In this author’s opinion, courts have traditionally been reluctant to grant motions for sanctions.  In addition, localities have real or perceived political downside that must be considered. This often means that the possibility of achieving sanctions and even a monetary award has generally been outweighed by the small likelihood of success and the fear of political repercussions.

In two highly-publicized cases in 2010, however, two counties obtained sanctions against plaintiffs that brought lawsuits for improper purpose and/or without the necessary factual or legal foundation in violation of Virginia Code section 8.01-271.1. Interestingly, both involved lawyers acting pro se for himself in one case and for herself and others in another. 

The first case selected will be addressed today, and the second in a future post.

In Augusta County, a local attorney was sanctioned earlier this year by the circuit court for filing a class action lawsuit on behalf of himself and a class of 10,459 county taxpayers against the County’s reassessment.  The plaintiff/attorney asked for a writ of mandamus to force the individual members of the Board of Supervisors and the Commissioner of the Revenue to reject the 2009 assessment figures and reinstitute assessments determined in the previous reassessment five years earlier.

The plaintiff/attorney’s lawsuit was quickly opposed by Augusta County, which pointed out in its demurrer that  class actions were not permitted for this sort of suit in Virginia, that some defendants were named with no allegation of conduct against them, and that the allegations did not describe any ministerial duty to perform the act requested (e.g., reject the new 2009 assessment figures and reinstate the 2005 assessment figures).  The plaintff/attorney attempted to nonsuit, but not before the Court insisted on hearing Augusta County Attorney Pat Morgan’s sanctions motion filed under Virginia Code 8.01-271.1.

According to the summary published by the Virginia Lawyers Weekly, the judge sanctioned the plaintiff/lawyer $2,000 for filing a class action when the law did not permit it, naming individual defendants without any allegation against them individually, and asking for inappropriate relief.  According to the local newspaper, the sanctioned attorney paid the fine September 2.

It is fine to want to speak truth to power, and most people understand some level of frustration with assessments and taxation from time to time.  However, this case shows that even an attorney ostensibly sticking up for the little guys can and will be held to the rule of law.  And violations can be expensive.

Next time:  An environmental advocacy group gets sanctioned in its lawsuit against Louisa County.

And this blog has a lot to celebrate!

The Virginia Local Government Law blog has steadily grown in readership over the year, and in July 2010 became the most popular blog among the many popular blogs at Sands Anderson PC!  This blog has covered some of the many issues affecting the practice of local government law.  We have published articles on land use, zoning, vested rights, Boards of Zoning Appeals, Boards of Equalization, tax appeals, noise ordinances, the private v public practice of law, new alternative onsite septic systems, stormwater regulations, transfer of development rights, family subdivisions, various civil procedure topics, social media, holiday issues, the Second Amendment and legislation and opinions issued by the U.S. and Virginia Supreme Courts affecting local governments.  And more.

Wow.  This recap is a reminder of how diverse and interesting the practice of local government law can be.  While a specialty in its own right, its substantive law covers quite a bit of territory.

Thanks for your readership, and for your support of this blog.  We welcome your comments – just use the box below.  Thanks again.

I spent about an hour being filmed for various video clips that will be used on my firm website page, and on this blog page, www.VaLocalityLaw.com.  Other lawyers from various teams are also being filmed.

The film crew was supportive and helpful, although I did note the lack of a fully stocked green room, makeup assistant and personal trailer.  Maybe next time, I can remember to negotiate those in advance!

In this day and age of the visual taking precedence over the written word, it makes sense for Sands Anderson to take this step.  Some people would rather see me talk about this blog or what I do for about one minute, twenty seconds than read the identical content.  And, although I cannot promise, I certainly hope you will get a sense of my personality and passion from the video that would be more difficult to garner from the written word.

In social media and on the internet, video is king as well.  Studies have shown that tweets and posts that contain links to video content are preferred over those without.  YouTube, which features posted video clips, is one of the most frequented websites in the country.  The search engine Google prioritizes its search results to favor results with video as well.

So, Sands Anderson PC is headed into the video world with today’s filming.  Check back soon to these websites to see the results!

Need for the Bill

This bill was much needed. Prior to this bill, a BZA has been held to be a necessary party in an appeal. Board of Supervisors of Fairfax County v. Board of Zoning Appeals of Fairfax County, 225 Va. 235, 238, 302 S.E.2d 19 (1983) (“[U]ntil return on the writ of certiorari is made by the board of zoning appeals, the only necessary parties to a proceeding under [the predecessor statute to Virginia Code § 15.2-2314] are the aggrieved person and the board.”)

