Wal-Mart Stores, Inc. v. County of Clark

• Decision Date: 01 December 1999
• Docket Number: No. CV-S-1598-PMP (RJJ).,No. CV-S-1452-PMP (RJJ).,CV-S-1452-PMP (RJJ).,CV-S-1598-PMP (RJJ).
• Citation: 125 F.Supp.2d 420
• Parties: WAL-MART STORES, INC., a Delaware Corporation; Eastern Beltway, Ltd., a Nevada Limited Liability Company, Plaintiffs, v. COUNTY OF CLARK, a political subdivision of the State of Nevada, Defendant.
• Court: U.S. District Court — District of Nevada

125 F.Supp.2d 420

WAL-MART STORES, INC., a Delaware Corporation; Eastern Beltway, Ltd., a Nevada Limited Liability Company, Plaintiffs, v. COUNTY OF CLARK, a political subdivision of the State of Nevada, Defendant.

No. CV-S-1452-PMP (RJJ).

No. CV-S-1598-PMP (RJJ).

United States District Court, D. Nevada.

December 1, 1999.

COPYRIGHT MATERIAL OMITTED

Will Kemp, Harrison, Kemp & Jones, Las Vegas, NV, Jon B. Comstock, Wal-Mart Stores, Inc., Bentonville, AR, for plaintiff.

Robert T. Warhola, Deputy District Attorney, Stewart Bell, District Attorney, Las Vegas, NV, for defendant.

ORDER AND PRELIMINARY INJUNCTION

PRO, District Judge.

I. INTRODUCTION

On October 18, 1999, Plaintiff Wal-Mart Stores, Inc. ("Wal-Mart") and Plaintiff Eastern Beltway, LTD. ("Eastern Beltway"), filed a Complaint in Federal Court against Defendant Clark County ("County") (Doc. # 1). Also on October 18, 1999, Plaintiffs filed an Application for Temporary Restraining Order and Motion for Preliminary Injunction (Doc. # 3). On October 19, 1999, a hearing was held on Plaintiffs' request for a Temporary Restraining Order at which this Court granted partial relief, ordering that Clark County Ordinance 2377 would not become effective as to Plaintiffs in regard to the Craig/Nellis and Eastern Beltway sites pending a ruling on Plaintiffs' Motion for Preliminary Injunction (Doc. # 6). The Order however, did not grant the mandatory injunctive relief sought by Plaintiffs that building permits be issued by the County for the two locations. The County filed its Opposition to Plaintiffs' Motion for Preliminary Injunction on October 29, 1999 (Doc. # 19). On November 5, 1999, Wal-Mart and Eastern Beltway each filed a Reply to the County's Opposition (Doc. # 23 and # 27 respectively). The County filed its Answer to Plaintiffs' Complaint on November 5, 1999 (Doc. # 26). Eastern Beltway filed Supplemental Points and Authorities in Support of its Reply on November 10, 1999 (Doc. # 31). In addition to the documents described above, numerous affidavits and exhibits were also filed with this Court.

On November 10, 1999, Wal-Mart removed a pending State Court action to this Court, case number CV-S-99-1598-PMP (RJJ). The removed action was consolidated with CV-S-99-1452-PMP (RJJ) already pending before this Court (Doc. # 33).

Finally, in response to questions by the Court at the hearing on Plaintiffs' Motion for Preliminary Injunction conducted on November 15, 1999, the parties advised that Defendant Clark County would not seek remand of the removed state action nor would they seek abstention, but stipulated to have this Court decide the issues presented.

II. FACTUAL BACKGROUND

This case concerns the adoption of Clark County Ordinance 2377, passed on October 6, 1999 and becoming effective on October 21, 1999. Ordinance 2377 prevents businesses which exceed one hundred ten thousand (110,000) square feet from devoting more than seven and one half (7½) percent of retail space to the sale or display of food. Under the Ordinance, a business is defined as either a single store or two or more stores in the same shopping center which share check stands, management, warehousing, or distribution facilities. The stated purposes for adoption of the Ordinance were to disperse pedestrian and vehicular traffic, preserve property values and control blight. The full text of Ordinance 2377 is attached to this Order as Appendix A.

Wal-Mart argues that enforcement of the Ordinance would effectively prevent it from building two planned "Supercenters" in Clark County. The two proposed Wal-Mart "Supercenters" are described as consisting of approximately two hundred five thousand (205,000) square feet with roughly sixty-five thousand (65,000) square feet of space devoted to grocery items. The planned grocery space in each "Supercenter" would exceed the seven and one half (7½) percent cap under the Ordinance.

The two sites at issue are the Craig/Nellis site, located at the Southeast corner of Craig Road and Nellis Boulevard and the Eastern Beltway site, situated near Eastern Avenue and the I-215 Beltway. Both sites are located in Clark County, Nevada.

