In a recent decision, In re Champlain Oil Co., Inc. Conditional Use Application, Docket No. 200-10-09 Vtec, the Vermont Superior Court’s Environmental Division (formerly, the Vermont Environmental Court) determined that a proposed three-way gasoline station, retail (convenience) store, fast-food restaurant use was allowed in the Town of Ferrisburgh’s Highway Commercial (HC) Zoning District, notwithstanding that neither “convenience, retail” nor “drive-in facility” was specifically listed as a permissible use in the HC District, and the Town’s Zoning Bylaws contained language stating that “any use not expressly permitted in a district is prohibited in that district.”

The Court reasoned that because “retail store” and “restaurant” were permissible uses in the HC District, and the proposed “convenience, retail” and “drive-in facility” uses were sub-categories or “components” of the more broadly defined uses, they were also allowed in the District. The Court reached this conclusion even though “convenience, retail” and “drive-in facility” were separately defined uses under the Zoning Bylaws.

With regard to the proposed “convenience, retail” use, the Court stated that the mere fact that this use was separately defined in the Bylaws “does not demonstrate the intent to prohibit them in the HC District, particularly when the broader category of ‘retail stores’ is explicitly permitted.” The Court further observed that “[i]f the drafters intend to prohibit convenience stores in the HC District, they must do so with more clarity . . . Merely defining “convenience, retail” in the Bylaws does not give a landowner fair notice that convenience stores are prohibited in the HC District, especially when retail stores are expressly permitted.”

Similarly, regarding the proposed “drive-in facility” use, the Court stated that “there is no indication that a restaurant may not include a drive-in facility. The mere fact that the drafters defined drive-in facilities in the Bylaws is not sufficient, in our judgment, to demonstrate the intent to prohibit drive-in facilities at restaurants in the HC District, especially since restaurants are expressly permitted.” The Court’s decision notes that “[i]f the drafters were inclined to prohibit restaurants from utilizing drive-in facilities, they could have done so expressly, much like what was done to prohibit retail stores from incorporating drive-in facilities” (the Bylaws defined “retail store” as any business that rents or sells products or commodities, “excluding any drive-in facility”). Since no such explicit exclusion was used to define restaurants, the Court concluded that it had no authority to prohibit drive-in facilities in connection with a proposed restaurant use.

This decision should serve as a warning to communities to use care in defining the uses that are allowed in a particular zoning district, to specifically identify prohibited uses, and not to rely too heavily on “any use not expressly listed is prohibited” language as the sole regulatory basis for excluding a use, even where that use is separately defined in the Bylaws.

This decision also contains an extensive discussion regarding the development of so-called "split lots." For further information regarding this decision, please contact Joe McLean.

On June 17, 2010, the U.S. Supreme Court handed down an unanimous decision in City of Ontario, California v Quon (Slip Op. No. 08-1332), holding that the city’s review of an employee’s text messages on a city-owned pager was reasonable and, thus, did not violate the 4th Amendment of the United States Constitution. The 4th Amendment states: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures shall not be violated . . . .” It is well established that 4th Amendment prohibitions against unreasonable search and seizure apply not only in a criminal context, but also when the Government acts in its capacity as an employer. Treasury Employees v. Van Raab, 489 U.S. 656, 665 (1989).

In 2001, the City of Ontario issued text enabled pagers to members of its police department to help facilitate communications in emergency situations. A year after the pagers were issued, the police department decided to review whether or not the monthly character limit was too low, and whether officers were being asked to pay for work related messages, or if the overages were personal messages. Upon reviewing two months worth of Quon’s messages, the department discovered that many were personal and of a sexual nature. The ensuing Internal Affairs investigation determined that Quon had violated Department rules and he was disciplined. In response, Quon and others sued the Department under 42 U.S.C. §1983 for violations of their 4th Amendment rights and the Stored Communications Act (18 U.S.C. §2701 et seq.).

In determining that the search was reasonable, the Court “assumed” as part of its analysis that Quon had a reasonable expectation of privacy in the text messages. The Court then utilized the analytical framework developed in O’Connor v Ortega, 480 U.S. 709 (1987), holding that the City’s review of Quon’s texts was “justified at its inception” since the City had a “legitimate work-related purpose” (i.e., to determine if the monthly character limit was insufficient) and “was not excessive in scope” (i.e., the City limited its review to only two month’s worth of messages) and that the search was not “excessively intrusive” (“a reasonable employee would be aware that sound management principles might require the audit [] to determine if the pager was being appropriately used.”) Similarly, the Court determined that under Justice Scalia’s alternative analytical framework, the City’s search as one which would be considered “reasonable and normal in the private employer context” and, therefore, it did not violate the 4th Amendment.

