Killington, Ltd. v. State of Vermont

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KILLINGTON_V_STATE.94-516; 164 Vt 253; 668 A.2d 1278

[Filed 13-Oct-1995]

NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.

No. 94-516

Killington, Ltd. Supreme Court

On Appeal from
v. Rutland Superior Court

State of Vermont and March Term, 1995
Town of Mendon

David A. Jenkins, J.
Frank P. Urso, Killington, John J. Zawistoski and Allan R. Keyes of Ryan
Smith & Carbine, Ltd., Rutland, and Michael M. Berger of Berger & Norton,
Santa Monica, California, for plaintiff-appellee

Jeffrey L. Amestoy, Attorney General, and Ron Shems, John H. Hansen
and Mark J. DiStefano, Assistant Attorneys General, Montpelier, for
defendant-appellant State of Vermont

Nancy Corsones and Christopher Corsones of Corsones & Corsones,
Rutland, for defendant-appellant Town of Mendon

Lewis Milford, Richard S. Emmet and Elizabeth R. Thagard, Montpelier,
for amicus curiae Conservation Law Foundation

Patrick W. Hanifin and Stephen S. Ostrach of New England Legal
Foundation, Boston, Massachusetts, for amicus curiae Vermont Farm Bureau
Federation

PRESENT: Gibson, Dooley and Morse, JJ., Bryan, Supr. J. and Morris, D.J.,
Specially Assigned

MORSE, J. The State of Vermont and the Town of Mendon appeal the
superior court's ruling that Killington, Ltd.'s regulatory taking claim is
ripe for litigation. Killington claims that acts and decisions by the
State and Mendon, taken individually and together, constitute a regulatory
taking of its land. The trial court granted an interlocutory appeal to
this Court on the ripeness issue. We reverse.

I. State's Actions

In 1982, Killington bought for development as a ski area 1600 acres of
land in Parker's Gore East in Mendon. The land was intended as an
extension to Killington's existing ski operation. In early 1986,
Killington applied to the District I Environmental Commission for a permit
to build a four-acre snowmaking pond on its land next to the Parker's Gore
East land. The Commission ordered Killington to submit a master plan
showing its intended development of the Parker's Gore East area.
Killington declined the request, and sought a preliminary injunction in
Rutland Superior Court to compel a merits hearing without a master plan.
The court dismissed Killington's complaint due to its failure to exhaust
administrative remedies.

Killington then appealed the Commission's master plan order to the
Environmental Board, which ordered the Commission to hold a factual hearing
on the scope of Killington's application. After hearing, the Commission
again decided that absent a master plan from Killington, the Commission
could not adequately determine the cumulative impacts of the snowmaking
pond. The Commission found that Killington intended to use the pond to
service new ski runs to be developed in Parker's Gore East. Operating
under this assumption, the Commission denied Killington's Act 250
application under criterion 8A because the project would endanger necessary
bear habitat.(FN1) In its order, the Commission indicated that it would

reconsider Killington's application if Killington showed that it had
no other viable sources of water for snowmaking and that the ski resort
would be financially jeopardized by limiting the size of its snowmaking
facilities. The Commission further noted that future applications for
development in Parker's Gore East would have to contain an impact study and
mitigation plan demonstrating that the development would not significantly
disturb the critical bear habitat.

Killington appealed to the Board for a de novo hearing under 10 V.S.A.
§ 6089(a)(3). The Board ruled initially that Killington's pond proposal
should be considered independently rather than as a part of a future ski
development of Parker's Gore East. The Board concluded, nevertheless, that
the pond would impact wildlife resources in Parker's Gore East. It found
that Parker's Gore East contains a rare stand of beechnut-producing trees,
a wetland area, and other trees that sustain twenty to thirty black bears,
and that the pond would destroy the wetland and imperil the
beechnut-producing trees, compromising a necessary bear habitat.

The Board then denied Killington's application under criterion 8A,
finding that (1) Killington presented no credible evidence of public
benefit to outweigh the public loss; (2) Killington lacked mitigation
proposals for the replacement of lost wetlands and the preservation of the
beechnut-producing trees; and (3) Killington failed to demonstrate its lack
of acceptable alternative sites for snowmaking facilities. Killington
appealed the Board's decision to this Court, and we held that the Board's
findings supported its conclusions. In re Killington, Ltd., 159 Vt. 206,
216-17, 616 A.2d 241, 248 (1992).

