CONCLUSIONS OF LAW

1. Plaintiff's claim is not barred by the doctrine of

—

laches.

2. The moratorium effected a compensable

temporary taking of Plaintiffs land from March 23, 1988

A-2

to March 23, 1990.

Based on the foregoing, the Court makes the

following:

ORDER

l. A peremptory Writ of Mandamus shall issue

directing Defendant City of Woodbury to commence

condemnation proceedings against Plaintiff's property

involved herein.

2. Plaintiff is awarded its costs and disbursements.

3. Robert Beedle, C. J. Kabis, and Timothy J.

McKenzie, with James L. Currell and Robert Lafayette as

alternatives in that order, each of whom is a disinterested

person and resident of Washington County, Minnesota, are

hereby appointed as Commissioners to ascertain and

report the amount of damages that were sustained by

Plaintiff as a result of the temporary taking described

herein. The first meeting of said Commissioners shall be

held in the offices of the Court Administrator of

Washington County at the Washington County

Government Center, Stillwater, Minnesota, on January 15,

1992, at 10:00 am. The compensation of each

Commissioner is fixed at the sum of $150.00 per day.

4. The Washington County Court

Administrator shall mail a copy of this Order to the

attorneys for the above-named parties by U. S. mail. Such

mailing shall constitute due and proper service of this

Order for all purposes.

Based on the foregoing, the Court makes the

following:

ORDER FOR JUDGMENT

LET THE JUDGMENT BE ENTERED

ACCORDINGLY.

The attached Memorandum is incorporated herein

by reference.

Dated: December 16, 1991 -

Filed: December 18. 1991] J. E. Cass

Judge of District Court

MEMORANDUM

Re: Woodbury Place Partners v. City of Woodbury

Court File No. C0-88-3249

Plaintiff owns property located within the City of

Woodbury (the City). Plaintiff submitted an application

for a Special Use Permit, approval of preliminary plat, and

site plan review to the City on February 16, 1988. The

application complied with all applicable zoning and

subdivision ordinances, but was inconsistent with proposed

roadway improvements. The application was revised to be

consistent with these improvements and submitted to the

City prior to March 23, 1988. The City council, pursuant

to Minn. Stat. Sec. 462.355, subd. 4, on March 23, 1988

adopted a moratorium restricting development within a

certain area, including Plaintiff's property. Although the

moratorium provided for variances, Plaintiff was twice

denied a variance from the moratorium. The moratorium

expired on March 23, 1990. Plaintiff commenced this

action on August 1, 1988. The only remaining claim is

that the moratorium effected a temporary taking of

Plaintiff's property, requiring compensation. The parties

have stipulated that Plaintiff was denied all economically

viable use of the property from March 23, 1988 to March

23, 1990, as a result of the moratorium. The parties have

also stipulated that the moratorium was reasonable and

necessary to protect the planning process and the health,

safety, and welfare of the City’s citizens.

The United States Constitution, Amendment 5 and

Minn. Const. Art. 1, Sec. 13, state that private property

shall not be taken for public use without just

compensation. A government regulation which works a

A-5

temporary taking upon property Is treated the same as if

it had been a permanent taking; the landowner is entitled

to compensation for his loss of use during the temporary

taking. First English Evangelical Church v. Los Angeles

County, 482 U.S. 304, 318 (1987). First English involved

a situation where a building moratorium was imposed due

to flooding. The court held that, assuming the

moratorium worked a taking upon the land, Plaintiff was

entitled to compensation for that temporary taking. Id. at

a7)

~/ het het

The facts of First English are very similar to those

presented here, and Plaintiff is entitled to compensation

if the moratorium constitutes a taking. There are two

Situations in which a general zoning law can effect a

taking: (1) if the ordinance does not substantially advance

legitimate state interests; or (2) if application of the

ordinance denies the owner economically viable use of his

land. Agins v. Tiburon, 447 U.S. 255, 260 (1990);

Parranto Bros. v. City of New Brighton, 425 N.W.2d 585,

590 (Minn. Ct. App. 1988). The parties have stipulated

that the moratorium, denied Plaintiff all economically

viable use of the land. Therefore, under Agins and First

English, the moratorium worked a temporary taking of the

land for which compensation is owed.

Defendant argues that there can be no taking since

the moratorium was implemented under the City’s police

power and was reasonable in purpose, duration, and

scope. It is true that the exercise of a city’s police power

can properly limit the uses to which property can be put,

but it is also true that the exercise of such police power

constitutes a compensable taking if it deprives the

property of all reasonable use. McShane v. City of

A-6

Faribault. 292 N.W.2d 253, 257 (Minn. 1980), citing Euclid

v. Amber Realty Co., 272 U.S. 365 (1926); Thompson v.

