2020 North Carolina Land Use Litigation
David W. Owens
School of Government
The University of North Carolina at Chapel Hill
© 2021
Below are brief digests of reported decisions regarding planning, land use, and related issues in North Carolina. State court of appeals decisions are listed first, followed by federal cases arising in North Carolina (there were no relevant state supreme court decisions). The cases are in chronological order (the more recent cases at the bottom of each list). Index terms are included in italics for each case.
North Carolina Supreme Court
PHG Asheville, LLC v. City of Asheville, 374 N.C. 133, 839 S.E.2d 755 (2020)
Special use permit; Evidence
The plaintiff appealed the city council’s denial of a special use permit for an eight-story, 185-room hotel and associated 200-space parking structure in downtown Asheville. The city’s Technical Review Committee, Downtown Commission, and Planning and Zoning Commission all recommended approval of the permit. The applicant presented three expert witnesses at the hearing, including an appraiser who testified on property value impacts and a professional engineer who testified on traffic impacts. Three citizens spoke in favor of the project and several others asked questions of the applicant’s witnesses, but none offered evidence to show the permit standards were not met. The council, however, concluded the applicant had not submitted sufficient evidence to make a prima facie case that the standards were met and denied the permit.
The court held that whether a prima facie case had been made is a question of law subject to de novo review, while the question of whether substantial evidence was in the record to support the board’s factual finding is subject to a whole record review. In this instance the applicant presented substantial evidence that the standards were met and no contrary evidence was presented. Once the applicant’s burden of production is met, the burden shifts to opponents to produce substantial evidence to the contrary. While council members asked questions about the impact of other planned hotels on property values, traffic queuing, the days of the week that traffic studies were conducted, and the impacts of a hill on sight lines at the parking entrance, no contrary evidence was presented at the hearing. The applicant is not required to rebut potential issues raised by board members that are not within the range of issues and data required by the relevant standards in the ordinance. As there were no contested facts, the council’s findings of fact were superfluous. Thus, as a matter of law the applicant was entitled to permit approval as their evidence was unchallenged and unrebutted.
The court noted the board members can rely upon their special knowledge, provided those facts are disclosed at the hearing and are relevant to the applicable standards. When an expert witness offers evidence based on studies conducted in accordance with industry standards and used standard industry data and methods in the study, and no contradictory evidence is offered, the council may not rebut that study with its lay opinion as to the adequacy of the study methods used
Town of Pinebluff v. Moore County, 374 N.C. 254, 839 S.E.2d 833 (2020)
Extraterritorial jurisdiction; Statutory interpretation
The town secured local legislation to amend G.S. 160A-360 to extend its potential extraterritorial planning and development regulation to two miles. The local legislation included a provision that the county “shall adopt a resolution” authorizing town jurisdiction upon presentation by the town of proper evidence that annexation had extended the potential ETJ area. The city contended this required county approval while the county contended this did not remove the requirement for discretionary county approval if the county was exercising zoning, subdivision, and building code enforcement in the affected area. The court applied the rules of statutory construction that disfavor an interpretation that repeals a statutory requirement by implication, that reads the statute as a whole, and that gives effect to each section of a statute. The court held the local legislation amended the state statute limiting the city to a one-mile ETJ but did not repeal the provision requiring county approval of ETJ beyond one-mile if the county had applied its zoning and subdivision regulations there.
Ashe County v. Ashe County Planning Board, 376 N.C. 1, 852 S.E. 2d 69 (2020)
Determinations; Moratoria; Vested rights
Appalachian Materials applied for a permit for an asphalt plant under the county Polluting Industries Development Ordinance (PIDO). The PIDO required buffers for regulated uses from commercial uses, schools, and health care facilities. The ordinance also mandated that all required state permits be obtained before the county permit could be issued. The county permit application stated that the required state air quality permit was pending. In response to a request from the applicant, the county planning director sent a letter stating the application met the requirements of the county ordinance and that he would make a “favorable recommendation” to issue the county permit once the state permit was obtained and final inspections were made. The county board of commissioners subsequently enacted a moratorium on asphalt plants. While the moratorium was in effect, the applicant submitted the state air quality permit. The planning director denied the application, in part based on the moratorium. The applicant appealed the denial to the planning board, which was siting as the board of adjustment. While the appeal was pending, the county board lifted the moratorium and replaced the PIDO with a new ordinance creating additional standards for the regulated uses. The planning board reversed the planning director’s decision and the county appealed that decision.
The court held the planning director’s letter was not a “final determination” that could have been appealed to the board of adjustment. It was neither “determinative” nor was it “authoritative” as it explicitly stated that there was no authority to issue a permit until all mandated conditions had been met and that those conditions had not in fact been met. As such it was nothing more than a recommendation provided at a preliminary stage of the review. Allowing an appeal of a comment on one aspect of the standards, in this case compliance with setback requirements, prior to a final decision would invite multiple, piecemeal interlocutory appeals. The remaining issues, including the completeness of the application and the effect of the moratorium, were remanded to the court of appeals for reconsideration in light of the holding on the lack of binding effect of the planning director’s letter.
North Carolina Court of Appeals
State v. Nance, 266 N.C. App. 353, 831 S.E.2d 605, review denied, 838 S.E.2d 182 (2020)
Enforcement; Nuisances
The City of Albemarle sought to have a motel that was the site of numerous criminal complaints closed as a public nuisance. The court held the complaint against the motel manager to be properly dismissed because her employment there had ended before the complaint was filed. The court held that the city’s complaint was properly dismissed because the city council had not adopted a motion to approve this particular civil action as required by the city code.