In November 1986, Killington filed a second Act 250 application with
the Commission, this time seeking to harvest timber on approximately 700
acres of land above 2500 feet in Parker's Gore East. The Commission found
that although the logging project would comply with criteria 1-7 and 9-10,
it would endanger necessary bear habitat, triggering analysis of criterion
8A and its subcriteria. The Commission concluded that Killington could log
Parker's Gore East if it implemented mitigation measures to protect the
bears' food source and travel corridor; otherwise, the permit was denied.

On appeal, the Board affirmed the Commission's finding that the
logging operation threatened the bear habitat, and denied the application
because Killington had not provided either a master plan for the operation
or any mitigation proposals. The Board indicated that it would reconsider
the application if Killington provided information as to the timing of the
operation, the size and shape of the clear cuts, the location of the cuts,
and the identification of trees that would be retained. Killington did not
appeal the Board's decision, nor did it provide the Board with the
requested information.

In July 1993, Killington sought a permit to extend the construction
completion date for snowmaking facilities on ski trails already located in
Parker's Gore East. The snowmaking facilities had been approved in three
permits issued before the Commission and Board determined that a necessary
wildlife habitat existed in the area, but apparently Killington had not
begun construction of the permitted snowmaking facilities. Noting that the
Board had found Parker's Gore East to contain a necessary bear habitat, the
Commission ruled that Killington could construct snowmaking facilities in
that area only if Killington prohibited skiing on trails there after April
1 of every year. The condition was not acceptable to Killington, and
consequently the permit was denied. No appeal was taken to the Board.

Killington brought the present action in August 1993. Killington
claims that previous decisions by the Commission, Board, and this Court bar
Killington from using the land for its only reasonable, economically viable
use -- skiing. Consequently, Killington seeks monetary compensation from
the State and Mendon under the takings clause of Chapter I, Article 2 of
the Vermont Constitution.(FN2) The State and Mendon moved to dismiss the
case pursuant to V.R.C.P. 12(b)(1) and (6), arguing that the court lacked
subject matter jurisdiction because Killington's

claim was not ripe, and that Killington had failed to state a claim
upon which relief could be granted. Killington filed a motion for summary
judgment. The trial court denied the motions.

Whether a regulatory takings claim resulting from an Act 250 denial is
ripe for litigation must be determined by the two-part test set out in
Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172
(1985). See In re Sherman Hollow, Inc., 160 Vt. 627, 630, 641 A.2d 753,
756 (1993) (mem.) (citing Williamson for proposition that regulatory
takings claims are not ripe for review until applicant has obtained final
decision). The first part requires the plaintiff to have obtained a final
decision regarding the application of the government regulations to
plaintiff's property. Williamson, 473 U.S. at 186; see also In re Pelham
North, Inc., 154 Vt. 651, 652, 578 A.2d 124, 124 (1990) (mem.)
(Environmental Board's decision voiding land use permit is not ripe until
Board finally disposes of subject matter). The second part tests whether
the plaintiff has utilized state procedures for obtaining just
compensation. Williamson, 473 U.S. at 186. It is undisputed that by
initiating this action, Killington is utilizing state procedures for
obtaining just compensation. Therefore, we need address only the finality
requirement of the Williamson test.

In Williamson, a developer claimed that the county zoning commission's
denial of his application for a residential subdivision constituted a
regulatory taking. The Court held that the developer's claim was not ripe,
reasoning that because the developer had not pursued available variances,
the Planning Commission had not rendered a final, reviewable decision. Id.
at 193-94. The Court stated that a final decision must be one that
"conclusively determine[s] whether [the developer] will be denied all
reasonable beneficial use of its property." Id.

Likewise, in Penn Central Transp. Co. v. New York City, 438 U.S. 104
(1978), the owners of Grand Central Station sought a permit from the New
York City Landmarks Preservation Commission to construct a fifty-five-story
office building above the existing facade of Grand Central Station. The
Commission denied the application, but left open the possibility

of future development by the owners. In rejecting the owners' takings
claim as unripe, the Supreme Court reasoned that because the owners had not
sought "approval for the construction of a smaller structure, we do not
know that appellants will be denied any use of any portion of the airspace
above the Terminal." Id. at 136-37.