City of Red Wing, 455 N.W.2d 512, 516 (Minn. Ct. App.

1990). Constitutional protections were designed to

compensate landowners for otherwise proper interference

with their land which amounted to a taking. First English

at 315. The moratorium here, although reasonable,

deprived Plaintiff of the use of its land, for which Plaintiff

is constitutionally required to be compensated.

Dated: December 16, 1991

J. E. Cass

Judge of District Court

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF WASHINGTON TENTH JUDICIAL

DISTRICT

Woodbury Place Partners, a

Minnesota general partnership, ORDER

Plaintiff,

City of Woodbury, Minnesota,

a municipal corporation,

Defendant.

The above-entitled matter came before the

undersigned, the Honorable J. E. Cass, Judge of the

above-named Court, at the Washington County

Government Center, Stillwater, Minnesota, on January 27,

1992.

Gerald S. Duffy, W. Christopher Penwell, and

Anthony J. Gleekel appeared on behalf of Plaintiff.

Pierre N. Regnier and James G. Golembeck appeared on

behalf of Defendant.

Based on all of the files and records herein, the

Court makes the following:

l.

ORDER

Defendant’s Motion to amend and for anew

trial is DENIED.

5

a

The parties have stipulated to stay the

proceeding pending an appeal on the liability issue. A

stay of the proceedings is GRANTED as follows:

d.

Six (6) months from the date of this Order,

Defendant City shall commence

condemnation proceedings pursuant to this

Court’s Order;

Upon commencement of the condemnation

proceedings, the parties may commence

discovery on the issue of damages;

Discovery shall be completed within four (4)

months of the filing of the Minnesota Court

of Appeals decision on the issue of liability

in this matter;

The Commissioners appointed by Order of

this Court dated December 16, 1991, are

hereby discharged from their duties as

Commissioners;

Upon receipt of this Order, Commissioner

Beedle, Kavis, and McKenzie shall submit

their bill for services incurred in attending

the swearing in ceremony to Pierre N.

Regnier, Esq., 2100 Meritor Tower, 444

Cedar Street, St. Paul, Minnesota 55101,

A-9

and such bill will then be paid by

Defendant.

3 The Washington County Court

Administrator shall serve a true and correct copy of this

Order by U. S. Mail upon counsel for the above-named

parties. Such mailing shall constitute due and proper

service of this Order for all purpose.

The attached Memorandum is made a part hereof

Dy reference.

Dated: March 9, 1992

Filed: April 3, 1992 J. E. Cass

Judge of District Court

MEMORANDUM

Re: Woodbury Place Partners v. City of Woodbury

Court File No. C0-88-3249

The parties submitted the above-entitled matter to

this Court upon stipulated facts for a determination of

liability. The Court, in Findings of Fact, Conclusions of

Law, and an Order for Judgment entered on December

18. 1991. concluded that a building moratorium enacted

by Defendant effected a compensable temporary taking of

Plaintiff's land from March 23, 1988 to March 23, 1990.

Defendant has now moved for Amended Findings of Fact,

Conclusions of Law, and Order for Judgment under Minn.

R. Civ. P. 52.02 or for a new trial under Minn. R. Civ. P.

S9.

Defendant’s first claim is that the Court erred in

finding the reasonableness of the Moratorium to be

irrelevant. Defendant claims that the Court ignored First

English Evangelical Church v. Los Angeles County, 482

U.S. 304 (1987), the First English remand, First English

3rd 1353, 258 Cal. Rptr. 893 (Cal. Ct. App. 1989), cert.

denied, 107 L. Ed. 2d 950 (1990) , and all other case law

dealing with reasonable moratoria. The logic of First

English was not lost upon this Court, it states quite clearly

that a landowner is entitled to compensation for any loss

caused by a temporary taking. Id. at 318. The court in

First English did not determine under what circumstances

a temporary taking exists; it assumed there was a taking

for purposes of its decision and remanded the case to the

state court to determine if a taking had occurred. Id. at

313. First English specifically declined to determine

A-11

whether the conclusion that a temporary taking had

occurred could be avoided by establishing that the denial

of all use was protected under the State’s authority to

enact safety regulations. Id, First English recognized that

temporary takings are no different that permanent takings,

Id, at 318, and that the Fifth Amendment is designed to

require compensation for government actions which,

although proper, amount to a taking. First English does

not make an exception for moratoria which are reasonab!e

in scope or duration, although other courts, whose

decisions are not binding upon this Court, have done so.

This Court has determined that under federal and

Minnesota law, a temporary taking occurred. Defendant

has not presented any new arguments which would cause

this Court to reverse its decision.