Being named as a party (and its chair often being served with process by the local sheriff) often resulted in angst on the part of the BZAs. BZAs felt they were “being sued,” and this was often reported in the local media. Localities and their BZAs argued over whether the BZA is a “real” party on appeal, which needs counsel, or merely named so it can produce its record for consideration by the circuit court. Being named as a party lead many BZAs to ask their localities for counsel, and in some instances, to sue for it. See Board of Zoning Appeals of Fairfax County v. Board of Supervisors of Fairfax County, 276 Va. 550, 666 S.E.2d 315 (2008).

HB 1063 largely resolves these problems.

Significant Changes in HB 1063

First, service of the petition for writ of certiorari will be served upon the “secretary of the board of zoning appeals or, if no secretary exists, the chair of the board of zoning appeals.” This will allow the BZA to designate a person not on the board as secretary, such as a staff member more likely to have the record as a practical matter. This would avoid service on any member of the BZA, at the option of the local BZA.

Second, and perhaps most significantly, an appeal from a decision of the BZA no longer will name the BZA. Rather, a petition for writ of certiorari to circuit court will be styled, “In Re: [date] Decision of the Board of Zoning Appeals of [locality name].” The BZA is no longer a necessary or even an appropriate party. Rather, the BZA is instructed to “participate in the proceedings to the extent required by this section.” The section’s only apparent requirement for the BZA, which is unamended by the bill, requires the BZA to provide its record to the circuit court.

Another, arguably unrelated change clarifies who is a “necessary party.” The bill expressly lists “governing body, the landowner, and the applicant before the board of zoning appeals.” This listing is helpful to the appellant, and eliminates arguments on this issue on appeal. This provision guarantees the governing body a say on appeal, if so desired. However, this amendment requires that the governing body be involved on some level. In the past, a governing body was able to have no involvement in cases in which it had no interest – a variance dispute between two neighbors, for example. Now, the governing body is required to be named. Presumably, the local government attorney representing the governing body can defer to the other parties, or simply default if the governing body has no interest in the case.

Lastly, the bill requires that the written notice of appeal required for a zoning administrator determination to be final under Virginia Code § 15.2-2311(A) to include the cost of appeal and reference to where additional information may be obtained regarding filing an appeal. This is helpful information to prospective appellants and is easily given. By statute, failure to provide this additional information means the zoning administrator’s determination is not final.

Lessons from HB 1063

One result of this bill is that BZAs will not longer be able to defend their decisions on appeal, even if they wish to. But this makes sense. BZAs are quasi-judicial bodies, in almost all cases. They should act like courts in making their determinations. BZAs are not proper parties on appeal, any more than courts or their judges are parties on appeal of their decisions.

Without a role for the BZA as a party on appeal, the BZA’s decision must speak for itself. BZAs, appellants and zoning staff involved in their cases should be aware of the importance of the determination of the BZA in case of appeal. The decision should be clear.

Also, although unrelated to HB 1063, on appeal to circuit court of BZA decisions on zoning administrator determinations, the “plainly wrong” standard for review not longer applies. Instead, BZAs get a rebuttable presumption of correctness for their factual findings, but no presumption in favor of their legal determinations, which are reviewed de novo (“as if new”) on appeal. See Virginia Code § 15.2-2314. Therefore, parties and BZAs should consider the importance of factual findings in these cases.

Conclusion

HB 1063 is a helpful simplification of the procedure for appeals of BZA decisions. While not making cases before BZAs any simpler, this bill clarifies that on appeal – as with a court – it is the BZA’s decision that must stand or fall. The BZA is not a party and has no role beyond providing the record. In response, BZAs should ensure that the record is complete and that the reasoning for their decisions are clear in that record.

The text of the new law says:

“§ 1. Notwithstanding the provisions of any cash proffer requested, offered, or accepted pursuant to § 15.2-2298, 15.2-2303, or 15.2-2303.1 of the Code of Virginia for residential construction on a per-dwelling unit or per-home basis, cash payment made pursuant to such a cash proffer shall be collected or accepted by any locality only after completion of the final inspection and prior to the time of the issuance of any certificate of occupancy for the subject property.”

These bills were adopted as a priority of the Home Builders Association of Virginia as a benefit to struggling homebuilders.  They were intended to save the financing costs on money borrowed to pay the cash proffer between the date of the building permit (when these have been paid in most cases) and the date of the certificate of occupancy (when the builder can close on the home and pay off the debt). 

Good for the homebuilders.  But there are issues.

First, the law is causing some practical problems.  For example, unlike at the building permit stage, the local government does not typically collect money at the C.O. stage, so new procedures for the locality and another trip to the building official’s office by the builder may be required.  The locality obviously loses out on the use of the money during that period for purposes such as schools and road improvements. 