Here, the Commission and the Board have indicated that,
notwithstanding the Board's designation of Parker's Gore East as critical
bear habitat, once reasonable mitigation measures are implemented,
commercial skiing would be permitted in the area. Further, the Board did
not unconditionally deny either Killington's application to log in the area
or its application to build a snowmaking pond on adjacent land. Instead of
submitting a master plan or a mitigation proposal regarding these
applications, Killington elected to bring this lawsuit. By doing so, it is
prematurely asking the superior court to speculate as to whether viable
economic and productive use of its property has been denied. See Southern
Pacific Transp. Co. v. City of Los Angeles, 922 F.2d 498, 504 (9th Cir.
1990) (ripeness doctrine is intended to avoid courts speculating as to what
possible proposals plaintiffs might have filed with government and how
government might have responded to those imaginary applications); see also
Hoehne v. County of San Benito, 870 F.2d 529, 533 (9th Cir. 1989)
(plaintiff in takings action bears "high burden" of proving that final
decision has been made).

Killington claims, however, that previous decisions by the Board and
this Court render any additional administrative proceedings futile. We
disagree. In an analogous case, Southview Assocs. v. Bongartz, 980 F.2d 84
(2nd Cir. 1992), a developer sought to build a 33-unit subdivision near
Stratton and Jamaica, Vermont. During Act 250 proceedings, the Board
discovered that the proposed development was situated within a 280-acre
deeryard. The Board denied the application, but indicated that a
reapplication containing appropriate mitigation measures would be accepted.
Rather than reapply, the developer, like Killington here, filed a takings
claim. The Second Circuit found that the developer's claim did not satisfy
the Williamson requirements, and dismissed the developer's futility
argument because the Board had

left the door open to less intrusive development of the property. Id.
at 99; see American Savings & Loan Ass'n v. County of Marin, 653 F.2d 364,
371 (9th Cir. 1981) (takings plaintiff has "heavy burden" of showing that
compliance with local ordinances would be futile). In its findings here,
the Board indicated that it would permit Killington to log in the Parker's
Gore East area if Killington adopted available mitigation measures.
Moreover, while refusing to extend Killington's prior permit for snowmaking
facilities in the area, the Commission indicated that snowmaking facilities
would be permitted in Parker's Gore East if Killington agreed to prohibit
skiing there after the first of April. Killington, however, did not
satisfactorily mitigate its development plans to minimize impacts on
critical areas of the bear habitat. Much like the developer in Southview,
Killington suffers from an "our-way-or-no-way" attitude.(FN3)

Killington seeks to distinguish Southview by pointing out that almost
all of its Parker's Gore East land is above 2500 feet and thus will be
subject to Act 250 review regardless of how it seeks to develop the land.
In rejecting the developer's claim in Southview that a final decision had
been made regarding its property, however, the Second Circuit noted that it
was likely that some development would be permitted "even if Southview
proposes development that requires further Act 250 review." Southview, 980 F.2d at 99.

Killington responds by contending that any permit application would
fail under criterion 8A even if it adopted the Board's suggestions.
Killington believes that because the Board has previously determined that
the proposed developments violate 8A's public benefit subcriteria, the
Commission would reject any future application by Killington no matter what
mitigation measures were offered. Killington misunderstands the impact of
mitigation undertakings. If

Killington were to adopt mitigation measures reducing or eliminating
the environmental harm posed by its earier proposals, the economic and
recreational benefit of a new proposed development might well outweigh any
negligible impact on the bear habitat. But Killington has elected not to
institute mitigation measures recommended by both the Board and the
Commission. Until the Commission and Board have had an opportunity to rule
on an application addressing those mitigation measures and to determine
conclusively the extent to which development will be permitted in the area,
the superior court is without jurisdiction to review Killington's takings
claim. See Southern Pacific, 922 F.2d at 502 (if takings claim is unripe
because plaintiffs have failed to obtain final and authoritative
determination of type and intensity of development legally permitted on
subject property, court lacks subject matter jurisdiction, and complaint
must be dismissed).