Defendant also argues that the court was In error

when it stated that the parties had stipulated that the

moratorium denied Plaintiff all economically viable use of

the land. Apparently Defendant is referring to a

Statement in the December 16, 1991 Memorandum where

the Court did not specifically list the dates of the taking.

It is clear from the Order and accompanying

Memorandum, however, that the Court was well aware of

the fact that Defendant did so stipulate only for the time

period of March 23, 1988 to March 23, 1990. See,

Supulated Findings of Fact (Plaintiffs version) No. 47.

Defendant argues that this Court’s decision will

require government agencies to pay every time there is

any delay in issuing a permit to develop land. This

moratorium did not involve a delay in the permitting

process, however. The moratorium restricted development

of all property in the area to allow Defendant time to

A-12

complete an access improvement study, it was not in

response to Plaintiff's development request and was not a

normal delay which Plaintiff should have expected to

occur as part of a permitting process.

Defendant’s last claim is that Plaintiffs action

should be barred by the doctrine of laches. The doctrine

of laches will bar a claim if there has been an

unreasonable delay in asserting a known right which

results in prejudice to others such that it would be

inequitable to grant the relief requested. Klapmeier v.

Town of Center, 346 N.W.2d 133 (Minn. 1984). Plaintiff

here commenced an action on August 1, 1988, alleging in

Count III that the moratorium constituted a taking. This

was only four months after the moratorium was adopted

and two months after Plaintiff had been denied a variance

from the moratorium. An Amended Complaint was

served on September 19, 1989, requesting declaratory

judgment that the moratorium was invalid. No taking was

alleged in this Amended Complaint. Plaintiff filed a Note

of Issue on February 26, 1990, certifying that the case was

ready for trial. An April 27, 1990 Order of this Court

allowed Plaintiff to file an Alternative Writ of Mandamus

and Second Amended Complaint, which re-alleged the

temporary taking claim. The Second Amended Complaint

was served on April 26, 1990. The Court finds that

Plaintiff did not unreasonably delay asserting a known

right; Defendant’s Motion is denied.

Dated: March 3, 1992 a ee ea

J. E. Cass

Judge of District Court

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF WASHINGTON PFENTH JUDICIAI

DISTRICT

Woodbury Place Partners, a

Minnesota general partnership, JUDGMENT

Plaintiff. FILE NO. CO-88-3249

Citv of Woodbury, Minnesota,

a municipal corporation,

Defendant

[he above-entitled matter came on for hearing

before the Honorable J. E. Cass, Judge of the above

named Court, on January 27, 1992, at the Washington

County Government Center, Stillwater, Minnesota.

Gerald S. Duffy, Esq., Wm. Christopher Penwell,

Esq., and Anthony J. Gleekel, Esq., appeared on behalf of

the Plaintiff. Pierre N. Regnier, Esq. and James G

Golembeck, Esq., appeared on behalf of the Defendant

Based upon the files, records and the proceedings

herein, the Court made its Order

Now. Therefore, Pursuant to said Order:

IT IS HEREBY ADJUDGED, DETERMINED

AND DECREED:

l. That Defendant’s Motion to amend and for

a new trial is DENIED.

b That the parties have stipulated to stay the

proceeding pending an appeal on the liability issue. A

stay of the proceedings is GRANTED as follows:

a. Six (6) months from the date of the Order,

Defendant City shall commence

condemnation proceedings pursuant to this

Court’s Order;

) Upon commencement of the condemnation

proceedings, the parties may commence

discovery on the issue of damages;

( Discovery shall be completed within four (4)

months of the filing of the Minnesota Court

of Appeals decision on the issue of liability

In this matter;

d lhe Commissioners appointed by Order of

this Court dated December 16, 1991, are

hereby discharged from their duties as

Commissioners;

c. Upon receipt of this Order, Commissioners

Beedle, Kabis, and McKenzie shall submit

their bill for services incurred in attending

the swearing in ceremony to Pierre N.

Regnier, Esq., 2100 Meritor Tower, 444

A-15

Cedar Street, St. Paul, Minnesota 55101,

and such bill will then be paid by

Defendant.

DATED: March 26, 1992

FILED: March 26, 1992

BY THE COURT

Court Administrator

BY

Deputy

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF WASHINGTON TENTH JUDICIAI

DISTRICT

Woodbury Place Partners, a

Minnesota general partnership,

Plaintiff, JUDGMENT

FILE NO. CO-8&-3249

City of Woodbury, Minnesota,

a municipal corporation,

Defendant

Pursuant to Judge Cass's Order dated December

16. 1991 and the Order dated January 22, 1992, on file

herein,

IT IS HEREBY ADJUDGED, DETERMINED

AND DECREED:

That a peremptory Writ of Mandamus shall issue

directing Defendant, City of Woodbury, to commence

condemnation proceedings against Plaintiffs property

involved herein.

