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Sunday, December 02, 2007

Ind. Courts - Federal court issues ruling on Carmel efforts to regulate gravel mining

The ILB has posted a number of entries on Carmel and Martinsville's efforts to regulate sand and gravel pits within their jurisdiction. Oral arguments were held Jan. 18th of this year before the Indiana Supreme Court in the case of City of Carmel v. Martin Marietta Materials, Inc.; a decision is pending.

In a case pending in federal court, Martin Marietta Materials v. Brainard, Judge David Hamilton issued a 35-page ruling Nov. 28th on defendant's motion for partial summary judgment:

Martin Marietta Materials, Inc. has sued the City of Carmel, the City of Carmel and Clay Township Board of Zoning Appeals (“BZA”), Carmel Mayor James Brainard, and four members of the BZA on claims relating to Martin Marietta’s current and proposed stone, sand, and gravel mining operations within Carmel city limits. Martin Marietta has asserted claims for: (1) deprivations of constitutional rights actionable under 42 U.S.C. § 1983; (2) common law breach of contract; and (3) inverse condemnation under Indiana Code § 32-24-1-16. Martin Marietta has also (4) appealed the BZA’s denial of its special use application for limestone mining. Defendants have moved for summary judgment on the breach of contract and inverse condemnation claims. As explained below, defendants’ motion for summary judgment is denied on the breach of contract claim as it applies to land that Martin Marietta’s predecessor owned when the contract was signed. In exchange for valuable property and other consideration, Carmel extended a broad promise not to “take any action” to limit, prohibit, or restrict the predecessor’s mining operations on its real estate. Carmel has not offered any persuasive reason why it should not be held to that promise. Carmel is entitled to summary judgment on the contract claim in part, however, to the extent that the claim applies to land that the predecessor did not own at the time the contract was signed. Defendants’ motion is also denied as to the inverse condemnation claim.
Discussion of the inverse condemnation claim begins at the bottom of page 25 of the opinion, and concludes on pp. 32-33:
Here, Martin Marietta had a commercial lease to mine Mueller South. It could use the land in a variety of ways, presumably including – at least in theory – as a golf course. But at the time the land was leased and Martin Marietta committed to paying millions of dollars in rent, Martin Marietta reasonably could have expected that mining Mueller South would qualify as a legal non-conforming use allowed as a matter of right. The later enactment of zoning regulations requiring Martin Marietta to apply for discretionary permits to mine Mueller South and the subsequent denial of the mining application could constitute a regulatory taking of Martin Marietta’s property rights as a lessee. The fact that Martin Marietta could still use the land to construct a golf course does not defeat the claim for inverse condemnation. The government has the authority to effect such a regulatory taking, but it also has the obligation to pay for the taking if it does.

While it is true that Martin Marietta has not been denied all income generating use of Mueller South, Martin Marietta offered evidence that the BZA has denied all profitable use of Mueller South. The court should not be understood as saying that all property owners or leaseholders are entitled either to make the most profitable use of property or to be paid compensation for the loss of such use. In this case, however, Martin Marietta has come forward with evidence that it committed millions of dollars to the mining of the Mueller South property at a time when it reasonably could have expected to be able to use the property for that purpose. The city later enacted provisions of law that have been applied thus far to prohibit that use. On this record, and as the issues have been framed, Martin Marietta has presented sufficient evidence to allow a reasonable trier of fact to conclude that the defendants have denied Martin Marietta all economically beneficial use of Mueller South. Defendants’ motion for summary judgment is therefore denied as to the inverse condemnation claim.

Posted by Marcia Oddi on December 2, 2007 04:36 PM
Posted to Ind Fed D.Ct. Decisions