Security Management Corp. v. Baltimore County

WILNER, Chief Judge. Appellant is upset that its property, located in the Loch Raven watershed in Baltimore County, is included in the county’s RC-4 resource conservation zone and therefore is limited in its development potential. It claims that inclusion of its property in that zone is unconstitutional for a variety of reasons. We find no merit to its assertions and shall therefore affirm the judgment of the Circuit Court for Baltimore County dismissing its complaint.

THE COUNTY ZONING LAW Pursuant to the Constitutional and statutory authority vest-' ed in it as a chartered county, Baltimore County has enacted laws governing planning and zoning in the county. The county law provides two methods of rezoning: quadrennial comprehensive rezoning and individual reclassification. Every four years, the existing zoning on all land in the county is reviewed. The process begins with a review of the zoning regulations and maps by the county Planning Board, which makes, a preliminary report to the County Council.

Any recommended changes in the zoning regulations or maps are included in that report. Through public hearings, interested citizens are then afforded an opportunity to comment on and object to the preliminary recommendations. Following those public hearings, the Planning Board submits to the Council a final report, including proposed zoning regulations and maps. The public then has three months in which to raise issues before the Council; the Planning Board has another month thereafter to make its comments.

Finally, after one or ²³⁷ more public hearings, the County Council, by ordinance, adopts regulations and maps. See, in general, Baltimore County Code, §§ 26-123—26-125. In addition to this quadrennial comprehensive rezoning, the County Code allows individual landowners to petition the County Board of Appeals for a reclassification of their properties. Baltimore County Code, § 2-356.

A reclassification, being in derogation of the legislative determination made in the most recent comprehensive rezoning, is normally dependent upon a showing either that the existing classification was a “mistake” or that there has been a sufficient change in circumstances since the last comprehensive rezoning to warrant the requested reclassification. In 1976, as part of the comprehensive zoning process, the County Council created four resource conservation zones. In creating those zones, the County Council found, generally, that development in the rural areas of the county had been taking place at an increasing rate and without the framework of a land use plan or other planning components; that, as a result, the development “has formed very undesirable land use patterns,” that a significant amount of “urban sprawl” was occurring along highways in the rural areas as tracts immediately fronting along the highways were “lotted off;” and that such development was detrimental in a number of respects, including the loss of “critical watershed areas.” Among the stated purposes of these zones were discouragement of the then-existing land use patterns, creation of a framework for orderly development, provision of “suitable” areas for rural-suburban development, protection of natural and man-made resources from the compromising effects of development, protection of areas desirable for more intensive future development by regulating undesirable forms of interim development, and conservation of land and water resources. The four resource conservation zone created as part of the county zoning—agricultural (RC-2), deferral of planning and development (RC-3), watershed protection (RC-4), and rural-residential (RC-5)—still exist.

The land at issue here is, and ²³⁸ since 1976 has been, in the RCM zone. The specific purpose of that zone, as set forth in the Baltimore County Zoning Regulations (BCZR § 1A03.1), is to provide for the protection of water supplies of metropolitan Baltimore and neighboring jurisdictions by preventing contamination through unsuitable types or levels of development in their watersheds. Although there have been amendments to the BCZR governing the RC-4 zone since 1976, the maximum gross density allowed for that zone has remained fixed—0.2 dwelling units per acre, i.e., one house for every five acres. BCZR § 1A03.4B.

As an alternative to that number of dwelling units, however, the zoning regulations provide for certain other uses permitted either by right or by special exception. Included among the uses permitted by right are farms, public schools, and transit facilities; included among the uses permitted by special exception are antique shops, camps, community buildings, churches, restaurants, and offices. THE ISSUES In 1974, appellant, a Maryland corporation in the business of developing and managing real estate, acquired through stock acquisition and merger a 391-acre tract, of which the 215-acre parcel at issue here was a part. At some point, the other 176 acres were rezoned to DR-3.5 (Density Residential—3.5 dwelling units per acre) and developed into a residential community known as Hunters Run.

In 1992, during the comprehensive zoning process, appellant submitted to the County Council a petition requesting that the Council rezone the remaining 215 acres from RC-4 to DR-16 (Density Residential—16 dwelling units per acre) and BL (Business-Local). Under the plan submitted with the petition, appellant proposed to build approximately 3,000 units, including townhouses, multi-family homes, and elderly housing. Under the current RC-4 zoning, apart from the other uses permitted of right or by special exception, appellant would be able to build only 43 dwelling units, which could be clustered. ²³⁹ In its petition, appellant asserted that the community would be phased in over a 15-year period, at the rate of 200 units per year, that it would be an “environmentally sensitive” community meeting all applicable environmental requirements, that it was in accord with the county master plan, that the public school system was adequate to accommodate children from the proposed community, and that it would actually improve water quality in the area. Notwithstanding these assertions, some of which are conclusory in nature, the Council denied appellant’s petition and left the property in the RC-4 zone.

In April, 1993, appellant filed the complaint leading to this appeal, alleging that the Council’s refusal to rezone the property in the manner it had requested violated appellant’s Federal and State Constitutional rights. Specifically, it urged that it was being denied equal protection and substantive due process in contravention of the Fourteenth Amendment, 42 U.S.C. § 1983 , and Md. Decl. of Rts., art. 24, and that retention of the property in the RC-4 zone constituted a “taking” within the meaning, and in violation, of the Fifth and Fourteenth Amendments, 42 U.S.C. § 1983 , and art. Ill, §§ 40 and 40A of the Maryland Constitution. Upon motion by the County and by People’s Counsel, who had intervened in the case, the court dismissed the complaint for failure to state a claim on which relief could be granted.