While the Supreme Court determined that the search of Quon’s text messages was reasonable, it did so without making a specific determination that he had a reasonable expectation of privacy. Indeed, the Court’s demonstrated significant reluctance to define an employee’s reasonable privacy expectations when communicating electronically on employer-owned devices, observing that it “must proceed with care” since “[t]he judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear.” For further information regarding this decision please contact Dina Atwood at datwood@firmspf.com.

The Vermont Supreme Court recently issued an decision in a case entitled Ondovchik Family Limited Partnership v. Agency of Transportation, 2010 VT 35, that has implications for municipalities. The case involved a lawsuit arising from alleged damage to a building from snow throw and water runoff from the State of Vermont Agency of Transportation’s snowplowing of a highway. The landowner presented two claims, each of which had been rejected by the trial court: (1) trespass, based on the theory that the AOT, through snow throw and water runoff, was physically invading landowner’s property and (2) inverse condemnation, based on the theory that AOT had physically taken those parts of the property hit by snow throw and water runoff and that landowner was, therefore, owed compensation.

With regard to the trespass claim, the Supreme Court acknowledged that moving snow onto another’s property might be a trespass. However, the Court held that AOT’s actions were privileged and that landowner’s trespass claim had been properly dismissed. In reaching this conclusion, the Court observed that “trespass involves the unprivileged entry on to the land in possession of another.” It found that snowplows are engaged in privileged, lawful conduct when they are plowing roads. The Court further noted that AOT, like municipalities, has a duty to remove snow and engage in other routine highway maintenance. The Court also refused to evaluate whether AOT could have used other methods of snowplowing (presumably having less impact on landowner) in fulfilling its duty, stating “defendant has discretion in exercising its police powers to choose an efficient method of removing snow from Vermont highways, even if the chosen method causes some incursion upon or incidental damage to landowner’s property.”

The Court also rejected landowner’s inverse condemnation claim. An inverse condemnation action arises where an entity having eminent domain authority fails to exercise that authority (and to pay just compensation) when it had an obligation to do so. In rejecting landowner’s claim, the Supreme Court overruled its own decision in Timms v. State, 139 Vt. 343 (1981), a case in which a landowner’s well was destroyed by the state’s non-negligent salting of roads, and the court found a taking. The Court held that Timms failed to distinguish between “cases involving a permanent physical invasion, on the one hand, and cases involving a more temporary invasion, or government action outside the landowner’s property that causes consequential damages within, on the other.” Quoting federal decisional law, the Supreme Court observed that “property loss compensable as a taking only results when the government intends to invade a protected property interest or the asserted invasion is the direct, natural or probable result of an authorized activity and not the incidental or consequential injury inflicted by the action.” In this case, there was no permanent occupation, intrusion or appropriation by AOT, and any damage was purely consequential. Thus, the facts did not support a claim for inverse condemnation.

The Court further noted that repeated incursions can sometimes rise to the level of a taking, but only in instances where the incursions amount to the taking of an easement. When the intrusion is “limited and transient” in nature and occurs for legitimate governmental reasons, it does not amount to a taking. The Court found that when winter road maintenance activities result in intermittent snow throw and water runoff, it is an incidental incursion only, and does not represent the kind of invasion that would amount to a taking. The landowner in this case also did not allege a injury that was separate and distinct from the public as a whole – all property owners benefit from having roads plowed and de-iced, said the Court, and all have to deal with the consequential and incidental incursions and damage that snow throw and water runoff may cause.

For more information regarding this decision, please contact the Firm.

Changes to the Bankruptcy Code have increased the rate of interest which municipalities may collect on delinquent tax payments from bankrupt taxpayers. Under prior law, a municipality could only collect 5% interest on overdue taxes owed by taxpayers who filed for bankruptcy protection. The law now permits the collection of 12 or 18% interest on overdue taxes owed by a bankrupt taxpayer.

