Md. Reclamation Assocs., Inc. v. Harford Cnty.

• Decision Date: 24 April 2020
• Docket Number: No. 52 Sept. Term, 2019,52 Sept. Term, 2019
• Citation: 468 Md. 339,227 A.3d 230
• Parties: MARYLAND RECLAMATION ASSOCIATES, INC. v. HARFORD COUNTY, Maryland
• Court: Court of Special Appeals of Maryland

468 Md. 339

227 A.3d 230

MARYLAND RECLAMATION ASSOCIATES, INC.

v.HARFORD COUNTY, Maryland

No. 52 Sept. Term, 2019

Court of Appeals of Maryland.

April 24, 2020

Reconsideration Denied May 11, 2020

Argued by Brett Ingerman (Ellen Dew and Nicole Kozlowski, DLA Piper LLP (US), Baltimore, MD; Rachael Kessler, DLA Piper LLP (US), New York, NY; John R. Greiber, Smouse & Mason, LLC, Annapolis, MD; William D. Hooper, Jr., Fallston, MD; Robert H.B. Cawood, Cawood & Cawood, LLC, Annapolis, MD), on brief for Petitioner/Cross-Respondent.

Argued by Andrew H. Baida (Benjamin Rosenberg and Jamar R. Brown, Rosenberg Martin Greenberg, LLP, Baltimore, MD), on brief for Respondents/Cross-Petitioners.

Amici Curiae Montgomery County, Maryland, Cecil County, Maryland County Commissioners of Carroll County, Maryland, Prince George's County, Maryland, Howard County, Maryland, City of Gaithersburg, Mayor and Council of Rockville, and Maryland Association of Counties ("Movants"): Marc P. Hansen, Esquire, County Attorney, Benjamin R. Legum, Esquire, Assistant County Attorney, 101 Monroe Street, Third Floor, Rockville, MD 20850-2058, Leslie Knapp, Jr., Esquire, 169 Conduit Street, Annapolis, MD 21401, Jason Allison, Esquire, County Attorney, 200 Chesapeake Boulevard, Elkton, MD 21921, Lynn Board, Esquire, City Attorney, 31 South Summit Avenue, Gaithersburg, MD 20877-2098, Debra Yerg Daniel, Esquire, City Attorney, 111 Maryland Avenue, Rockville, MD 20850-2364, Rhonda L. Weaver, Esquire, County Attorney, Wayne K. Curry Administration Building, 1301 McCormick Drive, Suite 4100, Largo, MD 20774, Gary W. Kuc, Esquire, County Solicitor, Carroll Building, First Floor, 3450 Court House Drive, Ellicott City, MD 21043, Timothy C. Burke, Esquire, County Attorney, Carroll County Office Building, 225 N. Center Street, Westminster, MD 21157, Ryan S. Spiegel, Esquire, President, Maryland Municipal League, 1212 West Street, Annapolis, MD 21401.

Argued before: Barbera, C.J., McDonald, Watts, Hotten, Getty, Booth, and Biran, JJ.

Booth, J.

This case requires us to examine a property owner's right to invoke the original jurisdiction of the courts by filing an inverse condemnation case pursuant to Article III, § 40 of the Maryland Constitution, where the constitutional claim was not raised during the administrative agency proceeding before the Harford County Board of Appeals.

We consider these principles against the backdrop of 30 years of litigation between the parties. This is the fourth Court of Appeals case arising out of litigation between Maryland Reclamation Associates, Inc. ("MRA"), and Harford County, Maryland ("Harford County" or the "County"), in connection with MRA's efforts to construct and operate a rubble landfill on approximately 62 acres of land (the "Property") located on Gravel Hill Road, in Harford County. See Md. Reclamation Assocs., Inc. v. Harford Cty. , 342 Md. 476, 677 A.2d 567 (1996) (" MRA II ");¹ Md. Reclamation Assocs., Inc. v. Harford Cty. , 382 Md. 348, 855 A.2d 351 (2004) (" MRA III "); Md. Reclamation Assocs., Inc. v. Harford Cty ., 414 Md. 1, 994 A.2d 842 (2010) (" MRA IV ").

The earlier litigation between the parties concluded with this Court's 2010 opinion in MRA IV , which rejected all of MRA's substantive claims by upholding all the factual determinations and legal conclusions of the Harford County Board of Appeals (sometimes hereinafter referred to as the "Board"). See MRA IV , 414 Md. at 65, 994 A.2d 842. After losing on each substantive claim, including the constitutional and non-constitutional claims that were raised in the context of the administrative hearing and upheld by this Court, MRA filed a separate inverse condemnation case alleging that Harford County's actions constituted an unconstitutional taking of its Property in violation of Article III, § 40 of the Maryland Constitution. Over the decades of litigation, conspicuously absent from the constitutional claims asserted by MRA was any allegation that the application of zoning regulations—Bill 91-10—to its Property, and the denial of a variance, would deprive MRA of all beneficial use of the Property, thereby creating an unconstitutional taking without just compensation. We must determine whether, under our exhaustion of administrative remedies jurisprudence, a landowner may withhold a claim alleging an unconstitutional taking arising from the application of a zoning regulation from the administrative agency's consideration and present the claim to a jury in a separate action invoking the court's original jurisdiction.

