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MC Associates v. Town of Cape Elizabeth
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 89
Docket:	Cum-00-493	
Argued:	February 14, 2001
Decided:	June 15, 2001	

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.

MC ASSOCIATES

v.

TOWN OF CAPE ELIZABETH et al.

WATHEN, C.J.


	[¶1]  MC Associates (MC) appeals from a summary judgment entered
in the Superior Court (Cumberland County, Mills, J.) in favor of the Town of
Cape Elizabeth{1} on MC's regulatory takings claims.  MC argues that the court
erred by determining that its federal takings claims are not ripe and that its
property has not been deprived of all practical value.  Although the federal
claim was ripe, we affirm the judgment because MC generated no genuine
issue of material fact with respect to a taking either as a matter of state or
federal law. 
	[¶2]  The stipulated facts and procedural history of the present
dispute may be summarized as follows:  In January of 1989, MC acquired a
parcel of land located in Cape Elizabeth that it has held for future
development and sale as a single-family house lot.  In 1990, Cape Elizabeth
amended its zoning ordinance to establish protected wetland zones.  As
amended, the ordinance prohibits housing development within 250 feet of
any critical wetland zone not separated from adjacent areas by topographical
or other natural features.  In 1996, MC applied for a permit to build a single-
family residence on the property, but the application was denied because of
the property's proximity to the wetland zone.  MC requested a verification of
the wetland boundary from the Town's Planning Board, and the Planning
Board confirmed the application of the 250 foot buffer overlay on MC's
property.  MC appealed to the Town's Board of Zoning Appeals and also
requested a variance.  After a public hearing, however, the Board of Zoning
Appeals concluded that it did not have authority to hear the appeal from the
Planning Board and refused to grant the variance. 
	[¶3]  MC then initiated an 80B appeal and asserted six independent
claims including takings claims under the United States and Maine
Constitutions.  The Superior Court first ruled on the administrative appeal,
upholding the decisions of the Planning Board and the Board of Zoning
Appeals.  The Town then moved for summary judgment with regard to the
remaining counts.  The parties submitted a joint stipulation of facts and
acknowledged, among other things, that an appraiser had estimated that
MC's property was worth $88,000 as a "buildable" lot and $3000 as a "non-
buildable" lot.  Based on the stipulated facts, the Superior Court granted the
Town's motion for summary judgment.  With regard to MC's takings claims,
the court reasoned that MC's federal claims were not ripe and that MC's lot
had not been deprived of all value because it was not buildable when MC first
acquired title and because it retained some economic value.  MC appealed,
arguing that the court erred in entering summary judgment on its takings
claims. 
	[¶4]  Both the United States and the Maine Constitutions prohibit
the government from taking private property for public use without paying
just compensation.{2}  U.S. Const. amend. V; Me. Const. art. I, § 21.  The
ordinary exercise of a state's police powers, especially those relating to
environmental protection, often affects interests in realty.  The government,
however, is not required to pay a property owner every time it enacts a law
that adversely affects property interests.  As Justice Holmes explained in
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), "[g]overnment hardly
could go on if to some extent values incident to property could not be
diminished without paying for every such change in the general law.  As long
recognized some values are enjoyed under an implied limitation and must
yield to the police power."  Id. at 413.  This implied limitation, however, is
not without limits, and "if regulation goes too far it will be recognized as a
taking."  Id. at 415.  
	[¶5]  The determination of whether a particular enactment has gone
"too far" in affecting the interests of a complaining property owner
"depends largely 'upon the particular circumstances [of the] case.'"  Penn
Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978) (quoting
United States v. Cent. Eureka Mining Co., 357 U.S. 155, 168 (1958)). 
Relevant factors to be considered in the determination include "the
economic impact of the regulation on the claimant . . . , the extent to which
the regulation has interfered with distinct investment-backed expectations .
. . , [and] the character of the governmental action."  Id.  
	[¶6]  These considerations involve what are "essentially ad hoc,
factual inquiries" into the relative importance of the private and public
interests at stake.  Penn Cent., 438 U.S. at 124.  Nonetheless, and of
particular importance in the present case, there are at least two types of
regulatory action, commonly referred to as "categorical takings," that
require compensation without such case-specific inquiry: "regulations that
compel the property owner to suffer a physical 'invasion' of his [or her]
property" and those which "den[y] all economically beneficial or productive
use of land."  Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015
(1992).  
	[¶7]  In the present case, relying on the second type of categorical
taking, MC argues that, by enacting the 1990 wetlands amendments, the
Town has denied it all economically beneficial or productive use of its
property.  Because MC has the burden of proving its allegations at trial, it
must establish a prima facie case for each element of the cause of action in
order to survive the Town's motion for summary judgment.  See Champagne
v. Mid-Maine Medical Center, 1998 ME 87, ¶ 9, 711 A.2d 842.  If it is clear
that the Town would prevail as a matter of law if MC presented nothing
more than what was before the court at the hearing on the motion for
summary judgment, then the court was correct to enter summary judgment
against MC.  See id.  "A judgment as a matter of law in a defendant's favor is
proper when any jury verdict for the plaintiff would be based on conjecture
or speculation."  Id.  The Town maintains that MC has failed to establish a
prima facie case for its takings claims because MC's federal claims are not
ripe and because MC has not created a genuine issue of fact that its property
has been deprived of all value.  