Generally, outside of bankruptcy, state law provides that interest on delinquent property tax payments accrues at a rate of 1% per month for the first three months following the date the tax was due to the Town and 1.5% per month thereafter. 32 V.S.A. §4873. However, when a taxpayer files for bankruptcy protection, the rules change. In bankruptcy, the federal Bankruptcy Code dictates the amount of interest which may be assessed upon a debt, such as delinquent taxes. The Code provides the bankruptcy court with some discretion to reduce the interest rates charged by certain creditors. Till v. SCS Credit Corp., 541 U.S. 465, 471 (2004).

Prior to 2005, the Bankruptcy Code did not contain a specific provision addressing the imposition of interest on property tax claims. This meant that it was up to the Bankruptcy Court to determine the appropriate rate of interest. The U.S. Bankruptcy Court for the District of Vermont determined that bankrupt debtors should be charged 5% interest on delinquent property taxes, rather than 12 or 18% per year as required by state law. In re Laraway, 2003 WL 1342981 (Bkrtcy, D. Vt. 2003). This meant that by filing bankruptcy, delinquent taxpayers could shield themselves from having to pay the full amount of interest normally assessed on delinquent property taxes.

In 2005, Congress amended the Bankruptcy Code through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Through BAPCPA, Section 511 was added to the Code.

(a) If any provision of this title requires the payment of interest on a tax claim or on an administrative expense tax, or the payment of interest to enable a creditor to receive the present value of the allowed amount of a tax claim, the rate of interest shall be the rate determined under applicable nonbankruptcy law.

(b) In the case of taxes paid under a confirmed plan under this title, the rate of interest shall be determined as of the calendar month in which the plan is confirmed.

11 U.S.C.A. §511.

This new provision requires a debtor pay the same rate of interest in bankruptcy as he or she would outside of bankruptcy. In other words, Congress removed the Bankruptcy Court’s ability to reduce the interest rate imposed upon delinquent property taxes owed by a bankrupt taxpayer. Now, even after a taxpayer files for bankruptcy, he or she must still pay the state-mandated 12 or 18% interest on overdue property taxes.

Although the change to the Bankruptcy Code occurred nearly five years ago, many bankruptcy lawyers are unaware of this change. Within the past year, the Firm has seen at least two instances where an incorrect interest rate was listed in bankruptcy reorganization plans. If no objection is filed with the Bankruptcy Court, the erroneous interest rate will not be corrected. Therefore, it is important for municipalities to closely scrutinize bankruptcy documents they receive, in order to assure the correct interest rate is listed for any overdue property taxes. If you would like to learn more or if you believe the incorrect rate of interest has been included in a bankruptcy plan, feel free to contact the firm for assistance.

A recent federal Appellate Court decision illustrates the importance of prompt and effective investigations of and responses to claimed peer-to-peer harassment to avoid a determination of “deliberate indifference.”

In S. S. v. Eastern Kentucky University, 532 F.3d 445 (6th Cir. 2008), a disabled student alleged that the University failed to adequately address or remedy his peer harassment complaints. The student alleged the school had inadequately responded to his complaints about harassment, and disciplined him differently than his peers. Consequently, he claimed discrimination in violation of the Americans with Disabilities Act (ADA) and Section 504 of the Civil Rights Act (§504).

Under either the ADA or §504, a claimant must show that (s) he: 1) is disabled under the law, 2) “otherwise qualified” for participation in the program 3) was excluded from participation, denied the benefits of, or subjected to discrimination under the program by reason of her/his disability and that the school is receiving federal financial assistance.

The 6th Circuit Court of Appeals, applying the Supreme Court’s standard in peer-to-peer harassment cases set out in Davis v. Monroe County Board of Education, 526 U.S. 629 (1977)(liability imposed where school demonstrates “deliberate indifference” toward claim of harassment), concluded that Eastern Kentucky had not shown a “deliberate indifference” to the alleged harassment. Therefore, the Court denied relief.

The Court determined that the school investigated each complaint and instituted disciplinary actions against the responsible students. It also sponsored anti-harassment and bullying programs, utilized mediation sessions to address the issues, and involved the parents of the students. Important to the Court’s holding was its finding that the school investigated and addressed each complaint individually, and tailored its response to the specific facts in each case.

For more on this decision, the requirements for handling discrimination complaints, or other information on the ADA or Section 504, feel free to call our offices.