But the bigger issues seem to be nagging legal questions. 

For example, a cash proffer is not merely a statute that can be amended.  It is a local zoning ordinance adopted in a specific zoning case.  A proffer’s language, including the requirement (in most cases) to pay the cash proffer at the building permit stage is actually a zoning regulation, legally identical to a setback requirement or use limitation.  See Jefferson Green Unit Owners Assoc. v. Gwinn, 262 Va. 449, 458, 551 S.E.2d 339 (2001) (“proffers become part of the zoning ordinance” and are legislative enactments).

This being the case, some have asked how local governments can comply with this new law but not comply with statutory prerequisites to changing such regulations, such as notice and a public hearing.  Some have raised constitutional objections on similar grounds.  Some have asked whether this new law may disturb vested rights.  Some see proffers as more in the nature of a contract between the zoning applicant and the local government, and ask whether the law may unconstitutionally disturb these contractual relations.

With these questions and hundreds of existing proffers that specify the date of payment at the building permit stage, localities are reacting in various ways.  Some localities are applying this new law prospectively only or requiring past proffers to be amended.  Others are considering applying the proffers as submitted or accepted and waiting to see how future proffers are submitted.  Some are not amending pre-existing proffers themselves but are implementing the delay in payment by policy.

Local government attorneys and legislative liaisons raised these serious issues with the Virginia General Assembly and Governor McDonnell before HB 374 and SB 632 were adopted and before they left the Governor’s desk.  Now, they are the law. 

HB 374 and SB 632 are certainly helpful to our builders in “this economy.”  But, inarguably, this law also has serious issues that our local governments are left to address.

Last year, this blog reported that the U.S. Supreme Court would be ruling on a key Second Amendment case arising in Chicago that may have a bigger impact on state and local governments than the D.C. gun ban case previously decided.  The post was entitled, “U.S. Supreme Court to hear Key Second Amendment Case.”

My post suggested that one of the key issues to be decided was whether the Second Amendment applied to state (and localities) via the Due Process Clause or the Privileges and Immunities Clause.

Today, the case was decided. 

Justice Samuel Alito, writing for a four-justice plurality, based the application of the Second Amendment — which on its face only applies to the federal government — to the states by means of the Due Process clause of the Fourteenth Amendment.  A fifth justice, Clarence Thomas, appeared to base the incorporation of the Second Amendment upon the Privileges and Immunities Clause, the SCOTUSblog and the ABAJournal report.   A Washington Post article is here.

The fact that only one of the nine justices seemed to apply the Privileges and Immunities Clause seems to doom this argument for now.  Instead, the Due Process Clause of the Fourteenth Amendment seems to be the means by which the Second Amendment — like the other amendments — will be applied to the states.

The decision did leave the door open for reasonable state and local regulation of guns as a U.S. Constitutional matter.  Outright bans like that in Chicago seem to be in serious question.  What lesser level of regulation will be considered reasonable will be determined by future litigation. And lots of it.

In his opinion, Justice Alito issued an assurance that “doomsday” had not come to state and local gun regulation.  Likely not.  And the result was no great surprise to Supreme Court-watchers.  But now the path to legally challenge state and local gun regulations is clear, and states and local governments will inevitably see increased litigation as a result.

Douglas Berman, professor of law at Moritz College of Law, said bluntly today on the SCOTUSblog, “Even before having a chance to skim the Supreme Court’s important McDonald ruling concerning the application of the Second Amendment to the states, I can already predict one of its likely (and most consequential?) impacts:  lots of state court litigation over state criminal laws concerning the possession and use of firearms.”

States (and localities) had better be ready, locked and loaded.

By letter sent June 18, the Virginia Association of Counties (VACo) and the Virginia Municipal League (VML), the bodies representing our Virginia localities at the state government level, told the Governor that ABC stores, if sold for private operation, must be subject to local land use.  And they are right.

It is generally accepted that the Commonwealth of Virginia, as sovereign, is not subject to local zoning by its political subdivisions.  The Commonwealth does enjoy its freedom from local regulation.  However, this freedom does not extend to private uses, such as privately-owned liquor stores. 

The Virginia Supreme Court has upheld local land use authority to regulate private liquor sales even when the Commonwealth has issued a state ABC license in City of Norfolk v. Tiny House, 222 Va. 414, 281 S.E.2d 836 (1981) and in County of Chesterfield v. Windy Hill, Ltd.  The Supreme Court also upheld local land use authority to regulate private uses, even on publicly-owned land, in Board of Supervisors of Fairfax County v. Washington, D.C. SMSA, L.P.

