Western Internat'l Hotels v. Tahoe Reg. Plan. Agcy.

• Decision Date: 10 January 1975
• Docket Number: R-2947,R-2957,and R-2961 BRT.,Civ. No. R-2950,R-2956
• Citation: 387 F. Supp. 429
• Parties: WESTERN INTERNATIONAL HOTELS, a foreign corporation, Plaintiff, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants. George R. SMITH and G. R. S., Inc., Plaintiffs, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants. Nathan S. JACOBSON, Plaintiff, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants. BOISE CASCADE HOME & LAND CORPORATION, Plaintiff, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants. EDGEKING VENTURE, a partnership, et al., Plaintiffs, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants.
• Court: U.S. District Court — District of Nevada

387 F. Supp. 429

WESTERN INTERNATIONAL HOTELS, a foreign corporation, Plaintiff, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants.

George R. SMITH and G. R. S., Inc., Plaintiffs, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants.

Nathan S. JACOBSON, Plaintiff, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants.

BOISE CASCADE HOME & LAND CORPORATION, Plaintiff, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants.

EDGEKING VENTURE, a partnership, et al., Plaintiffs, v. TAHOE REGIONAL PLANNING AGENCY et al., Defendants.

Civ. Nos. R-2950, R-2956, R-2947, R-2957, and R-2961 BRT.

United States District Court, D. Nevada.

January 10, 1975.

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Edward H. Tricker, Vargas, Bartlett & Dixon, Reno, Nev., for plaintiff in Civ. No. R-2950 BRT.

Robert List, Atty. Gen. for Nev., Carson City, Nev., for defendant State of Nevada.

Petersen & Petersen, Reno, Nev., for plaintiffs in Civ. No. R-2956 BRT.

Frank R. Petersen, Reno, Nev., Thomas R. Sheridan, Los Angeles, Cal., for plaintiff in Civ. No. R-2947 BRT.

Richard R. Hanna, South Lake Tahoe, Cal., for defendant TRPA.

Donald L. Carano, McDonald, Carano, Wilson & Bergin, Reno, Nev., Charles A. Legge, Paul J. Sanner, Bronson, Bronson & McKinnon, San Francisco, Cal., for plaintiff in Civ. No. R-2957 BRT.

Vargas, Bartlett & Dixon, Reno, Nev., for plaintiff in Civ. No. R-2961 BRT.

ORDER

BRUCE R. THOMPSON, District Judge.

These cases have been considered together with respect to the motions to dismiss filed by defendants. Plaintiffs are owners of real property subject to the jurisdiction of the Tahoe Regional Planning Agency (hereinafter "TRPA").

TRPA is the product of the Tahoe Regional Planning Compact approved by Congress¹ and ratified by Nevada² and California³. Pursuant to the authority thereby established, TRPA has enacted and put into operation the Land Use Ordinance (hereinafter "LUO") comprehensively regulating the development and use of the areas within the jurisdiction of TRPA, including plaintiffs' properties. Plaintiffs complain that such ordinance unconstitutionally deprives them of their property. The motions to dismiss challenge the Court's jurisdiction over these complaints for plaintiffs' alleged failure to exhaust administrative remedies, for failure to state claims upon which relief can be granted, and for failure to state claims against the particular defendants.

Exhaustion of Administrative Remedies.

The motions to dismiss challenge the Court's jurisdiction over these actions for plaintiffs' alleged failure to exhaust administrative remedies. "The doctrine provides `that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.'"⁴

The Compact and LUO each provide administrative procedures for alterations in the restrictions of use applicable to particular land sites. An aggrieved owner may seek an amendment to the Regional Plan in proceedings before the Planning Commission and TRPA. See Art. V, sec. (a) of the Tahoe Regional Planning Compact. A land owner may also seek an alteration in "land coverage" by application to the permit-issuing authority, subject to the review of TRPA. See LUO §§ 5.50, 8.25 and 8.28. Or, the owner may seek a variance in the "use regulation" by application to the permit-issuing authority. See LUO § 8.34.

Plaintiff Western International Hotels (hereinafter "Western") alleges pursuit of administrative remedies in that it sought an amendment to the general plan. Western's efforts resulted in TRPA rejection of the amendment without hearing. Counsel for TRPA acknowledged during argument on these motions that Western's efforts constituted exhaustion of remedies.

Plaintiffs Boise Cascade Home & Land Corporation (hereinafter "Boise Cascade"), Smith and Jacobson allege no pursuit of administrative remedies. They allege instead that the futility and inadequacy of the available procedures excuses them from exhausting those remedies. Plaintiffs support their position by arguing that the statements and policies of TRPA demonstrate that the relief sought by plaintiffs will not be granted by TRPA even if the procedures are invoked; that the expense involved in seeking relief before TRPA is prohibitive; and that the remedies available do not reach the fundamental question of the constitutionality of LUO.

