Obstacles to Settlement of Land-Use Disputes

Who Can Settle the Case?

First, who can settle the case on behalf of the municipality? Since 1984, when a sharply divided Court of Appeals decided Matter of Commco v. Amelkin, 62 N.Y. 2d 260, it has been clear that a town attorney, acting on behalf of the town board, lacks power to settle a dispute between a landowner and the ZBA. In Commco, the court held that because the state legislature conferred on ZBAs authority independent of the town board of trustees, the town board could not usurp that power by settling or refusing to defend a litigation against the ZBA. The court indicated that the ZBA is impliedly vested with the power to hire its own counsel, without the approval of the town board, in cases where there is a conflict of interest between the town board and the ZBA. Although Commco itself dealt with a town board and town ZBA, the court's analysis would be equally applicable to villages.

Nothing in Commco prevents the ZBA's own counsel from settling a dispute with the developer, but consider the problems that might block such a settlement. First, the ZBA's counsel is responsible to the ZBA, not the board of trustees, and may not face the same pressure to consider the cost of litigation to the municipality. Second, what advantages does settlement generate for the developer? If ZBA agrees to a compromise that rejects significant aspects of its own prior interpretation, the “settlement” would be subject to attack by unhappy neighbors on the ground that the ZBA issued its new interpretation without following the procedures outlined in the applicable statute and ordinance ' including the requirement of a public hearing. See, e.g., Town Law, section 267-a(7).

A New 'Interpretation'

Moreover, even if the developer were confident that the ZBA would quickly schedule a public hearing as a prelude to approval of the new “interpretation” embodied in the settlement, the interpretation would not entitle the developer to proceed with the project. Neighbors, who were not party to the original article 78 proceeding, and therefore not parties to the settlement, would remain free to bring their own article 78 proceeding challenging the new interpretation. A prior judicial determination overturning the ZBA's initial interpretation might make it difficult for neighbors to mount a court challenge to the court's decision (even if res judicata doctrine did not technically bind them, as non-parties, to the prior judicial determination). A prior settlement, however, would provide no deterrent at all to neighbor litigation; the ZBA might be bound to its settlement and new interpretation, but the ZBA would be in no position to bind unhappy neighbors.

In addition, even if the neighbors did not bring an article 78 challenge to the new interpretation, the neighbors would undoubtedly emphasize the absence of a prior judicial determination when they appeared before the planning board during the site plan review process. Thus, part of the problem with any settlement the developer makes with the ZBA is that the settlement cannot insure approval of developer's project. (Of course, even a final judgment overturning the ZBA's interpretation does not result in final approval, but a judicial imprimatur on one aspect of the project may well have an impact on subsequent decisionmakers, who may view ultimate approval as more inevitable).

What About an Adverse SEQRA Determination?

Although the discussion so far has focused on obstacles to settlement of an article 78 challenge to a zoning interpretation by the ZBA, similar obstacles provide disincentives to other forms of land use litigation. Suppose, for instance, a developer were to challenge a site plan denial that rested on an adverse SEQRA determination. The developer could not settle the dispute with the municipality before the municipality complied with its SEQRA obligations ' which might require preparation of a new environmental impact statement on the plan “approved” as part of the settlement.

The result of these obstacles to settlement is that developers, municipalities, and neighbors spend more time and money on litigation than they would in a world where the municipal attorney and the developer's attorney could hammer out a compromise agreement. Of course, that time and money may be well spent. Meaningful public participation in the land-use process may require prohibiting town and village boards from hammering out “back-room deals” with developers, even when those deals save the municipality money. How much public participation is necessary to discipline municipal officials, however, remains an open question. The important point, for present purposes, is to recognize that public participation costs taxpayers money in ways that are not always evident. Perhaps it is time to think about how land use processes might be streamlined to reduce the volume of litigation without eliminating opportunities for meaningful public participation.

Stewart E. Sterk, Mack Professor of Law at Benjamin N. Cardozo School of Law, is Editor-in-Chief of this newsletter.

Article 78 proceedings between landowners and municipalities are a staple for New York's court system, often reaching the Appellate Division on
disputes that seem insignificant to the outside observer. Often, these proceedings do not involve novel or important legal issues, yet they rarely settle before judicial resolution. In part, the problem arises because all parties to these disputes hold strong views about the merits of their position. But also in part, the failure to settle arises because of the structure of land use law in New York. This article explores the structural obstacles to settlement of land use disputes.