That said condemnation proceedings are hereby

Stayed pursuant to the March 3, 1992 Order of the Court

and the March 26, 1992 Judgment.

DATED: April 2, 1992

FILED: April 3, 1992

BY THE COURT

Court Admunistrato!

BY

Deputy

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF WASHINGTON TENTH JUDICIAI

DISTRICT

Douglas M. DeCoster, Steven C. FINDINGS OF FACT

DeCoster, and Woodbury Place AND ORDER

Partners, a Minnesota general

partnership, File No. CO-88-3249

Plaintiffs.

City of Woodbury, Minnesota,

a municipal corporation,

Defendants.

The above-entitled matter came on for hearing

before the undersigned, the Honorable J. E. Cass, Judge

of the above-named Court, at the Washington County

Government Center, Stillwater, Minnesota, on April 20,

1990.

Gerald S. Duffy, Esq., appeared on behalf of

Plaintiffs. Pierre N. Regnier, Esq., and James G

Golembeck, Esq., appeared on behalf of Defendant.

Based upon all of the files, records, and

proceedings herein, the Court makes the following

FINDINGS OF FACT

a That Plainuffs owned certain commercially-

zoned property on Weir Drive, Woodbury, Minnesota, at

the northwest corner of Interstate 494 and Valley Creek

Road, as of July 29, 1988, the date of the initiation of this

CASeC.

2. That Plaintiffs desired to develop this

property and submitted an application for a preliminary

plat, site plan, and special use permit (Plan A) to

Defendant City of Woodbury in February of 1988. The

Woodbury City Council tabled this application.

3. Phat Plaintiffs revised Plan A and submitted

the revised plan (Plan B) to the Woodbury Planning

Commission and Woodbury Park Commission, botk of

whom recommended approval of Plan B in April of 1988.

4. That the Woodbury City Council passed

Ordinance 1516 on March 23, 1988, pursuant to Minn.

Stat. §462.355, subd. 4, which established a moratorium on

development along Interstate 494.

5. Phat the Woodbury City Council, on June 8,

1988. tabled Plaintift pplication for a variance from

Ordinance 1516

6. That Plaintiffs filed a Summons and

Complaint on August 1, 1988, making claims that the

Ordinance and governing statute were unconstitutional;

that the Ordinance is invalid; that the moratorium did not

apply to Plaintiffs’ property; that Defendant’s actions

violated 42 U.S.C. $1983; that Defendant’s actions

A-20

constituted a taking without just compensation; and asking

for damages and abatement of real estate taxes.

ts That Plaintiffs filed an Amended Complaint

on December 22, 1989, which dropped the claims

regarding 42 U.S.C. §1983, taking, damages, and real

estate taxes. The Amended Complaint requested only

declaratory judgment regarding the remaining claims.

8. That on December 29, 1989, Plaintiffs

Steven C. DeCoster and Douglas M. DeCoster entered

into a Purchase Agreement with Plaintiff Woodbury Place

Partners. Douglas M. DeCoster immediately conveyed all

of this interest in the subject property to Woodbury Place

Partners. Steven C. DeCoster conveyed all of his interest

in the property to Woodbury Piace Partners on January 3,

1990. Neither Steven C. DeCoster nor Douglas M.

DeCoster have any interest in the property or in

Woodbury Place Partners at this time.

9. That Ordinance 1516 expired on March 23,

1990. Defendant has moved for summary judgment,

claiming that the expiration of the Ordinance has mooted

Plaintiffs’ request for declaratory judgment.

10). That Plaintiffs’ request for declaratory

judgment is moot.

11. That Plaintiffs have moved for leave to file

an Alternative Writ of Mandamus and Second Amended

Complaint, which re-asserts the 42 U.S.C. $1983, taking,

damages, and real estate taxes claims.

12 That no prejudice will result to Defendant

t A

A-2]

by allowing Plaintiffs to amend their Complaint.

Based upon the foregoing, the Court makes the

following:

ORDER

l. That Defendant’s Motion for summary

judgment is DENIED.

é That Plaintiffs’ Motion to file an Alternative

Writ of Mandamus and Second Amended Complaint 1s

GRANTED.

a That Plaintiffs’ Motion to delete Douglas M.

DeCoster and Steven C. DeCoster as Plaintiffs is

GRANTED. The new caption shall read: Woodbury

Place Partners, a Minnesota general partnership, Plaintiff,

v. City of Woodbury, Minnesota, a municipal corporation,

Defendant.