Plans for creation of a "Supercenter" at the Eastern Beltway location began as far back as May 22, 1998, when Eastern Beltway first proposed that Wal-Mart convert an existing Wal-Mart store into a "Supercenter" as well as build a Sam's Club.¹ Wal-Mart thereupon entered into a twenty (20) year lease agreement (with sixty (60) more option years) with Eastern Beltway to lease the space necessary to expand the existing Wal-Mart into a "Supercenter." On October 13, 1999, an application for a final building permit was submitted to the Building Department for the Wal-Mart "Supercenter" expansion. Between May 22, 1999 and October 15, 1999, the County as well as other governmental entities granted numerous plan approvals and issued a number of permits relating to the Eastern Beltway project.² On October 15, 1999, the final building permit for the Sam's Club was submitted for approval.

Prior to February 3, 1999, Wal-Mart also entered into a contract to purchase the property to build a "Supercenter" at the Craig/Nellis site. The purchase was expressly conditioned upon obtaining appropriate zoning to construct a "Supercenter" at the location. Wal-Mart obtained zoning approval by a unanimous vote of the Clark County Commission on February 3, 1999. Wal-Mart closed escrow and paid $5,034,354.24 to purchase the property. Again, Clark County and other governmental entities issued a number of permits and approvals for the Craig/Nellis site prior to the adoption and effective date of Clark County Ordinance 2377.³ On October 14, 1999, Wal-Mart was informed that the building permit was ready to be issued for the Craig/Nellis site.

That same day, the Clark County District Attorney's office instructed the Building Department not to issue the requested building permits, pending a judicial determination of whether such permits should be issued. Had the District Attorney's office not instructed the Building Department not to issue the building permits, a final building permit would have been issued for the Craig/Nellis site and the foundation permits for the Eastern Beltway site would have been issued prior to the effective date of the Ordinance.

III. LEGAL STANDARD FOR INJUNCTIVE RELIEF

To obtain a prohibitory preliminary injunction, restraining a party from further action, Wal-Mart must make a clear showing of either: (1) probable success on the merits and irreparable injury; or (2) sufficiently serious questions going to the merits to make the case a fair ground for litigation and a balance of hardships tipping decidedly in favor of Plaintiffs. See Topanga Press, Inc. v. City of Los Angeles, 989 F.2d 1524, 1528 (9th Cir.1993). The Court notes that "these are not two separate tests, but `merely extremes of a single continuum.'" Id. (citation omitted).

[A] moving party need not demonstrate that he risks irreparable injury, but he must at least show that he will suffer a degree of hardship that outweighs the hardship facing the opposing party if the injunction is not issued. Similarly, a moving party need not demonstrate that he will succeed on the merits, but must at least show that his cause presents serious questions of law worthy of litigation.

Id.

"These two formulations represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases." Diamontiney v. Borg, 918 F.2d 793, 795 (9th Cir.1990) (quoting Oakland Tribune, Inc. v. Chronicle Publishing Co., 762 F.2d 1374, 1376 (9th Cir.1985)). Moreover, "in cases where the public interest is involved, the district court must also examine whether the public interest favors the plaintiff." Fund for Animals, Inc. v. Lujan, 962 F.2d 1391, 1400 (9th Cir.1992). Preventing the enforcement of Ordinance 2377 against the two locations at issue requires a prohibitory injunction.

Where, as here, a party seeks a mandatory preliminary injunction, forcing another party to take action that goes beyond maintaining the status quo, such relief is "subject to heightened scrutiny and the injunction requested should not be issued unless the facts and law clearly favor" the moving party. Hilton Hotels Corp. v. ITT Corp., 962 F.Supp. 1309, 1310 (D.Nev.1997); see also Dahl v. HEM Pharmaceuticals Corp., 7 F.3d 1399, 1403 (9th Cir.1993). Forcing the County to issue the required final building permits in the normal course for both the Craig/Nellis and Eastern Beltway sites would require the issuance of a mandatory injunction.⁴

IV. DISCUSSION

For the reasons set forth below, the Court finds that Wal-Mart and Eastern Beltway have met the burden for issuance of a prohibitory injunction preventing enforcement of Ordinance 2377 specifically against Wal-Mart's Craig/Nellis and Eastern Beltway sites as well as the burden for a mandatory injunction requiring the County to issue the final building permits for the two locations in the normal course.

A. Likelihood of Success on the Merits

1. Vested Rights

Generally, the vested rights doctrine protects a landowner or occupier from subsequent zoning changes to real property after development has begun on such property. "The matter typically arises when a landowner or developer commences a particular land use activity in accordance with zoning regulations that are amended at some point during the development process." 35 Am.Jur.3d Proof of Facts 385 § 1 (1996). "Essentially, the landowner is asserting that when he or she commenced development activities under the prior zoning scheme, he acquired a property right, which cannot now be abridged by the government's exercises of its police powers, that is, the amended zoning ordinance." Id.

State law determines the validity of local building permit issuance. California Tahoe Regional Planning Agency v. Jennings, 594 F.2d 181, 191 (9th Cir.1979). Nevada first...