The importance of local say over the proper location of these stores, and the ability to place reasonable conditions that enable the stores — now no longer under public ownership — to fit harmoniously within the community is critical.  Local control over land use works and is essential to meet the citizens’ expectations for their communities.

VML and VACo are right.  If the Commonwealth is no longer in charge of the location of these stores, the people’s local elected bodies must be.

 http://www.courts.state.va.us/scndex.htm)

090444 James v. City of Falls Church 06/10/2010 The trial court did not err in granting a motion to strike the evidence, or in dismissing an action by a church which had been denied an application for consolidation of several lots after consideration by a zoning administrator, planning staff, and the locality’s planning commission. The circuit court did not fail to apply the correct standard of review, and the church failed to show that the planning commission’s denial of its consolidation application was not properly based on the applicable ordinances, or was arbitrary or capricious, as was its burden of proof under Code §§ 15.2-2259(D) and -2260(E). The circuit court did not err in finding that the commission had the right and authority to disregard the zoning administrator’s interpretation of a local ordinance in deciding whether to approve or disapprove the consolidation application. The judgment is affirmed.

091180 Advanced Towing v. Fairfax County Board 06/10/2010 The trial court did not err in sustaining demurrers in a suit for declaratory relief filed by two towing companies challenging an ordinance requiring them to have a vehicle storage facility within the boundaries of the county. A reasonably conceivable state of facts appeared on the pleadings concerning enforcement of the provision that could provide a rational basis for the classification made by the ordinance under review, and the territorial limitation therefore survives analysis under the Equal Protection guarantee of the Fourteenth Amendment. Likewise, the Dillon Rule of limited local government powers allows a reasonable selection of method permitting local governing bodies to exercise discretionary authority where a statutory grant of power has been expressly made but is silent upon the mode or manner of its execution. The judgment is affirmed.

091271 TC MidAtlantic Development v. Commonwealth 06/10/2010 In a construction contract dispute, the trial court did not err in dismissing on demurrer two counts of a complaint brought by a construction company against the Virginia Department of General Services on the ground that compliance with conditions precedent for such claims was not adequately pled. The trial court erred in sustaining a demurrer and dismissing another count of the complaint as to which the timely claims requirement set forth in the demurrer was not applicable. The judgment is affirmed in part, and reversed in part, and the action is remanded for further proceedings.

091343 Covel v. Town of Vienna 06/10/2010 The judgment is affirmed in three consolidated circuit court actions involving challenges to a local historic preservation ordinance and decisions made by the locality thereunder. No evidence in the record rebuts the presumption of validity of the locality’s decision denying a certificate of appropriateness to build a fence and denying permission to remove various parcels from the historic district. Code § 15.2-1427(C), reenacted in 2000, bars all non-constitutional challenges to the adoption of ordinances existing at that time, such as the ordinance involved in these cases. The ordinance provisions at issue here are sufficiently precise and definite to give fair warning of the information required for applications under its terms, and no error is found in the judgment of the circuit court dismissing the as-applied challenge to the ordinance.

Local government attorneys should take note of the evolving law on e-discovery and the importance of litigation holds of electronic information.   

Attorney Erin R. McNeill has published on the Sands Anderson Risk Management blog an article addressing an important development in the case law dealing with electronic discovery, provided by Kelly A. Davidson (Sands Anderson PC Practice Group Support).  Her article highlights the importance of litigation holds.  While not Virginia law, this case illuminates some of the issues in e-discovery and may assist you in examining your litigation hold policies.

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2010 Scheindlin Opinion on Sanctions, Spoliation, Collection and Litigation Holds

  On January 11th, Judge Shira A. Scheindlin entered an eighty-eight page decision in The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, LLC, et al., 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. Jan. 11, 2010), subtitled “Zubulake Revisited: Six Years Later,” addressing the preservation, collection, litigation holds and sanctions relating to ediscovery. The genesis of the decision stems from a series of prior decisions in Zubulake v. UBS Warburg, referred to as Zubulake I-V. The Zubulake decisions gave rise to eventual sweeping changes in the Federal Rules of Civil Procedure regarding electronically stored information (“ESI”) and ediscovery in December of 2006 and many state court rules, including the Rules of the Supreme Court of Virginia as of January 1, 2009. See, e.g., Rule 4.1.

  What is offered here are highlights of some of Judge Scheindlin’s comments in this decision. This is neither offered as a complete analysis of the opinion, nor is it postured to be a legal analysis of the opinion with respect to the rules of discovery or other case law.