4. That the Washington County Court

Administrator shall serve a true and correct copy of this

Order by U.S. mail upon counsel for the above-named

parties, which shall constitute due and proper service of

this Order for all purposes.

h

The attached Memorandum is made a part hereof

by reference.

Dated: April 27, 1990

J. BE. Cass

Judge of District Court

A-22

MEMORANDUM

Re: DeCoster, et al. v. City of Woodbury

Court File No. CO-88-3249

The above-entitled matter came before this Court

upon Defendant’s Motion for summary judgment and

Plaintiffs’ Motion for leave to file an Alternative Writ of

Mandamus and Second Amended Complaint.

Minn. R. Civ. P. 15.01 states that a party may

amend a pleading once before a responsive pleading is

served, otherwise a pleading may be amended only by

leave of court, with such leave freely given when justice so

requires. Amendment is generally allowed unless the

party opposing the amendment can show that prejudice

will result from the amendment other than having to

defend against an additional claim. Hughes v. Micka, 130

N.W.2d 505, 510 (1964). Other factors to be considered

are the state of the proceedings, Envail v. LS.D. #704, 349

N.W.2d 593, 597 (Minn. Ct. App. 1987), citing Tomilson

Lumber Sales, Inc. v. J.D. Harrold Co., 117 N.W.2d 203,

207 (1962), and whether substantial delay will result,

Envall, citing Hughes.

Defendant claims that Plaintiffs have changed the

character of the lawsuit by asserting new claims. In

essence, Defendant is merely stating that prejudice will

result from having to defend against additional claims,

which is not an adequate basis for showing prejudice

under Hughes. Defendant also claims that undue delay

will result and that Plaintiffs’ Motion should be denied

since a Note of Issue has already been filed. The Court

finds, however, that no significant delay should occur. The

A-23

original Complaint, which made the same claims as the

Second Amended Complaint, was filed on August 1, 1988.

These were the claims which were subject to discovery for

one year, until these claims were dropped in the Amended

Complaint served on Defendant on September 19, 1989.

It appears that much of the previously conducted discovery

will be applicable to the re-asserted causes of action.

Plaintiffs’ Motion is, therefore, granted.

Defendant’s Motion for summary judgment is

denied in light of the allowed Second Amended

Complaint

Dated: April 27, 1990 ;

J. E. Cass

Judge of District Court

STATE OF MINNESOTA

IN COURT OF APPEALS

C2-92-670

Washington County

District Court #C0883249

Lansing, Judge

Woodbury Place Partners, Gerald S. Duffy

William Christopher Penwell

Respondent,

City of Woodbury,

Minnesota,

Appellant.

A-

Anthony J. Gleekel

Siegel, Brill, Greupner

Duffy, P.A.

100 Washington Avenue

Suite 1300

Minneapolis, MN 55401

Pierre N. Regnier

James G. Golembeck

Jardine, Logan & O’Brien

2100 Meritor Tower

444 Cedar Street

St. Paul, MN 55101

Robert H. Freilich

Richard G. Carlisle

&

Freilich, Leitner, Carlisle &

Shortlidge

1000 Plaza West

4600 Madison

Kansas City, MO 6411

25

t

5

-_

Carla Heyl

League of Minnesota Cities

183 University Avenue East

St. Paul, MN 55101

(Attorney for Amicus Curiae

League of Minnesota Cities)

Jay M. Heffern

Brian W. Ohm

Metropolitan Council

Mears Park Centre

230 East Fifth Street

St. Paul, MN 55101

(Attorneys for Amicus Curiae

Metropolitan Council)

Filed: November 17, 1992

Office of Appellate Courts

SYLLABUS

An interim moratorium enacted pursuant to Minn.

Stat. § 462.355 which denies an owner all economically

viable use of property for two years is not a categorical

taking under the Fifth Amendment to the United States

Constitution.

Reversed and remanded.

Considered and decided by Amundson, Presiding

Judge, Lansing, Judge, and Peterson, Judge.

A-26

OPINION

LANSING, Judge

The City of Woodbury challenges the trial court’s

determination that, on its face, an interim moratorium on

development effected a taking of property without just

compensation. We reverse and remand.

FACTS

This appeal focuses on 505,533 square feet of

unimproved land zoned for commercial use in the

northwest corner of the intersection of Interstate 494 and

Valley Creek Road in Woodbury, Minnesota. Woodbury

Place Partners purchased an undivided one-half interest in

the property, including all rights in this litigation, in

December 1987, and in January 1990 purchased all

remaining property rights. In January 1991 the

partnership conveyed its interest in the property to a third

party.

In March 1987 the City of Woodbury retained a

corporate transportation consultant to conduct an access

improvement study for I-494. Woodbury specifically

directed the consultant to analyze existing congestion

problems at the I-494 interchange at Valley Creek Road

and to assess the need and possible locations for

additional interchanges.