I.  RIPENESS

	[¶8]  As the United States Supreme Court noted in Williamson
County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473
U.S. 172 (1985), "[t]he Fifth Amendment does not proscribe the taking of
property; it proscribes taking without just compensation."  Id. at 194.  A
property owner who maintains that his or her property has been
unconstitutionally taken has no claim if the government charged with the
taking "has provided an adequate process for obtaining compensation, and if
resort to that process 'yield[s] just compensation.'" Id. at 194-95 (quoting
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1013 (1984)) (alteration in
original).  Thus, when a state is charged with a regulatory taking, a property
owner's Fifth Amendment takings claim for inverse condemnation does not
ripen until he or she has "unsuccessfully attempted to obtain just
compensation through the procedures provided by the State for obtaining
such compensation." Id. at 195.  Accordingly, in Hamilton Bank, the
Supreme Court determined that a property owner's federal takings claims
were premature in federal court because it had not availed itself of the
state's statutory procedures for recovering for inverse condemnation.  Id. at
196-97.  Similarly, in Drake v. Town of Sanford, 643 A.2d 367 (Me. 1994),
we ordered the dismissal of the plaintiffs' federal takings claims because, on
the first day of trial, the plaintiffs stipulated to a dismissal of their state
takings claims.  Id. at 369.  In applying Hamilton Bank, we reasoned that
because the plaintiffs had dismissed their state claims, their federal claims
could never ripen.  Id.
	[¶9]  In the present case, MC has simultaneously asserted takings
claims based on federal and state law.  Relying on Hamilton Bank and Drake,
the Town maintains that the Superior Court properly disposed of MC's
federal takings claims because they are not ripe until MC shows that its state
claims for just compensation have been denied.  In essence, the Town urges
us to require MC to raise its federal claims in a separate proceeding after its
state claims have been finally decided.  If we did so, however, collateral
estoppel would likely preclude the successful assertion of the federal claims
in the subsequent action whether brought in state or federal court.  See
Madeline J. Meacham, The Williamson Trap, 32 Urb. Law. 239, 239 (2000);
Thomas E. Roberts, Ripeness and Forum Selection in Fifth Amendment
Takings Litigation, 11 J. Land Use & Envtl. L. 37, 66-67 (1995).  We
conclude that  Drake does not require such a result.  
	[¶10]  Although state takings claims must be resolved before a
federal claim arises, they need not be resolved in separate proceedings in a
state court.  As a matter of prudence, courts often address federal
constitutional issues only after resolving issues arising under the state
constitution.  State v. Cadman, 476 A.2d 1148, 1150 (Me. 1984).  Read
together, Hamilton Bank and Drake require only that Maine courts do the
same when they address takings claims premised on both federal and state
law.  The Superior Court erred, therefore, when it dismissed MC's federal
claims on the basis of ripeness.    

II. LOSS OF ALL BENEFICIAL OR PRODUCTIVE USE

	[¶11]  In this matter, the state and federal claims require the same
analysis.  The Town argues that MC has not established a prima facie case for
a "categorical taking" because it has not shown that the property has lost all
value as a result of the imposition of the wetlands amendments.  In the
context of a categorical taking, we have explained that "[t]he proper
procedure for analyzing taking questions is to determine the value of the
property at the time of the governmental restriction and compare that with
its value afterwards, to determine whether the diminution, if any, is so
substantial as to strip the property of all practical value."  Seven Islands Land
Co. v. Maine Land Use Regulation Comm'n, 450 A.2d 475, 482 (Me. 1982). 
A property owner fails to prove a categorical federal or state takings claim if
he or she fails to show that the governmental action has "rendered the
property substantially useless and stripped if of all practical value."  Wyer v.
Bd. of Envtl. Prot. 2000 ME 45, ¶ 1, 747 A.2d 192; Lucas v. South Carolina
Coastal Council, 505 U.S. 1003, 1015 (1992) (recognizing categorical taking
when regulation "denies all economically beneficial or productive use of
land").   The Town maintains that the ordinance did not render MC's
property valueless because, under previously enacted regulations, the
property was not buildable before the Town enacted the wetlands
amendments and because, based on the stipulated appraisal, the property
retains economic value.  We consider each of these arguments to determine
whether MC has generated a genuine issue of material fact regarding the
loss of all value.
  
