Daily Development for
Friday, June 28, 1996

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

CONSTITUTIONAL LAW; TAKINGS; REGULATORY TAKINGS; MINING: Under the "diminishing asset doctrine" when quarrying is a non-conforming use, it cannot be limited to land actually excavated at the time of enactment of a restrictive ordinance as to do so would, in effect, deprive the landowner of his use of the land as a quarry. Hansen Brothers Enterprises v. Board of Supervisors of Nevada County 907 P.2d 1324 (Cal. 1996).

Prior to a 1954 ordinance restricting quarrying operations, the landowners had operated a gravel extraction and rock crushing operation on the land in question. For many years, the landowners had focussed their activities primarily on extracting river rock and gravel as it had washed down from higher reaches of the mountains. Construction of a dam had eliminated the profitability of this activity. The landowners had also done a small amount of quarrying and crushing of rock near the river, primarily to supplement their river rock activities. They had not, at least for many years, undertaken any extensive quarrying in the hillside area of their property, which was several hundred yards from the riverbed. But they now proposed to undertake such activity, filing a plan under a special law relating to mining activities. The land use agency concluded that the landowners could not extend their mining operations as proposed because such operations violated existing restrictions on quarrying. The landowners argued that they had established a vested right to quarry that predated the existing restrictions.

The California Supreme Court applied the diminishing asset doctrine as an exception to the restriction or expansion of non-conforming uses. The court held that to permit a land use ordinance to prohibit mining on land which the mine or quarry owned and intended to mine or quarry prior to the enactment of the ordinance would be todeprive the land owner of his beneficial use of the property as a mine or quarry. By the very nature of the use, expansion of mining and quarrying to other parts of landowner's land was a necessity and therefore should be deemed to be an exception to the prohibition on expansion of non-conforming uses.

The decision was a plurality decision, with two strong dissents. The fundamental disagreement was not whether the wasting asset doctrine applied at all, but rather whether it should apply to justify viewing the entire site as part of a continuous quarrying operation. . The plurality opinion upheld the landowners' claim, disagreeing with the Court of Appeals, which tended to view different elements of the quarrying operation as separate components which would be required to establish a vested rights claim separately.

A critical concurring vote, however, reserved the point of whether the quarrying operation in fact included the entire hillside. It pointed out that the critical question was whether, when the applicable land use ordinance became effective in 1954, it had established an intent to excavate the entire area "as measured by objective manifestations, and not by subjective intent." We don't know yet how this measure will satisfied in the context of a quarrying operation.

One dissenter argued that the scope of the proposed extended operation was vastly beyond anything that had gone on in the past. The plurality opinion concurred that the question of scope - just how much quarrying could go on in any given year is still open. It stated that some reasonable growth consistent with the overall nature of the business can be permitted. But it remanded for further proceedings regarding scope, since the earlier determinations on this issue had assumed that the various components of the quarrying operation could be considered separately in determining what constituted "reasonable growth." Now, for instance, in determining whether a given volume of hillside quarrying will be an expansion, the lower court will have to take into account the volume of riverbed quarrying that had occurred in the past - even though there will be no more riverbed quarrying in the future (due to the construction of the dam).

Another dissenter simply disagreed with the application of the diminishing asset doctrine to the various components of this enterprise. He argued that no precedent case had ever viewed a riverbed quarry as part of a continuing enterprise with hillside quarrying.

Note: This case is not over yet, since the dissent characterizes the proposed quarrying activity as a huge intensification, and the concurrence holds out approving the expansion pending further analysis below.

Comment: The editor is not familiar enough with the nature of quarrying operations to give a definitive opinion on whether the wasting asset doctrine ought to view river rock extraction as part and parcel of an overall mining operation that involves dynamiting hillsides, but a laymen's view would be that these activities seem sufficiently distinct that conduct of one would not normally establish a vested right to continue the other.

A California Supreme Court ruling on this issue is likely to be an influential decision both in terms of environmental balance in California and in terms of decisions of other mountain states. Note that this issue is, in theory, at least one of Constitutional proportions, and "beyond politics." Authority exists, however, to hold that quarrying activities in populated areas constitute nuisances and can be terminated under the police power notwithstanding arguments for vested rights. Could one extend the nuisance argument to make similar Constitutional analysis where the impacts of quarrying impact on neighboring lands other than health or safety impacts? Lucas left us wondering.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Laprica Mims at the ABA. (312) 988 6233.

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.