While the traffic flow study was pending, the

partnership proceeded on plans to develop its property.

In February 1988, the partnership applied to the city for

approvai of a preliminary plat, site plan and special use

A-27

permit for the construction of an 80,248 square foot retail

center and an 18,344 square foot office building on the

property. After discussions with city staff, the partnership

revised its development plan to accommodate the

consultant’s proposed roadway improvements.

On March 23, 1988, the city council adopted an

interim moratorium which prohibited acceptance or

consideration of subdivision approval, site plan review,

comprehensive plan amendments, or rezoning on

undeveloped areas adjacent to 1-494. Woodbury Ord. No.

1516. Conforming to the moratorium, the city council

tabled the partnership’s development applications.

Between March 23, 1988, and the moratorium’s expiration

on March 23, 1990, Woodbury twice denied the

partnership a variance.

In July 1988 the partnership brought this action

alleging an unconstitutional taking. The partnership and

the city agreed to submit the case on separately drafted

sets of stipulated facts. Stipulation 47 submitted by the

partnership states that they were denied all economically

viable use of the property from March 23, 1988, to March

23, 1990, as a result of the moratorium. Stipulations 124

and 125 submitted by the city stated that the moratorium

was reasonable and necessary to protect the planning

process and to prohibit construction which could adversely

affect road design and public health and safety.

The district court found that Woodbury’s

moratorium effected a compensable taking of the

partnership’s land from March 23, 1988 to March 23, 1990.

Proceedings to determine damages have been stayed

pending resolution of this appeal. The Metropolitan

Council and the League of Minnesota Cities have filed

amicus briefs.

ISSUE

Does a two-year moratorium enacted pursuant to

Minn. Stat. §462.355 which denies all economically viable

use of property to protect a planning process constitute a

compensable "taking" under the Fifth Amendment?

ANALYSIS

F

The Fifth Amendment’ provides that "private

property [shall not] be taken for public use without just

compensation." The essential purpose of this clause is to

‘bar Government from forcing some people alone to bear

public burdens which, in all fairness and justice, should be

borne by the public as a whole." Penn Central Transp.

Co. v. City of New York, 438 U.S. 104, 123-124, 98 S.Ct.

2646, 2659 (1978) (quoting Armstrong v. United States,

364 U.S. 40, 49, 80 S.Ct. 1563, 1569 (1960)).

The takings clause originally was applied only to

physical appropriations of property, but in 1922 Justice

Holmes recognized that regulations on property will also

be considered takings if they go "too far." Pennsylvania

Coal Co, v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160

(1922). Just how far a regulation must go before it will be

considered "too far" under the Fifth Amendment has not

been specifically denied by formula or rule. Penn Central,

438 U.S. at 124, 98 S.Ct. at 2659. Consequently, judicial

‘Although the partnership listed Article I, Section 13 of the Minnesota Constitution

in its complaint, its bnef and argument focused exclusively on federal case law

A-29

determinations have relied on ad hoc factual inquiries and

case-specific weighing of the competing public and private

interests. Id.; Agins v. City of Tiburon, 447 U.S. 255, 261,

100 S.Ct. 2138, 2141 (1980).

The Supreme Court has identified factors to guide

courts in ad hoc factual inquiries. The factors include: (1)

the economic impact of the regulation on the claimant; (2)

the extent to which the regulation has interfered with

distinct investment-backed expectations; and (3) the

character of the government regulation. Penn Central,

438 U.S. at 124, 98 S.Ct. at 2659; Connolly v. Pension

Benefit Guar. Corp., 475 U.S. 211, 225, 106 S.Ct. 1018,

1026 (1986). See Parranto Bros. v. City of New Brighton,

425 N.W.2d 585 (Minn. App. 1988) (restrictive zoning

ordinance held not a taking after applying three-factor

inquiry), pet. for rev. denied (Minn. July 28, 1988).

In addition the Supreme Court has recognized two

categories of regulatory action that constitute compensable

takings without a case-specific inquiry or balancing of

public and private interests. Lucas v. South Carolina

Costal Council, US. , 112 SA.

2886, 2893 (1992). The first occurs when regulations

compel owners to suffer physical invasion or occupation of

their property. See Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 102 S.Ct. 3164 (1982). The

second occurs when the regulation "denies all

economically beneficial or productive use of land." Lucas,

— US.at_, 112 S.Ct. at 2893.

The partnership, relying on Lucas and First English

Evangelical Lutheran Church v. County of Los Angeles,

482 U.S. 304, 107 S.Ct. 2378 (1987), maintains that the

A-30

city’s moratorium on development constitutes the second

type of regulatory action and, therefore, the partnership is

entitled to compensation without a case-specific inquiry or

balancing of public and private interests. We do not read

Lucas or First English to impose this result.

