State v. B. Tollie
408 Mont. 129
| Mont. | 2022Background
- Flathead County created the Egan Slough Zoning District (ESZD) in 2002 with agricultural-use regulations (80-acre minimum lots; industrial uses prohibited). In 2016–2018 proponents sought to expand the ESZD to include ~530 adjoining acres that contained a developing water‑bottling facility.
- Weaver family entities formed Montana Artesian and, beginning in 2014–2018, obtained permits, built a facility and equipment, secured a DNRC water appropriation permit (710.53 acre‑ft, priority date 2015), and completed the final Wholesale Food Manufacturing license after the ESZD expansion vote.
- A citizen initiative (Initiative 17‑01) passed June 5, 2018 (≈70% approval), enacting Resolution 1594C to expand the ESZD; the expanded zoning became effective June 21, 2018.
- County planning staff investigated and issued an Enforcement Decision (Jan. 4, 2019) concluding Montana Artesian’s facility was a lawful nonconforming use limited to the manner and extent of use and permits in place; further expansion would be subject to ESZD Section 14.4.
- Litigation followed: Egan Slough Community sought mandamus/declaratory relief (challenging operation); Montana Artesian attacked initiative validity and raised due process, equal protection, takings, reverse‑spot zoning, discovery, and fee issues. The District Court issued multiple summary‑judgment orders; the Supreme Court affirmed on all issues.
Issues
| Issue | Plaintiff's Argument (Egan Slough Community) | Defendant's Argument (Mont. Artesian / County) | Held |
|---|---|---|---|
| 1. Validity of Montana Artesian’s nonconforming use | The plant was not an operating/producing bottling use on 6/21/2018 and so cannot continue beyond the actual pre‑zoning activity | The facility (building, permits, equipment, test runs) existed and was being lawfully developed before 6/21/2018; §14.3 and §14.1 preserve permitted/under‑construction uses and limit continuation to manner/extent of existing permits | Affirmed: plant is a legal nonconforming use; continuation limited to manner/extent established by pre‑existing permits and Section 14.4 governs expansion |
| 2. Initiative invalid under Sandholm (affects < entire county) | Sandholm bars initiative/referendum to affect only part of a local government (analogy to special improvement districts) | Zoning is legislative and subject to initiative; Sandholm (SID context) is inapplicable because SIDs differ from zoning and zoning implicates countywide public welfare | Affirmed: Sandholm inapplicable; initiative valid |
| 3. Statutory defects in initiative form (enact & repeal; failure to set out ordinance; single‑subject) | Initiative improperly both repealed and enacted; did not fully set out Resolution 1594B; legislated multiple subjects and bypassed Part 1 procedures | Statutes read together permit an initiative to repeal and enact; petition sufficiently described the resolution to be repealed; initiative’s single subject was expansion of the ESZD | Affirmed: initiative satisfied §7‑5‑132 requirements and single‑subject rule |
| 4. Initiative exceeded Board authority / bypassed planning commission | Expansion must follow Part 1 statutory prerequisites (public interest; 60% owners) and involve planning commission recommendations | Expansion is within legislative power of the Board and thus within electorate’s initiative power; expansion simply subjects added land to existing ESZD regulations (no repeal of existing regs) | Affirmed: initiative did not exceed Board authority |
| 5. Reverse spot‑zoning / special legislation | Expansion was targeted to eliminate Montana Artesian and thus is reverse spot zoning / special legislation | Expansion extended an existing agricultural zone to contiguous acreage; complied with Growth Policy and affected many landowners; not designed to single out one parcel | Affirmed: no illegal reverse spot zoning; expansion consistent with Growth Policy and not special legislation |
| 6. Discovery motion to compel external communications | Proponents’ outside communications would show improper motive/fraud and are relevant | Court allowed depositions on motive; further external communications would be cumulative and duplicative | Affirmed: District Court did not abuse discretion denying additional discovery |
| 7. Procedural due process & equal protection | Ballot and initiative misled voters (omitted that lots didn’t meet 80‑acre rule and prior Board denial), and left zoning power to whim of voters | Ballot fairly described subject, restrictions, and nonconforming parcel exception; initiative is direct legislation, not unconstitutional delegation | Affirmed: ballot satisfied due process; equal protection claim failed |
| 8. Regulatory takings (water right & business value) | ESZD limits (e.g., 50% building expansion cap) prevent full use of 710.53 acre‑ft water permit and reduce business value — compensable | Water rights are limited by beneficial use and distribution capacity; permit protects only the amount the owner can put to beneficial use; zoning did not appropriate nor oust property or prevent beneficial use | Affirmed: no compensable taking; regulation not functionally equivalent to appropriation; Knight (inverse condemnation) inapplicable |
| 9. Attorney fees under Foy (defending mandamus) | Mandamus claim was frivolous and Montana Artesian is entitled to equitable fees | The County’s enforcement actions were unresolved at time; mandamus claim prompted investigation and was not frivolous | Affirmed: District Court did not abuse discretion denying Foy fees |
Key Cases Cited
- Russell v. Flathead County, 314 Mont. 26, 67 P.3d 182 (Mont. 2003) (assessing whether a nonconforming use was impermissibly expanded by a subsequent owner)
- City of Shelby v. Sandholm, 208 Mont. 77, 676 P.2d 178 (Mont. 1984) (holding referendum not permissible to repeal a special improvement district that covers less than entire city)
- Little v. Bd. of Cty. Comm’rs of Flathead Cty., 193 Mont. 334, 631 P.2d 1282 (Mont. 1981) (three‑part test for spot/reverse‑spot zoning)
- Helena Sand & Gravel, Inc. v. Lewis & Clark Cty. Planning & Zoning Comm’n, 367 Mont. 130, 290 P.3d 691 (Mont. 2012) (applies Little framework to reverse spot zoning)
- Plains Grains L.P. v. Bd. of Cty. Comm’rs of Cascade Cty., 357 Mont. 61, 238 P.3d 332 (Mont. 2010) (on assessing prevailing uses vs. zoning in spot‑zoning analysis)
- Greens at Fort Missoula, LLC v. City of Missoula, 271 Mont. 398, 897 P.2d 1078 (Mont. 1995) (distinguishing special improvement districts from zoning and noting community‑wide effects of zoning)
- Williams v. Bd. of Cty. Comm’rs of Missoula Cty., 371 Mont. 356, 308 P.3d 88 (Mont. 2013) (zoning must promote public health, safety, welfare)
- Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (U.S. 1978) (Penn Central regulatory‑takings balancing test)
- Kafka v. Mont. Dep’t of Fish, Wildlife & Parks, 348 Mont. 80, 201 P.3d 8 (Mont. 2008) (Montana takings framework applying Penn Central factors)
- Knight v. Billings, 197 Mont. 165, 642 P.2d 141 (Mont. 1982) (inverse‑condemnation context; not controlling for regulatory takings here)
- City of Eastlake v. Forest City Enters., Inc., 426 U.S. 668 (U.S. 1976) (initiative is direct legislation and not per se due‑process violation)