To help determine which of its 245 managers should be laid off, a federal contractor, Knolls Laboratory, ranked managers based on “performance,” “flexibility,” and “critical skills;” as well as years of service. Thirty-one managers were eventually laid off under this system – thirty of them were at least forty years old. Twenty-eight of the laid off employees sued under the federal Age Discrimination in Employment Act (ADEA).

The Plaintiffs claimed that Knolls “designed and implemented its workforce reduction process to eliminate older employees and that, regardless of intent, the process had a discriminatory impact on [protected] employees.” They relied on statistical analyses to show that the layoff of so many older workers was impossible to attain simply by chance. Plaintiffs also argued that the criteria of “flexibility” and “critical skills” (which managers had the most discretion in determining) were overly subjective, and therefore biased the results to disproportionately target older workers.

The initial jury verdict in favor of the Plaintiffs, which was affirmed by the 2nd Circuit Court of Appeals, was vacated by the Supreme Court in light of an intervening decision issued in Smith v. City of Jackson, 544 U.S. 228. On remand, the 2nd Circuit Court of Appeals reversed, reasoning that the Smith decision had changed the standard of review to one of “reasonableness” and that the burden of persuasion was on Plaintiff to prove the unreasonableness of Defendant’s non-age factors. Plaintiffs sought certiorari and noted that various Courts of Appeals had issued conflicting decisions regarding the burden of persuasion (2nd Circuit had placed the burden on Plaintiffs in this case; 9th Circuit had placed burden on employer in Criswell v. Western Airlines, Inc., 709 F.2d544(1983)).

The Supreme Court held that when an affirmative defense is asserted, the burden of producing (coming forward with) evidence and the burden of persuading the court rests with on the party asserting the affirmative defense. Consequently the 2nd Circuit’s shift of the burden was error. The Court also concluded that an employer which uses an age-neutral method for determining which employees should be terminated “may still be liable under [ADEA] if [the methodology or classification] adversely affects the employee because of that employee’s age.”
Meacham et al. v. Knolls Atomic Power Laboratory, a.k.a. Kapl, Inc., et al., No. 06-1505 (U.S. Jun. 19, 2008)

In a recent South Carolina case , the federal 4th Circuit Court of Appeals concluded that because a School District had posted the message at issue (opposing voucher legislation on grounds that it would “undermine [] the State’s commitment to ensure that all South Carolina children enjoy the right to free, quality public education”), and maintained control over the content and dissemination of the message, that content was “government speech” and beyond the scope of the First Amendment. The Court reasoned that the First Amendment protects individuals against governmental intrusion, regulation or abridgement of the “freedom of speech.” Page v. Lexington County Sch. Dist. One, No. 07-1697 (4th Cir. June 23, 2008)
As the Court observed:

The First Amendment protects against any governmental activity that abridges “the freedom of speech” of non-governmental persons, but it does not regulate the government’s own policies or its speech in support of them. Government speech “is, in the end, accountable to the electorate and the political process for its advocacy.” (Citations omitted).

The School District was sued by a proponent of the voucher legislation who asked for equal access to District’s website in order to post his views. The District denied his request, and the Plaintiff sued, alleging that the School District had violated his First Amendment rights by denying him equal access to the District’s “informational distribution system.” The federal District Court entered judgment in favor of the School District, and the 4th Circuit Court of Appeals affirmed. Both Courts viewed the School District’s campaign as “government speech” and determined that the School District’s website was not a public forum.

In determining that the School District’s website was not a public forum, the Court looked to “whether [the school district’s] communications about its opposition to the [voucher legislation] were government speech or whether the School District used its channels of communication to disseminate the viewpoints of private speakers against the [legislation] to the exclusion of private speakers in favor of the bill, thus discriminating in a limited public forum based upon the speaker’s viewpoint.” Although the District had internet links to third parties opposed to the legislation on its website, those third parties had not requested that links to their sites be posted on the District website; the District had posted the links on its own. The District also maintained the ability to remove or add internet links as it saw fit. The information posted on the website was created and controlled by the District, and the District did not solicit comments, articles, or opinions from any outside sources - pro or con.

Although this particular case involved a school district, the analysis ought to apply to any government website. While the internet can be powerful, public entities need to carefully control the content on their websites. If you have questions about your website, or the need for, or content of, a policy to control that content, give us a call.