A.
	[¶12]  The Town maintains that the lot was not buildable, under the
Town's zoning ordinance, when MC acquired title.  The zoning ordinance in
effect at that time provided that if a house is to be constructed on a
nonconforming lot of record that was created "on or before March 12,
1968," the lot "must contain . . . not less than 20,000 square feet if not to
be served by the public sewer (or otherwise meet the requirements of
Section 19-3-3 and the State Minimum Lot Size Statute 12 M.R.S.A. § 4807,
et. seq.)."  Cape Elizabeth, Me., Zoning Ordinance § 19-3-2(b)(4) (January
1989).  The parties have stipulated that the property has existed as a lot of
record since 1964, that any home constructed on MC's property will
require private sewerage, and that the lot is only 18,570 square feet in area. 
The issue, therefore, is whether MC has made a prima facie showing that its
proposed development "otherwise meet[s] the requirements of Section 19-
3-3 and the State Minimum Lot Size Statute 12 M.R.S.A. §  4807, et. seq."  
	[¶13]  The sections referred to establish environmental standards
for private subsurface waste disposal systems.  Section 19-3-3 of the Town's
zoning ordinance required that private sewage disposal systems be
"designed and constructed in accordance with the requirements" of the
Private Sewage Disposal Ordinance.  Zoning Ordinance § 19-3-3.  Section
4807-A of the State Minimum Lot Size Statute prohibits any person from
disposing of waste "from any single family residential unit by means of
subsurface waste disposal unless such lot of land on which such single family
residential unit is located contains at least 20,000 square feet."  12 M.R.S.A.
§ 4807-A (1994).  A lot smaller than 20,000 square feet "may be used for
subsurface waste disposal if approved in writing by the Department of
Human Services."  § 4807-B.

Approval shall be granted if the applicant for approval
demonstrates to the Department of Human Services that,
based upon [relevant factors], the proposed subsurface waste
disposal will not lower the water quality of or otherwise pose
a threat to any lake, pond, stream, river or tidal waters, any
underground water supply, or to the public health, safety and
general welfare.  

Id.     

	[¶14]  The parties' stipulation of fact reveals that a professional
engineer prepared a Department of Human Services Subsurface Wastewater
Disposal System Application but that the Town never approved the
application.  The engineer certified, for purposes of the DHS application,
that the proposed sewer system "is in accordance with the Subsurface
Wastewater Disposal Rules."  The Town argues, nonetheless, that the lot was
not buildable as a matter of law because section 4807-D restricts the
application of the Minimum Lot Size Statute to lots created after January 1,
1970.  The statute provides:

	This chapter as to the use of a lot for single family
residential purposes shall not apply to any lot which prior to
January 1, 1970, was specifically described as an identifiable
and separate lot either in the instrument conveying such lot
to the then owner or in a valid and enforceable agreement for
purchase and sale or was shown on a plan recorded in
accordance with law, prior to January 1, 1970 . . . . 

§ 4807-D.  The Town is correct that the statute does not apply to lots
created before January 1, 1970, and that the exception provided in section
4807-B for lots smaller than 20,000 square feet does not apply to MC's lot.  
	[¶15]  It is only the Town's ordinance, in this case, that provides an
exception to the ordinance's lot size requirements.  The ordinance adopts
the "requirements" of the State Minimum Lot Size Statute by reference, but
does not limit its applicability to lots created after 1970.  No evidence,
however, was presented concerning the lot's compliance with section 19-3-
3, and, thus, MC failed to present a prima facie case that the lot was
buildable before the enactment of the wetlands ordinance.
 
B.
	[¶16]  The Town also argues that MC has not established a prima
facie case for a categorical taking because it has not shown that the property
has lost all value as a result of the imposition of the wetlands amendments. 
Whether a categorical taking has occurred by virtue of a landowner being
deprived of all economically viable use of his or her property is a
predominantly factual question.  City of Monterey v. Del Monte Dunes at
Monterey, Ltd., 526 U.S. 687, 720 (1999).  However, the only evidence that
MC provided in the summary judgment proceedings to demonstrate the
adverse effect of the wetlands amendments on the value of its property was
an appraiser's estimate that, after the amendment, the property is worth
$88,000 as a "buildable" lot and $3000 as a "non-buildable" lot.  This
evidence does not support a finding of a categorical taking.  The appraisal
does not even purport to establish the value of the lot prior to the alleged
taking, nor does it address whether the lot retains substantial uses other
than to support a single-family residence.
	The entry is:

Judgment dismissing the federal claim vacated. 
Remanded for entry of judgment in favor of the
Town on the federal claim.  In all other respects, the
judgment is affirmed.

                                                   

Attorney for plaintiff:

Frank K.N. Chowdry, Esq., (orally)
Hopkinson, Abbondanza & Baker
511 Congress Street, suite 801
Portland, ME 04101

Attorneys for defendant:

Michael H. Hill, Esq., (orally)
John J. Wall III, Esq.
Monaghan Leahy, LLP
P O Box 7046
Portland, ME 04112-7046