Starlites Tech Corp. v. Rockingham County, 270 N.C. App. 71, 840 S.E.2d 231 (2020)
Nonconformities
The plaintiff operated an electronics gaming business. After the business began operation, the county adopted a regulation requiring such business to obtain a special use permit and established minimum setbacks from residential land uses. The plaintiff business did not meet those new setbacks but contended it had been in continuous operation and was thus a lawful nonconforming use. The ownership of the business changed after its initial zoning approval. The county contended the change in ownership triggered the requirement for a special use permit and compliance with the new setbacks.
The court held a change in ownership is not a change in use and thus did not affect the plaintiff’s nonconforming status. While noting this was the case as a matter of law, the court also noted that the county ordinance itself did not define a change in ownership as a change in use.
Sound Rivers, Inc. v. N.C. Department of Environmental Quality, 271 N.C. App. 674, 845 S.E.2d 802 (2020), rev. allowed, 377 N.C. 215, 856 S.E.2d 99 (2021)
Standing; NPDES
The plaintiffs challenged a NPDES discharge permit for a quarry. The court held the plaintiff environmental groups had standing to challenge the permit decision under the Administrative Procedure Act. G.S. 150B-23(a) authorizes appeals by persons whose rights are “substantially prejudiced.” Members of the group owned homes and businesses along a creek that would receive twelve million gallons per day of mine wastewater and alleged that the discharge would degrade water quality in the creek if the applicable water quality standards were not met. On the merits of the claim, the court reviewed the decision under G.S. 150B-51, which is substantially similar to the judicial review of quasi-judicial development regulation decisions. The court held there was substantial evidence in the record to support the agency’s decision that the applicable permit standards were met.
Federal Cases
Currituck County v. LeTendre, 2020 WL 707179 (No. 2-19-CV-27-BO, E.D. N.C., Feb. 12, 2020)
Absention
This case involved disputes over the construction of a 15,000 square foot oceanfront structure in an area of the Currituck Outer Banks that is not accessible by public or paved roads. It was subject to several state court of appeals decisions prior to this litigation. This action for an injunction and order of abatement was initiated by the county in state court, but the plaintiff removed it to federal court on the basis of diversity jurisdiction and asserted takings, equal protection, and vested rights counterclaims against the county. When the state trial court issued enforcement injunctions and refused to stay them pending resolution of this federal case, the plaintiff sought an injunction to stay the state action and the county sought abstention by the federal court. The court exercised its discretion to decline to enjoin state enforcement action in the concurrent state case. As the court determined difficult or disputed questions of state law were not raised, it declined to abstain under Burford. Also, because the county’s motion to enfoce the prior state ruling was filed after this case was removed to federal court, the court concluded abstention under Younger was not appropriate.
Ballantyne Village Parking, LLC v. City of Charlotte, 818 Fed. Appx, 198, 2020 WL 3265007 (No. 19-1213, 4th Cir., June 17, 2020)
Ripeness, Abstention
Plaintiff owner of a parking lot and parking deck contended a building permit issued to an adjacent shopping center deprived it of various due process rights. The adjacent shopping center had secured permission to use parking places in the plaintiff’s deck to meet its minimum parking requirements under city zoning regulations. This dispute involved use of additional parking in the plaintiff’s deck for a planned expansion of office space at the adjacent shopping center. Citing several on-going legal disputes between the parties relative to this matter, the district court abstained under Burford and dismissed the case.
The court held the matter was not ripe for judicial review. The court noted two matters in addition to this federal litigation were still pending. First, the issue of whether the easement held by the adjacent shopping center allowed the additional parking was still in arbitration and that determination would be subject to judicial review in state courts. Second, the plaintiff had appealed the city’s permit decision to the city’s board of adjustment, which had stayed any action on the appeal upon filing of this federal litigation. This dispute -- the question of whether the plaintiff’s constitutional due process rights to participate in the city’s regulatory decision regarding permits to expand the shopping center -- is clearly related to the outcome of these two on-going matters. Therefore, the court lacks subject matter jurisdiction as the issue is not ripe for judicial review due to the lack of finality on the easement dispute and the permit appeal.
Currituck County v. LeTendre, 2020 WL 6750429 (No. 2-19-CV-27-BO, E.D. N.C., Nov. 17, 2020)
Interpretation
This case involved disputes over the construction of a 15,000 square foot oceanfront structure in an area of the Currituck Outer Banks that is not accessible by public or paved roads. The county permitted the structure as a single-family residence under the county unified development ordinance. The state court of appeals in 2016 held the structure was three separate buildings connected by unconditioned walkways rather than a permissible single building. While the State Building Code Council in 2015 ruled that the structure was subject to the one- and two-family building code rather than the commercial building code, the state court of appeals in 2018 held the Council’s determination was applicable to the state building code but not to the county unified development ordinance.
In 2019 the legislature amended state law to prohibit a local government from using a definition of a “building” that differs from the definitions in state statutes or in rules adopted by the State Building Code Council. The court held the 2019 legislation was a “clarification” rather than a substantial alteration of the statute. For that reason, the 2019 legislation requires that the county definition of a building in its UDO must be consistent with the Building Code Council’s interpretation that it was in fact a single building for local regulatory purposes.