II. Mendon's Actions

As noted previously, Killington acquired the Parker's Gore East land
in 1982. Shortly thereafter, Killington sought the Mendon Planning
Commission's approval to construct alpine ski runs and lifts on that
property. In April 1983, the Planning Commission approved such a proposal.
Later that year, however, the Mendon Zoning Board of Adjustment denied
Killington's application for the necessary permits to construct a
two-triple-chairlift system and snowmaking facilities, reasoning that the
proposed project would be incompatible with the existing residential and
agricultural uses designated by the then-current zoning ordinance.
Killington withdrew its appeal of that decision, and the project was never
started.

In June 1990, Mendon adopted a new zoning ordinance that limited all
activity in Parker's Gore East over 2500 feet to forestry and noncommercial
recreational uses. Town of Mendon Zoning Ordinance § 529 (1990).
Killington never applied for a zoning permit to build the ski area under
the new ordinance, nor did it seek a variance authorized under § 350 of the
zoning ordinance and 24 V.S.A. §§ 4464, 4468. In April 1994, after
Killington filed this

action, Mendon amended its zoning ordinance to permit commercial
skiing in part of Parker's Gore East.(FN4)

Killington challenges Mendon's zoning regulations. Zoning regulations
may be challenged as a taking either on their face or as applied to an
owner's property. See Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 494-95 (1987); Southern Pacific, 922 F.2d at 502-03. A facial
taking means that the mere adoption of land use regulations constitutes a
taking of the property. J. Shonkwiler and T. Morgan, Land Use Litigation §
3.01 (1986). A facial challenge is ripe for judicial review upon the
adoption of the regulation. Id. When the regulation is challenged as
applied to the property, the focus of the claim is on how the
administration of the regulation impacts the property. Id. An
"as-applied" challenge is not ripe for review until the property owner has
sought administrative relief through government procedures. Id.

Killington argues that because it is making a facial challenge to
Mendon's zoning regulations, the ripeness issue is moot. See Southern
Pacific, 922 F.2d at 507 (ripeness doctrine applicable to as-applied
challenges). Had Killington sought merely to invalidate the regulation, we
might agree. Killington's request for monetary relief, however, is
inconsistent with a facial challenge to the ordinance. See Weissmann v.
Fruchtman, 700 F. Supp. 746, 753 (S.D.N.Y. 1988) (facial challenges are
primarily for benefit of society and normally result in injunctive or
declaratory relief). Because Killington seeks monetary damages from an
application of the zoning ordinance to its property in Parker's Gore East,
we agree with Mendon that Killington is challenging the 1990 regulations as
applied.

Killington contends that a facial attack is merely "one made by a
plaintiff who claims that there is no way the legislation can be applied to
him that passes constitutional muster." Even

assuming we accepted this definition, Killington cannot claim that
Mendon's 1990 zoning ordinance could never be applied to Killington in a
manner that would permit productive use of its property. The ordinance
contains a variance procedure that could have permitted development of the
land, but Killington never availed itself of that procedure. By the same
token, Killington cannot claim that Act 250's criterion 10, which requires
that permit applications be in compliance with local zoning ordinances,
precluded any possibility of it obtaining an Act 250 permit for development
of its Parker's Gore East property that was above 2500 feet.

Having concluded that Killington is challenging Mendon's zoning
ordinance as applied, we consider the ripeness of that claim. Killington
claims that Mendon's 1990 zoning ordinance deprived it of all practical use
of the Parker's Gore East land. Since 1983, however, Killington has not
sought permits from Mendon for any use of the land. Killington's only
actions have involved its Act 250 applications, in which the Commission and
Board specifically found Killington's proposed projects to be in compliance
with local zoning ordinances. To have a ripe takings claim against Mendon,
Killington must first exhaust all of its administrative remedies, including
variance procedures. Williamson, 473 U.S. at 187-88; accord Houston v.
Town of Waitsfield, ___ Vt. ___, ___, 648 A.2d 864, 867 (1994) (takings
argument not ripe where plaintiff failed to seek variance). Since 1983,
Killington has not pursued any administrative remedies with Mendon.
Consequently, Killington's taking claim against Mendon is not ripe.