In October, 1993—prior to entry of the order dismissing the complaint—appellant filed a petition with the Board of Appeals for a reclassification of the property. It then sought, and obtained, a postponement for the asserted purpose of submitting a revised plan. As of the date of oral argument before this Court, in February, 1995, appellant had neither submitted a revised plan nor requested further consideration by the Board of its initial petition, which is still pending. DISCUSSION Introduction As noted, appellant has raised a number of discrete Constitutional issues, which we shall discuss.

At oral argument, ²⁴⁰ those arguments essentially coalesced into the assertion that, if a person buys property that he believes will eventually be in the path of development and it later turns out that the property is in the path of development, he has a Constitutional right to have the property rezoned in order that he may develop it as he wishes. That is not the law. Before addressing the particular Constitutional challenges raised by appellant, we shall consider briefly appellees’ argument that they are all premature because appellant has failed to exhaust an available administrative remedy, i.e., consideration of its petition for reclassification, which it deliberately had postponed. Appellant, of course, contends that, under Patsy v. Board of Regents, 457 U.S. 496 , 102 S.Ct. 2557 , 73 L.Ed.2d 172 (1982) and its progeny, it is not required to exhaust administrative remedies when pursuing a claim under 42 U.S.C. § 1983 .

Appellees rejoin that (1) that doctrine applies to alleged violation of individual, personal rights and not to zoning cases, and (2)' in any event, the case is premature under the “ripeness” doctrine. These are interesting questions, but, as they are not really jurisdictional in nature, we shall pass over them. We believe that there is utterly no merit to the substance of appellant’s arguments, and we shall affirm on that basis. For purposes of this appeal, therefore, we shall assume, although we do not hold, that appellant was not required to pursue its petition for reclassification to conclusion before filing this lawsuit.

Taking Claims Appellant makes both a procedural and a substantive complaint with respect to its “taking” claim. First, it avers that, “[except in unusual cases,” a court should not dismiss a constitutional claim for a taking of property where the complaint raises “complicated factual issues concerning the Appellant’s actions and justifications for denying a zoning reclassification.” Naturally, it contends that its complaint in fact raises such complicated issues. Substantively, it argues that the proper test for determining whether State regulation constitutes a “taking” is whether the regulation reasonably advances ²⁴¹ legitimate State interests or denies an owner “economically viable use of his land.” See Nollan v. California Coastal Comm’n, 483 U.S. 825, 834 , 107 S.Ct. 3141, 3147 , 97 L.Ed.2d 677 (1987). Keeping in mind that this appeal arises from the granting of a motion to dismiss, rather than a summary judgment or judgment entered after trial, we need to look at, and confine ourselves to, the allegations in the complaint.

They are sparse, indeed. After alleging how and when appellant acquired the property, the fact that it filed a petition for rezoning, and that it “documented” all the nice things it says about the planned community, appellant avers that, “[njotwithstanding its earlier rezoning and/or permitting of development of rural and/or resource conservation properties adjacent to or in close proximity to The Property and notwithstanding the appropriate and beneficial use to which [appellant] planned to put The Property, The Council ... denied [appellant’s] request to change the zoning ... from EC-4 to DR-16 and BL.” In Counts V and VI, based respectively on the Fifth Amendment and the Maryland Constitution, appellant contends that a taking has resulted “due to the fact that, without proper rezoning, [appellant] has been denied the economically viable use of the Property and has suffered substantial diminution in its investment-backed expectations as owner of such property.” The only addition to this explanation is in Count VII, based on the Fourteenth Amendment, where it claims that the County’s action was arbitrary and capricious. Taking these allegations as they are, it is clear that no Constitutional taking has been adequately alleged. Nor have any “complicated factual issues” been alleged sufficient to make a motion to dismiss inappropriate.

We reject as absurd the contention that the creation of an RC-4 zone, as defined in the BCZR, and the inclusion within it of property in an important metropolitan watershed do not substantially advance a legitimate State interest. The purpose of the zone is set forth in the ordinance creating it; we ²⁴² are aware of no case—and none has been cited to us—holding that the conservation of watersheds and the limitation of development in those watersheds is not a legitimate State interest. Whether, to achieve that purpose and protect that interest, particular land in a watershed should remain free from intensive development is quintessentially a legislative judgment call. The issue, really, is whether continued inclusion of the property in the low-density zone deprives appellant of a Constitutionally-protected right.

In Baltimore City v. Borinsky, 239 Md. 611 , 212 A.2d 508 (1965), the Court adopted a strict and exacting standard in this regard, holding, at 622: “If the owner affirmatively demonstrates that the legislative or administrative determination deprives him of all beneficial use of the property, the action will be held unconstitutional. But the restrictions imposed must be such that the property cannot be used for any reasonable purpose. It is not enough for the property owners to show that the zoning action results in substantial loss or hardship.” (Emphasis added). Appellant urges that, under more recent Supreme Court pronouncements, that is no longer the test.

It seizes upon the articulation in Nollan v. California Coastal Comm’n, supra, 483 U.S. 825 , 107 S.Ct. at 3142-43 ; Keystone Bituminous Coal Ass’n v. De Benedictis I, 480 U.S. 470 , 107 S.Ct. 1232 , 94 L.Ed.2d 472 (1987); Lucas v. South Carolina Coastal Council, — U.S. -, 112 S.Ct. 2886 , 120 L.Ed.2d 798 (1992); and Dolan v. City of Tigard, — U.S.-, 114 S.Ct. 2309 , 129 L.Ed.2d 304 (1994), that a regulation may constitute a taking if it denies the owner of “economically viable use of his land.” At least implicit in its argument is that it is possible for an owner to be denied the economically viable use of his land even though he is not denied “all beneficial use.” The simple and most direct answer to this assertion is that appellants have overlooked the important modifier “all.” In Lucas , the Supreme Court made clear that the standard was whether the regulation “denies all