Dabbs v. Anne Arundel County
157 A.3d 381
| Md. Ct. Spec. App. | 2017Background
- Anne Arundel County imposed development impact fees under its Impact Fee Ordinance (§ 17-11) and must refund fees not expended or encumbered within six fiscal years after collection.
- Plaintiffs (Dabbs et al.) filed a class action seeking refunds of fees collected in FYs 1997–2002, challenging County accounting (including counting “encumbrances”), retroactive enactments (Bill No. 27-07), and later repeal of the refund provision (Bill No. 71-08).
- This litigation follows an earlier multi-opinion line of cases (Halle) resolving how encumbrances are counted and holding that plaintiffs had no vested right preventing the County from counting encumbrances after the six-year period.
- The circuit court found the County’s six-year accounting (including counting encumbrances per Halle and Bill 27-07), and its inclusion/exclusion of certain classroom expenditures, showed no fees were available for refund for FYs 1997–2002; it denied an accounting and other relief.
- Plaintiffs also sought $9.9 million allegedly replenished to the Impact Fee Fund (transferred from General Fund after court found prior ineligible expenditures), and argued State definitions of school capacity and federal takings/rational nexus principles precluded some fee uses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Dolan/rough-proportionality (rational nexus) test applies to legislatively imposed impact fees | Dabbs: Fee expenditures must be roughly proportional to new development’s impact; Dolan/Koontz protections apply | County: Dolan/Koontz apply to individualized exactions, not to general legislative fees/taxes | Court: Test does not apply to legislatively enacted, generally applicable impact fees; affirmed Waters Landing distinction |
| Whether Bill No. 27-07 (codifying encumbrance counting) unlawfully operated retroactively and impaired vested rights | Dabbs: Retroactive application divests vested rights and prevents refunds for completed projects | County: Bill merely codified preexisting practice and GAAP meaning of “encumbrance”; Halle precludes vesting claim | Court: Bill 27-07 did not alter law/policy or impair vested rights; Halle is law of the case; no retroactivity violation |
| Whether plaintiffs are entitled to $9.9M replenishment as refunds | Dabbs: County’s replenishment of Impact Fee Fund evidences entitlement to dollar-for-dollar refunds | County: Accounting replenishment is not a statutory refund remedy; refunds only when statute authorizes | Court: No statutory basis for dollar-for-dollar refund of replenishment; plaintiffs not entitled to $9.9M |
| Whether County must use MSDE State Rated Capacity definition for school-capacity-based fee uses and whether temporary classrooms are permissible | Dabbs: Temporary classrooms excluded from MSDE SRC so impact fees can’t fund them; State law preempts County | County: County’s capacity definition is authorized by enabling statute; no State preemption of local impact-fee scope | Court: No conflict preemption; County may use broader capacity definition and may fund temporary classrooms where authorized |
| Whether plaintiffs were entitled to an equitable accounting ordered by court | Dabbs: County records are complex and in County’s sole possession; equity accounting needed | County: Modern discovery remedies and County disclosures (six-year charts, documents) suffice | Court: Denied equitable accounting; discovery and provided records were adequate |
| Effect of Bill No. 71-08 repeal of refund provision on claims for fees collected after 2002 | Dabbs: Repeal impairs vested rights and violates Contracts/Takings clauses | County: Repeal was prospective; statutory remedies do not vest absent vested rights; claims not ripe after repeal effective date | Court: Repeal prospective; claims not ripe post-effective date barred; FYs 1997–2002 remained ripe |
Key Cases Cited
- Dolan v. City of Tigard, 512 U.S. 374 (1994) (establishes rough proportionality test for adjudicative exactions)
- Koontz v. St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586 (2013) (extends Nollan/Dolan principles to monetary exactions tied to individualized permit decisions)
- Waters Landing, Ltd. P’ship v. Montgomery Cty., 337 Md. 15 (1994) (refuses to apply Dolan to legislatively imposed development taxes)
- Anne Arundel Cnty. v. Halle Dev., Inc., 408 Md. 539 (2009) (resolves counting of encumbrances, holds plaintiffs had no vested right preventing County from counting encumbrances after six-year period)
- Sprenger v. Pub. Serv. Comm’n of Maryland, 400 Md. 1 (2007) (discusses discretionary nature of declaratory relief and standard of review)