Continuum of Fault

  In the court’s opinion, Judge Scheindlin addresses the definitions of negligence, gross negligence, and willfulness in the discovery context. She offers a continuum of fault particularly as it relates to the adequacy of the remedy – from additional/further discovery to dismissal or default judgment. While Judge Scheindlin states that the activities described are not meant to be a complete list, what follows is a sampling of conduct she does address, many of which are triggered by the duty to preserve.

Willful or Grossly Negligent Actions/Activities:

• “Failure to collect records… from key players”
• “Intentional destruction of relevant records, either paper or electronic”
• “Destruction of email or certain backup tapes”

Grossly Negligent Actions/Activities:

• “Failure to issue a written litigation hold”
• Failure to collect from former, as well as current, employees when in possession, care, and control of the party

Negligent or Grossly Negligent Actions/Activities:

• Failure to cease the deletion of email or other routine destruction of business records
• Failure to complete a comprehensive search and to supervise/monitor the search for evidence

Negligent Actions/Activities:

• Failure to collect from all employees, in addition to the key employees identified, even “some of whom may have only have had a passing encounter with the issues in the litigation”
• “Failure  to assess the accuracy and validity of selected search terms”

Lessons to be Learned

  While many lessons and procedure modifications can be taken from this opinion, three important topics concern: (1) litigation hold standards (including triggers of the duty to preserve), (2) the preparation of witnesses, and (3) the retention of backup tapes.

Litigation Holds (Including Triggers and Collection)

  Litigation holds are the primary tool in the preservation of evidence. This consists of three types of litigation hold letters; letters from a company representative (quite often, in-house counsel) to the employees of a company, letters from outside counsel to the client, and letters from a party to the opposing party. Judge Scheindlin addresses litigation holds by a party, setting forth the standard that a duty to preserve starts when a party “reasonably anticipates litigation.” When discussing first two types of hold letters, language should address the following:

• Notification “to preserve all relevant records – both paper and electronic”
• Instruction not to destroy relevant information
• Information on the collection process
• Timing of the hold
• Stopping the routine destruction of potentially relevant information

  Triggers to the litigation hold process differ on a case by case basis. For the plaintiff, it is quite often the case that the duty to preserve starts prior to the filing of a litigation as “plaintiffs control the timing of the litigation.” For the defense, it is often the case that the duty to preserve starts no later than the moment that the defendant is served, potentially sooner. It is imperative that litigation holds are written and are sent to all personal that may have a role in the litigation, every those that may have a cursory role or a support function to personnel involved. Litigation hold letters should also have some instruction as to the preservation of the electronically stored information and a direction to avoid trying to perform a self collection.

  Any discussion of a litigation hold should also be backed by a collection process, addressed in part in the Continuum of Fault section above. Many times, it is during the collection process that relevant materials and evidence can be missed, damaged, or modified resulting in spoliation. Collection of evidence should be performed by a person that is trained to do so, and that person should be prepared to testify as to the means and methods. Do not fall victim to the adage that there is “no harm in trying.” Spoliation of electronic evidence is prone to occur (even if innocently) when performed by someone not knowledgeable about, for example, metadata, how to properly mine for data and how to properly process said materials to conform with the applicable discovery rules, including the form of production.

Witness Preparation

  After the collection, knowledge of the collection by a witnesses who is able to discuss the collection process is important to the case when it pertains to the burden of proof of proper preservation, collection, and production of evidence, as Judge Scheindlin discusses, as well as authentication as witnessed by myself in practice. A witness should be prepared to testify as to:

• from where files were collected,
• how the files were searched to find relevant information, including the key terms used and the tools or software employed to conduct the search,
• who conducted the search,
• what the collecting party was told about the search and what was to be (and not to be) searched and excluded, and
• what supervision was in place to monitor the search.

The more complete this information, the more empowered a witness will be during a deposition or at trial and the better prepared a party will be to address issues of spoliation.

Backup Tapes (and Other Forms of Backups)

  Backups, including tapes, have been a long standing issue of contention between parties with regard to their preservation and the costs associated with that preservation and the restoration of the data contained. Backups were initially developed and are still seen by many today as disaster recovery and not as a mode of preservation. Preservation and collection from backups, while potentially costly, may be crucial to avoid spoliation sanctions. This is particularly the case when retention policies routinely overwrite or destroy backups and when a backup is the only source for evidence in a case.

Conclusion

  It is important to protect interests in matters of spoliation of evidence and the associated sanctions. It is crucial for client and attorney to work in concert with each other during the entire discovery process. Cases have been won and lost on matters of electronic information. Clients need to provide all the information possible to their attorneys and attorneys have to work closely with clients so that they understand the process and need for the collection of electronic information.