Summary of a Recent
Judicial Development in
Water Law

Facial Challenge to Township's Moratorium Was Ripe for Adjudication
and Farming Partnership Had Standing to Challenge

L. Paul Goeringer
National AgLaw Center Research Associate

Summary of Decision

In V. Jacobs & Sons v. Saginaw County Department of Public Health, 284 F. Supp. 2d 711 (E.D. Mich. 2003), the District Court for the Eastern District of Michigan held that the plaintiffs had standing to challenge alleged procedural and substantive due process claims and takings claims against the defendants because of a water-well drilling moratorium. The court also found that issues were ripe for adjudication under a facial challenge to the well moratorium, but were not ripe under an "as applied" challenge and would be subject to the rule of finality.

Background

On January 6, 2001, V. Jacob & Sons (Partnership) entered into a fifteen-year lease agreement with the owners of a parcel of land in Marion Township (Township) to grow potatoes on their property. Id. at 714. In order to grow potatoes, the Partnership needed a permit to drill a new deep-water well to guarantee the necessary water. Id. On May 1, 2000, the Township had adopted a moratorium that prohibited the issuance of new permits for water wells. Id. Jerry Jacobs, a partner in the Partnership, applied for a water well permit on September 24, 2002, and the application was denied on October 8, 2002. Id. The Partnership appeared before the Township's Board of Trustees to request that the moratorium be lifted so the Partnership could obtain a permit to drill its water well. Id. The Board of Trustees chose to extend the moratorium and refused to lift it. Id. The Partnership filed this action claiming a violation of procedural and substantive due process rights and an uncompensated taking of private property. Id. at 714.

Arguments

The Township argued that the Partnership lacked standing to sue the Township. Id. at 715. The Township argued that the lease was between the landowners and the Partnership, and the drilling permit was in the name of "Jerry Jacob" and made no mention of the partnership. Id. at 716. Because the Partnership was not named in the permit application, the Township argued that the Partnership had failed to allege any "injury personal to it" and was asserting the rights of another and did not have standing. Id. Finally, the Township argued that the claim was not ripe for adjudication, because the Partnership had failed to receive a final decision from the Department of Health or the Township, and that the Partnership had failed to follow the appropriate state inverse condemnation procedures before filing in federal court. Id. at 716-17.

The Partnership argued that it was asserting its own legal rights by executing a lease agreement, pursuing a water well permit, being denied the permit, and trying to have the moratorium against drilling lifted. Id. at 716. Finally, the Partnership argued that there is a distinction between facial challenges and as applied challenges to land use regulations. Id. at 717. In this case, the Partnership argued it was bringing a facial challenge to the moratorium and not required to receive a final decision from the agency in charge. Id.

Analysis and Holdings

The district court found that the Partnership did have standing to challenge the moratorium. Id. at 716. The Partnership had suffered an injury that was fairly traceable to the water well drilling moratorium, and if the moratorium was not in place, the Partnership was not likely to suffer further injury. Id. Clarifying the issue of whether the Partnership was asserting rights of another, the court explained that the Partnership was asserting its own legal rights and interests. Id. The Partnership had executed the lease, unsuccessfully applied for a well permit, and tried to get the moratorium lifted. Id. The Partnership also presented an affidavit of Gerald Jacobs, who had signed the lease and the permit application, asserting that he was acting as an agent for the Partnership and in his role of co-partner when he signed the documents. Id. The court found that the Partnership had successfully met the standing requirements.

The court recognized that there are two types of challenges to land use regulations. Id. at 717-18. An "as applied" challenge is subject to the rule of finality. Id. at 718. The rule of finality requires that "the government entity charged with implementing the ordinance has reached a final decision regarding the application of the ordinance to the property issue." Id. A facial challenge is not subject to the rule of finality, because the challenge is attacking the existence or enactment of the regulation itself. Id. The court found the Partnership was challenging the very existence of the well moratorium, and not the moratorium as it applied to the Partnership. Id. Because the challenge was facial, the court found that the claim was ripe for review. Id.

Finally, the court found that any "as applied" challenge would not be ripe for review, and would require the Partnership to exhaust state law remedies. Id. The court directed the Partnership to amend its pleadings in order to show that the challenge was a facial challenge to the well moratorium, and to give the Township fair notice of the claims it was being called upon to defend. Id. at 718-19.

The case was decided on September 11, 2003.