Killington contends, however, that Mendon's 1983 denial of its
application to build a ski area in 1983 amounts to a taking of its
property. We reject Killington's attempt to bootstrap a ten-year-old
unappealed decision into its argument that Menden's 1990 zoning ordinance
and the State's Act 250 decisions have effectively taken its property.
Killington's belated use of the 1983 decision in its takings claim carries
little weight. First, Killington failed to appeal that decision. Cf.
Hinsdale v. Village of Essex Junction, 153 Vt. 618, 627, 572 A.2d 925, 930
(1990) (24 V.S.A. § 4472(b) allows plaintiff to attack constitutionality of
zoning ordinance without appealing zoning board's decision to superior
court, but this exception does not authorize

collateral constitutional attack on application of ordinance to
particular facts). Second, Killington failed to seek a variance under the
1990 zoning ordinance or, for that matter, to file any permit application
with the town in the ten years between the decision and its takings suit.
The project-specific 1983 decision, which was made under a substantively
different ordinance, has little, if any, relevance to Killington's takings
suit. The decision did not preclude Killington from seeking a variance
later based on its response to resource management concerns in Mendon's
1990 ordinance. See In re Application of Carrier, 155 Vt. 152, 158, 582 A.2d 110, 113 (1990).

III.

"A court cannot determine whether a regulation has gone `too far'
unless it knows how far the regulation goes." MacDonald, Sommer & Frates
v. County of Yolo, 477 U.S. 340, 348 (1986). At this point, the superior
court would have to speculate on the nature and extent of permitted
development in Parker's Gore East because there has been no final
determination on those issues. Indeed, the actions and decisions of Mendon
and the State suggest that less intensive development that is sensitive to
critical areas and resources within the bear habitat would be permitted.
Contrary to Killington's claims, the Board's findings and decision indicate
that bears and people can coexist under certain circumstances,
circumstances that appear to be feasible given the nature of Killington's
enterprise. Rather than explore those possibilities, Killington has
prematurely filed a takings claim before a definitive final decision has
been rendered determining allowable property uses. Once such a decision is
rendered, assuming Killington persists with its takings claim, a court can
determine if the permitted uses are economically viable. Until that time,
the superior court is without jurisdiction to hear the claim.

Reversed and remanded.

FOR THE COURT:

____________________________________
Associate Justice

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Footnotes

FN1. Criterion 8A states:

A permit will not be granted if it is demonstrated by any party
opposing the applicant that a development or subdivision will destroy or
significantly imperil necessary wildlife habitat or any endangered species,
and

(i) the economic, social, cultural, recreational, or other benefit
to the public from the development or subdivision will not outweigh the
economical, environmental, or recreational loss to the public from the
destruction or imperilment of the habitat or species, or

(ii) all feasible and reasonable means of preventing or lessening
the destruction, diminution, or imperilment of the habitat or species have
not been or will not continue to be applied, or

(iii) a reasonably acceptable alternative site is owned or controlled
by the applicant which would allow the development or subdivision to
fulfill its intended purpose. 10 V.S.A. § 6086(a)(8)(A)

FN2. Chapter I, Article 2 of the Vermont Constitution reads as
follows: "That private property ought to be subservient to public uses when
necessity requires it, nevertheless, whenever any person's property is
taken for the use of the public, the owner ought to receive an equivalent
in money."

FN3. Amicus curiae American Federation of Farmers states that
Killington did not invite the bears onto its land, and, comparing the bears
to the cable box on Ms. Loretto's roof, see Loretto v. Teleprompter
Manhattan CATV Corp., 458 U.S. 419, 436 (1982) (installation of cable
equipment was permanent physical taking), argues that a physical taking has
occurred, in which case Killington need not meet the ripeness test.
Neither common sense nor case law supports this argument. The hallmarks of
a physical taking are "absolute exclusivity of the occupation, and absolute
deprivation of the owner's right to use and exclude others from the
property." Southview Assocs. v. Bongartz, 980 F.2d 84, 93 (2d Cir. 1992).
Neither of these requirements is met here. Cf. id. at 94-95.

FN4. Because we conclude that Killington's claim against Mendon is
not ripe, we find it unnecessary to address the effect of Mendon's 1994
amendments to its zoning regulations on Killington's takings claim. We do
not decide whether Mendon's 1990 regulations constituted a temporary
taking.

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