270 P.3d 864
Ariz. Ct. App.2012Background
- Arizona voters enacted Prop 207 (Private Property Rights Protection Act) in 2006, creating compensation rights for land-use restrictions enacted after the Act's effective date.
- Sedona's 1995 Land Development Code prohibited short-term rentals of residential property, creating a preexisting restriction on use, lease and sale rights.
- Sedona Grand owned a residential property in Sedona and used Option Agreements to facilitate sales; City asserted these Options violated the 1995 SLDC ban on short-term rentals.
- In 2008 the City enacted the Short-Term Vacation Rental Enforcement Ordinance providing criminal enforcement for rentals of less than 30 days, with expansive definitions of 'transient,' 'rental,' and 'short-term vacation unit.'
- Sedona Grand sued under the Act, seeking compensation for diminished rights; the trial court held the Ordinance is a land use law and addressed the exemption under § 12-1134(B)(1) but remanded on the factual record.
- The Arizona Court of Appeals held the Ordinance is a land use law and that the public health and safety exemption does not apply as a matter of law; remanded for evidentiary proceedings on principal purpose and the status of the Options under the SLDC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Ordinance a land use law under the Act? | Sedona Grand: Ordinance restricts land use and thus falls within Act. | City: Ordinance is an exempt health/safety regulation, not a land use law for compensation purposes. | Yes; Ordinance is a land use law regulated by the Act. |
| Does the health and safety exemption apply on the face of the Ordinance? | Exemption should not apply without proof of principal health/safety purpose beyond mere language. | Ordinance proclaims health and safety aims and thus satisfies exemption. | No; exemption cannot be applied as a matter of law without evidence of principal purpose beyond legislative assertion. |
| If the Ordinance expands beyond the preexisting SLDC, is it subject to the Act for the expanded restrictions? | Expanded restrictions beyond the 1995 SLDC should be reviewed under the Act for compensation. | If it mirrors preexisting prohibitions, it may not be compensable. | The Act applies to portions representing more severe restrictions than those in existence as of December 7, 2006. |
Key Cases Cited
- State v. Watson, 198 Ariz. 48 (App. 2000) (reliance on health/safety nexus required for exemptions is not self-evident here)
- Smith v. Beesley, 226 Ariz. 313 (App. 2011) (distinguishes self-evident health/safety nexus from non-self-evident purposes)
- Zamora v. Reinstein, 185 Ariz. 272 (1996) (statutory interpretation guidance for material meaning)
- In re MH XXXX-XXXXXX, 220 Ariz. 160 (App. 2008) (statutory interpretation framework for appellate review)
- Orme Sch. v. Reeves, 166 Ariz. 301 (1990) (standard for evaluating summary-judgment and statutory interpretation)