For the reasons set forth more fully in this opinion, we hold that, under our abundance of case law applying the exhaustion of administrative remedies doctrine in the context of a constitutional takings claim arising from the application of a zoning regulation, the property owner must raise its takings claims within the administrative agency proceeding prior to seeking judicial review or filing a separate legal proceeding. Our case law firmly establishes that under the Express Powers Act, Md. Code (1974, 2013 Repl. Vol., 2019 Cum. Supp.), Local Government Article ("LG") § 10-101, et. seq ., the Harford County Board of Appeals had original jurisdiction to make the initial factual determination of whether there were any other beneficial uses that could be made of the Property, and to grant relief in the form of a variance to avoid an unconstitutional taking, if MRA had, in fact, established that under the Harford County Code, there were no other beneficial uses that could have been made of the Property, other than a rubble landfill. By failing to raise these claims before the Board of Appeals, MRA did not exhaust its administrative remedies and dismissal of this case was required.

I. BACKGROUND AND LEGAL PROCEEDINGS

On February 19, 2013, MRA filed a Civil Complaint and Demand for Jury Trial in the Circuit Court for Harford County alleging one count, which it titled "Violations of Article III, Section 40 of the Maryland Constitution, Article 19 of the Maryland Declaration of Rights and Article 24 of the Maryland Declaration of Rights." Over two years later, on June 15, 2015, MRA filed an Amended Complaint for Inverse Condemnation and Demand for Jury Trial, again alleging one count for inverse condemnation titled "Violations of § 40 of Article III of the Maryland Constitution and Articles 19 and 24 of the Maryland Declaration of Rights."

The First Amended Complaint ("Complaint") recites the same facts and procedural history concerning MRA's attempt to obtain approvals to operate a rubble landfill on its property that were litigated by MRA in appellate proceedings before this Court. The facts alleged in the Complaint—which formed the basis for the jury's $45 million plus verdict—were first summarized by Judge Eldridge on behalf of this Court in MRA II , 342 Md. at 480–87, 677 A.2d 567. We repeat those facts once again, as follows.

In August 1989, MRA contracted to purchase the Property. MRA intended to construct and operate a rubble landfill on the Property and began the process of obtaining a rubble landfill permit from the Maryland Department of the Environment ("MDE") pursuant to Maryland Code (1982, 1996 Repl. Vol), Environment Article §§ 9-204 through 9-210. MRA II , 342 Md. at 480, 677 A.2d 567.

MRA first requested that Harford County include the Property in Harford County's Solid Waste Management Plan ("SWMP") as a rubble landfill. Id. By a vote of 4-3, the Harford County Council (the "Council") amended its SWMP to include MRA's Property as a rubble landfill. The Property's inclusion in the Harford County SWMP, however, was made subject to 27 conditions, including a minimum landscape buffer of 200 feet. Id. On November 16, 1989, Harford County advised MDE that MRA's Property had been included in the County's SWMP as a rubble landfill site. Id.

MRA next sought approval for its rubble landfill permit from MDE. Id. On November 20, 1989, MRA received Phase I permit approval from MDE. Id. MRA then filed with MDE the necessary reports and studies for Phase II and Phase III approvals. Id.

MRA had entered into a contract to purchase the Property in August 1989, before its inclusion in the SWMP. Id. at 481, 677 A.2d 567. Allegedly relying on the Property's inclusion in the Plan, and on MDE's Phase I approval, MRA consummated the purchase on February 9, 1990, for $732,500. Id. The settlement occurred on the last possible day under the terms of the contract of sale. Id.

Four days after the settlement date, the newly appointed Harford County Council President and a Council member introduced County Resolution 4-90, which provided for the removal of the Property from the County's SWMP. Id. In the litigation that ensued over this legislation, the Court of Special Appeals held that Resolution 4-90 was invalid because it was preempted by the State's authority over solid waste management plans and the issuance of rubble landfill permits. Id. (citing Holmes v. Md. Reclamation Assocs., Inc. , 90 Md. App. 120, 600 A.2d 864, cert. dismissed sub nom. Cty. Council of Harford Cty. v. Md. Reclamation Assocs., Inc. , 328 Md. 229, 614 A.2d 78 (1992) (" MRA I ")).

While the litigation over Resolution 4-90 was pending, in February 1991, Bill 91-10 was introduced by the Harford County Council as an emergency bill. Id. at 482, 677 A.2d 567. Bill 91-10 proposed to amend the requirements for a rubble landfill by increasing the minimum acreage requirements, buffer requirements, and height requirements. Id. The Bill, inter alia , would establish a minimum rubble fill size of 100 acres and a buffer zone of 1,000 feet. Id. After public hearings, the County Council passed the Bill in March 1991. Id.

In April 1991, Bill 91-16 was introduced by the Harford County Council. Id. This Bill authorized the County Council to remove a specific site from the County's SWMP if the site did not comply with certain zoning regulations, if a permit had not been issued by MDE within 18 months of the site...