The test for assessing the sufficiency of allegations of exhaustion of administrative remedies on a motion to dismiss (Rule 12(b)(1), Federal Rules of Civil Procedure) is whether "plaintiff has alleged sufficient facts with sufficient particularity to raise some question in the court's mind concerning the futility and/or inadequacy of resorting to the * * * remedy provided by State law."⁵ If such a question is raised, it cannot be said to be a legal certainty, as it must on a motion to dismiss, that there is an efficacious adequate remedy which plaintiff must exhaust.

If an administrative body has a definite policy or has made definite statements opposed to plaintiff's position, it is not required that the plaintiff proceed before the administrative body prior to seeking judicial review.⁶ Plaintiffs refer to TRPA statements regarding the fragility of the Tahoe environment as evidence of TRPA policy to deny their applications for expanded use of the properties here in question. The stated "General Purposes" underlying the use districts of LUO (as set forth in § 7.11) are the protection of the "ecologically fragile areas and the quality of the lakes of the Tahoe Region;" the maintenance of the "natural scenic quality of the * * * Region;" and the limitation of the area population to "maintain an equilibrium between the Region's natural endowment and its manmade environment." Plaintiffs argue that TRPA will not, in the light of these adverse policies, authorize the return of their properties to the pre-LUO use classifications and that resort to TRPA is, therefore, futile.

Plaintiffs' properties are primarily in the most restrictive use classifications. Smith has eight acres in general forest; Jacobson has ten acres in general forest and recreation; and Boise Cascade has 3,300 acres in general forest as well as some acreage in recreation and in conservation.

Counsel for TRPA conceded at the hearing on these motions that a reclassification of Boise's entire 3,300 acres would not be considered, although Boise might obtain changes for portions of the tract. Boise does not seek authorization to develop portions of its property. It seeks authority to develop the entire tract. If reclassification will not be considered for the entire tract, it would be pointless to refer Boise to the administrative procedures.

The experience of Western Hotels is instructive as to the futility of the remedies for the smaller parcel holders Smith and Jacobson. Western was refused a plan amendment for its 45 acres without hearing. The policy reasons underlying the exhaustion requirement are deference to the expertise of the zoning boards and enhancement of the judicial proceedings by the assistance of the administrative fact-finding function. Brawner Building, Inc. v. Shehyn, 143 U.S.App.D.C. 125, 442 F.2d 847 (1970). See also: Coronet Homes, Inc. v. McKenzie, 84 Nev. 250, 255-256, 439 P.2d 219 (1968). Summary treatment of proposed amendments such as that accorded Western by TRPA does not further either of these purposes.

Plaintiffs also challenge the adequacy of TRPA procedures in the light of this Court's holding in Brown v. Tahoe Regional Planning Agency, D.C., 385 F.Supp. 1128. We there excused exhaustion of remedies because the challenge to the constitutionality of the Land Use Ordinance as a whole placed the issues of the suit outside the scope of TRPA's administrative powers. Remedies are clearly inadequate in such a case. NLRB v. Marine Workers, 391 U.S. 418, 426, n. 8, 88 S.Ct. 1717, 20 L.Ed.2d 706 (1968).

For the purposes of the motions to dismiss, we must accept as established the well-pleaded facts of the complaints (Collins v. Hardyman, 341 U.S. 651, 652, 71 S.Ct. 937, 95 L.Ed. 1253 (1951)), and we must deny the motions unless it can be said to a legal certainty that plaintiffs can prove no set of facts in support of their claims. Ricciotti, supra, and Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In the light of the comments by counsel for TRPA, the express declarations of purpose of the Land Use Ordinance, the experience of Western Hotels, and the discretion vested in a court of equity to relax the exhaustion requirement where the facts of the case so dictate (Natural Gas Co. v. Slattery, 302 U.S. 300, 311, 58 S.Ct. 199, 82 L.Ed. 276 (1937)), we cannot say to a legal certainty that plaintiffs cannot prove that the administrative remedies of the Ordinance are futile.

Failure to State a Claim.

The motions to dismiss attack the complaints for their purported failure to state a claim upon which relief can be granted. Rule 12(b)(6), Federal Rules of Civil Procedure. The complaints allege that the regulation of plaintiffs' lands embodied in the Land Use Ordinance is so restrictive as to constitute a "taking" of those properties. The Ordinance is thus said to violate the constitutional guarantees that property will not be taken without compensation (Fifth Amendment) and that it will not be taken without due process of law (Fourteenth Amendment). Defendants justify the regulation by reliance on the police power doctrine.

The police power has been broadly defined as the "time-tested conceptional limit of public encroachment upon private interests" (Goldblatt v. Hempstead, 369 U.S. 590, 594, 82 S.Ct. 987, 990, 8 L.Ed.2d 130 (1962)); and "the power to regulate human activity in order to promote public health, safety, welfare and morals" (Van Alstyne, "Taking or Damaging by Police Power: The Search for Inverse Condemnation Criteria," 44 So. Cal.L.Rev. 1 (1971)). Justice Holmes...