In Lucas, the property owner purchased residential

lots on the coast of South Carolina to build single family

homes. Before Lucas developed the property, the state

legislature enacted the Beachfront Management Act. The

trial court found that the Act decreed a permanent

construction ban which effectively deprived Lucas of any

reasonable use of the lots and made them valueless.

Lucas v. South Carolina Coastal Council, US.

, 112 S.Ct. 2886, 2890 (1992). On the basis of these

factual findings the Court applied the categorical rule that

"total regulatory takings must be compensated." Id. at

112 S.Ct. at 2899. -

To invoke the total takings analysis of Lucas, the

partnership relies exclusively on the stipulation that the

moratorium denied all economically viable use of the

property from March 23, 1988 to March 23, 1990.2 We

interpret the phrase "all economically viable use for two

years" as significantly different from "all economically

viable use" as applied in Lucas. The two-year deprivation

of economic use is qualified by its defined duration. In

Minnesota, moratoriums on development to aid planning

a

“In our view the sale of the remaining one-half interest in the property during the

moratonum would belie a determination of total economic inviability. However, we are

obligated to accept the stipulation for purposes of our analysis

A-31

processes cannot exceed thirty months. Minn. Stat.

§462.355, subd. 4 (1990). This is significantly different

from ‘the presumptively permanent South Carolina

regulation which imposed prohibitions on development.

That the Woodbury property’s economic viability was

delayed, rather than destroyed, is implicitly recognized in

the language of the stipulation. "[A]ll economically viable

use from March 23, 1988 to March 23, 1990" recognizes

that economic viability exists at the moratorium’s

expiration.

By narrowly defining the measurable property

interest as a two-year segment, the partnership equates its

loss of use to a "total" taking. Lucas acknowledges that

the "rhetorical force" of the "no economically viable use"

rule is "greater than its precision, since the rule does not

make clear the ‘property interest’ against which the loss of

value is to be measured." US. at _ , 112 S.Ct. at

2894 n.7. However, the Supreme Court has repeatedly

resisted attempts to narrowly define attributes of property

ownership to show total deprivation of economic use

through regulation.

In Penn Central the Court explained that:

"Taking" jurisprudence does not divide a

single parcel into discrete segments and

attempt to determine whether rights in a

particular segment have been entirely

abrogated. In deciding whether a particular

governmental action has effected a taking,

this Court focuses rather both on the

character of the action and on the nature

and extent of the interference with rights in

the parcel as a whole * * *.

A-32

438 U.S. at 130, 98 S.Ct. at 2662 (emphasis added).

Consistent with this construction, the Court declined to

find a categorical taking in Andrus v. Allard, 444 U.S. 51,

100 S. Ct. 318 (1979), when a governmental regulation

prohibited the owner from selling his property. The Court

reasoned that "where an owner possesses a full bundle’ of

property rights, the destruction of one ’strand’ of the

bundle is not a taking, because the aggregate must be

viewed in its entirety." Id. at 65-66, 100 S.Ct. at 327. This

concept was aptly characterized by Justice Stevens in his

dissent in First English: |

Regulations are three dimensional: they

have depth, width, and length, * * * It is

obvious that no one of these elements can

be analyzed alone to evaluate the impact of

a regulation, and hence to determine

whether a taking has occurred.

482 U.S. at 330, 107 S.Ct. at 2394.

We acknowledge that no case has specifically

addressed the dimension of length of time as it applies to

the totality of a taking. Nonetheless the Supreme Court’s

inclination to measure the economic burden against the

value of the property as a whole, rather than against

discrete segments, compels us to reject the partnership’s

argument. See Keystone Bituminous Coal Ass’n_v.

DeBenedictis, 480 U.S. 470, 497, 107 S.Ct. 1232, 1248

(1987).

When measured against the value of the property

as a whole, rather than against only a two-year time

A-33

frame, the moratorium did not deny the partnership “all

economically viable use" of its property. Delaying the sale

or development of property during the governmental

decision-making process may cause fluctuations in value

that, absent extraordinary delay, are incidents of

ownership rather than compensable takings. Agins v.

(1980).

Il.

First English does not change this analysis.

Although First English presented an issue dealing with the

dimension of time in the context of a regulatory taking, we

cannot apply its holding as broadly as the partnership

urges. First English essentially held that "where the

government’s activities have already worked a taking of all

use Of property, no subsequent action by the government

can relieve it of the duty to provide compensation for the

period during which the taking was effective." First

English Evangelical Lutheran Church v. County of Los

Angeles, 482 U.S. 304, 321, 107 S.Ct. 2378, 2389 (1987).

