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Court Denies Constitutional Challenge to Village Zoning Regulation

2004-1145. Jaylin Investments, Inc. v. Moreland Hills, 2006-Ohio-4.
Cuyahoga App. No. 82739, 157 Ohio App.3d 277, 2004-Ohio-2689. Judgment affirmed.
Moyer, C.J., Resnick, Lundberg Stratton, O'Connor and Lanzinger, JJ., concur.
Pfeifer and O'Donnell, JJ., dissent.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2006/2006-Ohio-4.pdf

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(Jan. 11, 2006) The Supreme Court of Ohio today denied a developer's constitutional challenge to a local zoning ordinance that prevented the developer from building homes on half-acre lots in an area with a specified minimum lot size of two acres.

In a 5-2 decision authored by Justice Evelyn Lundberg Stratton, the Court affirmed a 2004 ruling by the 8th District Court of Appeals that Jaylin Investments, Inc. was not entitled to a declaratory judgment voiding an ordinance of the Village of Moreland Hills that limits new construction in areas of the village zoned for single-family homes to a minimum lot size of two acres. The Cuyahoga County Common Pleas Court had previously ruled the lot-size restriction unconstitutional as applied, and had ordered Moreland Hills to allow Jaylin to proceed with its proposed development.

Jaylin filed a proposal with the Moreland Hills Planning Commission to develop an 18-acre hillside property the company had acquired within the village limits. The site was zoned U1 for single-family homes. The Owl Ridge proposal called for Jaylin to build 29 single-family homes on lots of approximately a half-acre. The village rejected the plan based on the zoning code's requirement of a two-acre minimum lot size for new homes.

Jaylin did not seek a zoning variance, or claim that enforcement of the existing zoning constituted a ‘taking' of its property. The company filed a civil action in Cuyahoga County Common Pleas Court seeking a declaratory judgment that the provision of the village zoning code imposing the minimum two-acre lot size was unconstitutional as applied to Jaylin's proposed use of the Owl Ridge site. The company presented testimony by developers and real estate appraisers who stated that the close proximity of many smaller homes on smaller lots made Jaylin's property unsuitable as a setting for an isolated cluster of a few higher-priced estate-type homes appropriate for two-acre lots. In light of that testimony, and the exclusively residential zoning of the area, Jaylin argued that enforcement of the two-acre requirement under the specific facts of this case was an unreasonable restriction on their right to use their property that advanced no compelling public purpose.

The village filed pleadings and presented testimony defending the zoning restriction. It argued that enforcement of the minimum lot size restriction was necessary to protect surrounding land and the nearby Chagrin River watershed from potential environmental damage that would be caused by the construction process and future occupants of a subdivision with the density of the Owl Ridge proposal. Jaylin challenged the credibility and a number of factual assertions made by the village's environmental expert, and pointed to a number of provisions in the Owl Ridge development plan that it said were specifically designed to anticipate and avoid or fully mitigate the potential environmental threats cited by the village.

The trial court ruled in favor of Jaylin, citing a lack of credibility of the village's expert and specific environmental precautions included in the Owl Ridge plan and holding that the lot size requirement was unconstitutional as applied to the facts of this case. On review, the 8th District Court of Appeals reversed the trial court, holding that the village zoning ordinance was valid and enforceable to bar Jaylin from proceeding with the Owl Ridge development as proposed.

In today's decision, the Supreme Court affirmed the 8th District's finding that the trial court erred by focusing primarily on the specifics of Jaylin's particular plot of land and the Owl Ridge development plan in determining the constitutionality of the disputed zoning restriction. Writing for the majority, Justice Stratton agreed with the court of appeals' analysis that “the focal point of the constitutional analysis is the ordinance at issue, not the owner's proposed use of the property.”

Justice Stratton wrote that “Jaylin advocates an inverse analysis, i.e., that if the proposed use meets the government's legitimate goals underlying the zoning, a municipality may not prohibit it. This does not accurately state the issue. In a constitutional analysis … (t)he zoning ordinance is the focal point … not the property owner's proposed use, and the analysis begins with a presumption that the ordinance is constitutional.”

“If we were to modify this rule as Jaylin advocates,” wrote Justice Stratton, “we would effectively eliminate the initial presumption that the zoning is constitutional. Opposing parties would merely argue over who presents the better use of the property.” She noted, however, that proposing a “better” use of the property does not address whether the current zoning is constitutional. Quoting from the Supreme Court's 1974 holding in Mobil Oil Corp. v. Rocky River , Justice Stratton said the correct test is “‘whether the ordinance, in proscribing a landowner's proposed use of his land, has any reasonable relationship to the legitimate exercise of police power by the municipality.' The challenge must focus on the constitutionality of the ordinance as applied to prohibit the proposed use, not the reasonableness of the proposed use.”

In deciding constitutional challenges of this type, Justice Stratton wrote, courts should recognize the primary authority of local legislative bodies to determine land-use policy, and should follow the Supreme Court's 1998 holding in Goldberg Cos. v. Richmond Hts. that zoning regulations should be presumed constitutional absent a showing that “the ordinance was ‘clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare' as applied to the owner's property.”

Applying Goldberg and other precedents to this case, she wrote that “we agree with the appellate court that Jaylin failed to demonstrate, beyond fair debate, that the two-acre-minimum zoning ordinance was arbitrary and unreasonable or substantially unrelated to the public health, safety, morals or general welfare of the community, as applied to prohibit Jaylin's proposed use.”

Justice Stratton's opinion was joined by Chief Justice Thomas J. Moyer and Justices Alice Robie Resnick, Maureen O'Connor and Judith Ann Lanzinger.

Justice Terrence O'Donnell entered a dissent, joined by Justice Paul E. Pfeifer, in which he noted that the trial court heard substantial environmental evidence and evaluated conflicting expert testimony, and cited portions of that testimony in support of its conclusion that the two-acre minimum lot size was not a “reasonable” restriction as applied to Jaylin's proposed development plan. “Despite this careful attention to detail, the appellate court challenged the trial court's findings and, in my view, substituted its judgment for that of the trial court,” wrote Justice O'Donnell.

Justice O'Donnell also stated that, in holding that the trial court should not have focused on Jaylin's specific plans to address the village's environmental concerns, “today's majority decision, for all practical purposes, renders trials on proposed developments meaningless. Consider the impact of today's decision as an affirmation of the appellate court's view of the law: i.e., to consider only whether the ordinance in question satisfies the government's concerns for the environment, not whether the proposed development can meet that goal. On these facts, a two-acre, three-acre, four-acre or even five-acre minimum would meet the government's objective of environmental protection.”

Justice O'Donnell concluded that “(e)xcising consideration of the developer's proposed development from consideration by the fact finder shifts the focus of a trial to a determination only of whether the local government zoning meets its objective and thereby effectively omits any meaningful consideration of how or whether a proposed (development) plan also meets those objectives. It therefore renders trials all but meaningless.”

Sheldon Berns, 216.831.8838, for Jaylin Investments, Inc.

Leonard A. Spremulli, 216.831.4935, for Village of Moreland Hills.