Message to Town Boards: Don't Deviate From Your Rules of Procedure

(February 22, 2007)

In 2003, a dispute arose between Douglas M. Robins and the Town of Hillsborough when the Town adopted a moratorium (and later amended its zoning ordinance), which effectively denied Robins’ pending application for approval to construct and operate an asphalt plant.  On January 26, 2007, after appeals to state superior court and the court of appeals, the North Carolina Supreme Court rendered its decision in Robins v. Town of Hillsborough.  The Court held that when a town board deviates from its own ordinances and procedural rules, an applicant is not only entitled to have his or her application reviewed, but also to have it reviewed under the ordinance and procedural rules in effect at the time the application was filed.    

Robins contracted to purchase a parcel of land within Hillsborough’s extraterritorial jurisdiction in January of 2003.  He intended to install an asphalt plant on the site and the parcel was appropriately zoned “general industrial.” After contracting to purchase the land, Robins submitted an application for approval of his site specific development plan to the Town Board of Adjustment (“BOA”) on January 21, 2003.  The first BOA hearing to consider Robins’ plan took place on February 12, 2003 and additional hearings occurred in March and April.  In April, consideration of the application was once again continued.  Eight days before the next BOA hearing, the Town Board of Commissioners (“Town Board”) adopted a moratorium, which suspended the review and issuance of permits for, among other facilities, asphalt plants.

Robins was then notified that, pursuant to the moratorium, the hearing to consider his application was cancelled.  In November of 2003, the Town Board adopted an amendment to the Town’s Zoning Ordinance that expressly prohibited asphalt plants and similar facilities in the Town and its extraterritorial jurisdiction.  This amendment extinguished Robins’ opportunity to have the BOA review his application and consider it for approval.  Shortly thereafter, Robins challenged the Town’s actions in Superior Court.  The trial court granted summary judgment in favor of the Town, determining that the enactments of the moratorium and amendment were lawful and that Robins was not entitled to the review of his application under the pre-moratorium ordinance.  Robins appealed that decision to the N.C. Court of Appeals.

In a split decision, the Court of Appeals concluded that Robins was entitled to the review of his application under the pre-moratorium ordinance and reversed the trial court’s ruling.  In its analysis, the Court of Appeals noted that Robins had the right “to rely upon the language of the ordinance in effect at the time he applied for the permit” and “[t]o hold otherwise would allow compliance with regulations and permitting to become a moving target to ever changing revisions and amendments.”  In her dissent, Judge Jackson contended, among other things, that Robins had no vested right, either by statute or by common law, to construct an asphalt plant on that property and, therefore, was not entitled to review under the pre-moratorium ordinance.

On the basis of a dissent in the Court of Appeals, the Town appealed the majority’s decision to the N.C. Supreme Court.  The Court began its analysis by stating that neither statutory nor common law vested rights concerns applied to this case because “our vested rights decisions have considered whether a plaintiff has a right to complete his project despite changes in the applicable zoning ordinances.”  Instead, the Court looked to its decision in Humble Oil & Refining Co. v. Board of Alderman, which held that, pursuant to its own procedural rules, the town board was bound to refer applications for special permits to the town’s planning board prior to granting or denying any application.  284 N.C. 458, 202 S.E.2d 129 (1974).  In reaching that decision, the Humble Oil court opined that a town board’s adherence to its own procedural rules is the only way an applicant can be “accorded due process and equal protection” and, conversely, the only way a town board can “refute a charge that [its actions] constituted an arbitrary and unwarranted discrimination against the property owner.”

With the teachings of Humble Oil in mind, the Robins court focused on language in Hillsborough’s own Zoning Ordinance and the Board of Adjustment’s own Rules of Procedure, finding that relevant portions provide that the BOA shall hear and rule upon applications for site specific development plans.  Moreover, according to its own rules, the BOA must make its decision in a timely fashion, which is, at the latest, “not more than thirty (30) days from the date of the last hearing of the matter under consideration.”  With these self-imposed requirements at the forefront of its consideration, the Court reiterated its words in Humble Oil:  “The procedural rules of an administrative agency are binding upon the agency which enacts them as well as upon the public . . . .  To be valid the action of the agency must conform to its rules which are in effect at the time the action is taken.”   

While the Court acknowledged that town boards are generally comprised of layman who cannot reasonably be held to the same standards as judicial bodies, it simultaneously asserted that those boards, when acting in a quasi-judicial capacity, may not omit any essential element of a fair trial.  Among those essential elements, decisions of town boards (1) must be supported by competent, material, and substantial evidence introduced at a public hearing and (2) must not be arbitrary and capricious.  The Court found that the Town Board’s enactment of the moratorium and amendment circumvented the BOA’s own procedural rules, leaving the Court with no decision to review and the Town with no defense to Robins allegations that its actions were arbitrary and capricious.  Accordingly, the Court determined that Robins was entitled to have the BOA review his application under the zoning ordinance in effect at the time he filed his application and to render a decision supported by competent findings of fact.

The Robins opinion highlights a number of key points for local governments concerned with creating and enforcing land use regulations as well as private persons and entities endeavoring to comply with those regulations.  First and foremost is that counties, municipalities, and cities must comply with their own ordinances and procedures to avoid becoming vulnerable to claims that actions are arbitrary and capricious.  Second, given that North Carolina courts will hold local boards to conformity with their ordinances and procedures, localities should analyze their regulations and rules to ensure that they are appropriately tailored to local interests and goals.  Finally, individuals, businesses, and other entities seeking to establish and protect their own interests should:  (a) educate themselves on the specific requirements and rules governing the particular approval sought and the process for receiving that approval, and (b) recognize that the sooner a complete application with appropriate supporting materials is submitted, the more protection the applicant has from changes in land use regulation.

For questions regarding this Zoning and Land Use Alert or assistance in other land use matters, please contact Robin Currin at 919.783.2810 or rcurrin@poynerspruill.com or Andrew Petesch at 919.783.2813 or apetesch@poynerspruill.com.