The First English court expressly declined to decide

whether a regulatory flood control ordinance prohibiting

construction or reconstruction amounted to a taking. Id

at 313, 107 S.Ct. at 2384-85. On remand the California

appellate court held that the interim "total moratorium"

ordinance was by design a temporary measure which could

not be a compensable taking. 210 Cal.App.3d 1353, 1372-

73 (1989), cert. denied, 493 U.S. 1056 (1990).

First English does not create a new liability

standard to determine when a "temporary" taking occurs,

A-34

but clarifies the appropriate remedy after a taking is

recognized. It is uncertain whether the term "temporary

taking" as employed by First English was even intended to

apply to planning moratoriums. The opinion seems to

presuppose that "temporary regulatory takings" means

‘regulatory takings which are ultimately invalidated by the

courts." 482 U.S. at 310, 107 S.Ct. at 2383. The apparent

reach of First English is to retrospectively temporary

takings (e.g., regulations subsequently rescinded or

declared invalid), not prospectively temporary regulations

such as the Woodbury moratorium.

Courts have uniformly construed the essential

holding of First English narrowly. See Guinnane v. City

and County of San Francisco, 197 Cal.App.3d 862, 869

(1987); McCutchan Estates Corp. v. _ Evansville-

Vanderburgh County Airport Auth. Dist., 580 N.E.2d 339

(Ind. Ct. App. 1991) ("[T]here is nothing in First English

which alters the established principle that the interim

burden imposed on a landowner during the government’s

decision-making process, absent unreasonably delay, does

not constitute a taking."), cert. denied., 488 U.S. 823

(1988). Because it has yet to be demonstrated that

Woodbury’s moratorium amounted to a taking; the

remedial rule of First English that "temporary" takings

must be compensated does not apply.

IV.

Woodbury’s two-year moratorium did not deny the

“Harvard Law Professor Frank Michelman has interpreted “the First English

Jecision [as] not reach|ing] regulatory enactments, even total restnctive ones, that are

expressly designed by their enactors to be temporary * * * .” Frank Michelman, Takin rs.

1987. 88 Colum. L. Rev. 1600, 1621 (1988)

partnership "all economically viable use" of their property

in the way that phrase has been conceived and applied by

the Supreme Court. Consequently, the district court's

determination that a categorical taking has occurred on

these facts must be reversed.

The three-factor inquiry of Penn Central, rather

than the categorical rule of Lucas, applies to determine

whether a compensable taking occurred. Although the

stipulations submitted by the parties shea light on the

character of the moratorium, they do not resolve the

extent to which the regulation interfered with distinct

investment backed expectations or the magnitude of the

economic impact on the partnership. Consequently, we do

not decide on this record whether a compensable taking

has occurred under the standards established in Penn

Central and Agins. This question is appropriately resolved

on remand.

DECISION

The district court erred in concluding that

Woodbury’s two-year moratorium constituted a categorical

taking. We remand to the district court for further

proceedings to determine whether the moratorium

effected a compensable taking.

Reversed and remanded.

Signed by: Judge Harriet Lansing

November 10, 1992

A-36

STATE OF MINNESOTA)

» =.

COUNTY OF HENNEPIN)

Sindy L. Campos of the City of Plymouth, County

of Hennepin, State of Minnesota being duly sworn says

that on the 16th day of December, 1992, she served the

annexed Petition for Review of the Decision of the Court

of Appeals on Robert H. Freilich and Richard G. Carlisle

by federal expressing to them two copies thereof enclosed

in an envelope, postage prepaid and by depositing same in

the post office at Minneapolis, Minnesota directed to said

attorneys at Freilich, Leitner, Carlisle & Shortlidge, 1000

Plaza West, 4600 Madison, Kansas City, Missouri 64112,

the last known address of said attorneys.

Sindy L. Campos

Subscribed and sworn to before

me this 16th day of December, 1992.

Notary Public

STATE OF MINNESOTA

IN SUPREME COURT

C2-92-670

Woodbury Place Partners,

Respondent,

VS.

City of Woodbury, Minnesota,

Appellant.

ORDER

Based upon all the files, records and proceedings

herein,

IT IS HEREBY ORDERED that the petition of

Woodbury Place Partners and the conditional petition of

the City of Woodbury for further review be, and the same

are, denied.

IT IS FURTHER ORDERED that the requests of

the Metropolitan Council and the League of Minnesota

Cities to serve and file briefs as amici curiae be, and the

Same are, accordingly denied.

Dated: January 15, 1993

Filed on January 15, 1993

BY THE COURT:

Chief Justice

A-38