Daily Development for
Tuesday, February 4, 1997

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

CONSTITUTIONAL LAW; TAKINGS; REGULATORY TAKINGS; VESTED RIGHTS: Enactment by legislature of requirement that all incarceration facilities must be approved by majority vote of county electorate did not constitute unconstitutional taking of property from proposed developer of such facility despite fact that developer already had PUD plan approved and such plan establish a "vested right" under Colorado statute.

Villa at Greeley, Inc. v. Hopper, 917 P.2d 350 (Colo. App. 1996).

Developer received from certain County approvals, including a specific development plan ("PUD Plan") in connection with its plan to develop a pre-parole facility. However, before Developer could begin its development, voters the County voted to require that prior to the issuance of a certificate of occupancy for pre-parole facilities, the location and siting of such facility must also be approved by a majority vote of the County electorate. The developer commenced an action based on the fact that it would be subject to delay based on this requirement, and that this legislation acted retroactively to take his property without compensation.

Colorado has a recently enacted "vested rights" statute that holds that a building permit or approved development plan of the time issued here does establish a "vested right." But the statute also provides that the "vested right" is not of Constitutional proportions. It entitles the holder only to compensation for expenditures made in reliance on the permit subsequent to its issuance, and not to the right set forth in the permit itself. Developer here had not expended any significant amounts post-permit.

But developer also argued that Colorado necessarily must recognize a "common law right to development" that could not be Constitutionally infringed. The court concluded that the statute indeed permitted the recognition of an independent common law concept of vested rights, but pointed out that the Colorado common law had held that the mere issuance of a public permit is not enough to establish such a right - there must be substantial reliance. Checkmate.

Comment: The interesting discussion for the editor is the notion that Colorado still recognizes "common law" vested rights, even after the statute has redefined the concept.

Here, since the statute also redefined the consequence of ownership of a vested right for statutory purposes, the editor concurs in the approach. Essentially there is a new "non-Constitutional" concept. But, as a matter of theory, could a state, by statute or Constitutional amendment, restrict the point at which development rights "vest?"

The Supreme Court so far acknowledged that states can determine, within some latitude, what constitutes a "vested right?" In fact, under Lucas, the Court has stated that an important measure of whether a taking has occurred is whether the regulation is aimed at a "common law" nuisance - a concept which classically has been a state common law concept. If the taking removes all use of the land or deprives the owner of "investment backed expectations and is not directed at abating a common law nuisance, it is a taking.

Within a certain latitude, apparently, state law determines what is a "nuisance." Does state law also determine what is an "investment backed expectation?" How much "tinkering" can state common law courts do with these concepts? Should there be differences among the states? And, most importantly, can the concepts be changed in any way by non common law actions such as statutes or state constitutional amendment? We're still waiting for the answer. This case likely will not provide it, but it raises the question, at least.

Comment 2: I posted this message first to the Land Use List to get some comments, and have revised this posting to reflect certain of those comments. The general drift of responses on the Land Use List appeared to be that a state could expand the definition of "vested right" for purposes of state compensation doctrine, but that the core notion of "investment backed expectation" had a minimum federal meaning that could not reduced by state law, judicial or legislative.

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