A Hypothetical

Suppose a hypothetical developer wants to build a small strip-mall shopping center in an exurban town or village. Shopping centers are permitted within the district, but questions arise about whether the ordinance would permit a restaurant that plans a takeout business, and whether the proposed shopping center meets the parking requirements of the local zoning ordinance. When the developer seeks site plan approval from the local planning board, the board refers the application to the zoning board of appeals (ZBA) for an interpretation of the ordinance. Suppose further that the ZBA interprets the ordinance in a way that leaves the developer unhappy. If the developer brings an article 78 proceeding challenging the interpretation, consider the obstacles to settlement.

Who Can Settle the Case?

First, who can settle the case on behalf of the municipality? Since 1984, when a sharply divided Court of Appeals decided Matter of Commco v. Amelkin , 62 N.Y. 2d 260, it has been clear that a town attorney, acting on behalf of the town board, lacks power to settle a dispute between a landowner and the ZBA. In Commco, the court held that because the state legislature conferred on ZBAs authority independent of the town board of trustees, the town board could not usurp that power by settling or refusing to defend a litigation against the ZBA. The court indicated that the ZBA is impliedly vested with the power to hire its own counsel, without the approval of the town board, in cases where there is a conflict of interest between the town board and the ZBA. Although Commco itself dealt with a town board and town ZBA, the court's analysis would be equally applicable to villages.

Nothing in Commco prevents the ZBA's own counsel from settling a dispute with the developer, but consider the problems that might block such a settlement. First, the ZBA's counsel is responsible to the ZBA, not the board of trustees, and may not face the same pressure to consider the cost of litigation to the municipality. Second, what advantages does settlement generate for the developer? If ZBA agrees to a compromise that rejects significant aspects of its own prior interpretation, the “settlement” would be subject to attack by unhappy neighbors on the ground that the ZBA issued its new interpretation without following the procedures outlined in the applicable statute and ordinance ' including the requirement of a public hearing. See, e.g., Town Law, section 267-a(7).

A New 'Interpretation'

Moreover, even if the developer were confident that the ZBA would quickly schedule a public hearing as a prelude to approval of the new “interpretation” embodied in the settlement, the interpretation would not entitle the developer to proceed with the project. Neighbors, who were not party to the original article 78 proceeding, and therefore not parties to the settlement, would remain free to bring their own article 78 proceeding challenging the new interpretation. A prior judicial determination overturning the ZBA's initial interpretation might make it difficult for neighbors to mount a court challenge to the court's decision (even if res judicata doctrine did not technically bind them, as non-parties, to the prior judicial determination). A prior settlement, however, would provide no deterrent at all to neighbor litigation; the ZBA might be bound to its settlement and new interpretation, but the ZBA would be in no position to bind unhappy neighbors.

In addition, even if the neighbors did not bring an article 78 challenge to the new interpretation, the neighbors would undoubtedly emphasize the absence of a prior judicial determination when they appeared before the planning board during the site plan review process. Thus, part of the problem with any settlement the developer makes with the ZBA is that the settlement cannot insure approval of developer's project. (Of course, even a final judgment overturning the ZBA's interpretation does not result in final approval, but a judicial imprimatur on one aspect of the project may well have an impact on subsequent decisionmakers, who may view ultimate approval as more inevitable).

What About an Adverse SEQRA Determination?

Although the discussion so far has focused on obstacles to settlement of an article 78 challenge to a zoning interpretation by the ZBA, similar obstacles provide disincentives to other forms of land use litigation. Suppose, for instance, a developer were to challenge a site plan denial that rested on an adverse SEQRA determination. The developer could not settle the dispute with the municipality before the municipality complied with its SEQRA obligations ' which might require preparation of a new environmental impact statement on the plan “approved” as part of the settlement.

The result of these obstacles to settlement is that developers, municipalities, and neighbors spend more time and money on litigation than they would in a world where the municipal attorney and the developer's attorney could hammer out a compromise agreement. Of course, that time and money may be well spent. Meaningful public participation in the land-use process may require prohibiting town and village boards from hammering out “back-room deals” with developers, even when those deals save the municipality money. How much public participation is necessary to discipline municipal officials, however, remains an open question. The important point, for present purposes, is to recognize that public participation costs taxpayers money in ways that are not always evident. Perhaps it is time to think about how land use processes might be streamlined to reduce the volume of litigation without eliminating opportunities for meaningful public participation.

Stewart E. Sterk, Mack Professor of Law at Benjamin N. Cardozo School of Law, is Editor-in-Chief of this newsletter.