The Act requires employers defined as “large” to offer that coverage for its “full-time” employees or pay a penalty.  Employers must act now to determine if they are required to provide that coverage (or pay a penalty), and to determine which employees are “full-time.”  The look-back periods for determining large employer status and for determining full-time status must begin in 2013. 

You must determine now: (i) if you are an applicable large employer under the Act, (ii) if so, which employees must be offered health care coverage, and (iii) what penalties you may face for not offering coverage.    Much has been written, and new guidance issues almost daily,but the Sands Anderson Workplace Law Blog has an excellent checklist.  Included there is general ACA guidance in response to questions such as:

1.      Are You a “Large Employer” Subject to the Act?

2.      What Are Minimum Essential Coverage, Affordability, and Minimum Value?

3.      How Do You Determine Which Employees You Offer Coverage to and When the Coverage is Offered?

4.    Play or Pay?

Check out the blog post. 

Given the differences between private employers and public employers, there may well be different results for local governments under some circumstances, such as in determining status as a”large employer,” so getting good advice is essential.  Sands Anderson stands ready to assist both public and private employers with compliance with the Affordable Care Act.

For local government employers having 50 or more employees, the FMLA is already part of your employment law world.

Now, in conjunction with the 20th anniversary of the Family and Medical Leave Act (FMLA), the Department of Labor’s Wage and Hour Division (WHD) issued new regulations along with an updated poster requirement and new forms.  Today, March 8, 2013, is the effective date for the new regulations as well as posting the new poster and using the new forms.

More detailed information is available on the Sands Anderson Virginia Workplace Blog:  http://virginiaworkplacelaw.com/2013/03/08/new-fmla-posters-and-forms-effective-today/

Department of Labor has issued a helpful side-by-side comparison:  http://www.dol.gov/whd/fmla/2013rule/comparison.htm

Again — Happy Anniversary, FMLA!

Congratulations to the local governments who prevailed.

The summaries below are from the Virginia Supreme Court website.  Click on the case number and name to read the opinions:

120384 D.R. Horton, Inc. v. Board of Supervisors [for the County of Warren] 02/28/2013  In a declaratory judgment suit by a real estate developer, the circuit court did not err in ruling that certain building permit fees the developer paid to a county, which were later found to be unlawful, were nonetheless paid “voluntarily” under the common law voluntary payment doctrine, thus defeating the claim for their return. The judgment of the trial court is affirmed.

120634 Norfolk 102, LLC v. City of Norfolk 02/28/2013   Two businesses operating as entertainment establishments serving alcoholic beverages for on-site consumption under previous versions of a city’s zoning ordinance pursuant to a blanket special exception that was later revoked, cannot claim vested rights under Code § 15.2-2307 to a land use that was impermissible under the applicable zoning ordinance when they opened for business. No city official issued a determination under Code § 15.2-2311(C) authorizing use of these business premises in a manner not otherwise permitted under the zoning ordinances. Because the two businesses had notice of and an opportunity to be heard during the city council meeting when their applications for individual special use exceptions were considered and denied, any statutory notice issues were waived under Code § 15.2-2204 and their procedural due process rights were not violated. The circuit court’s judgments denying declaratory and injunctive relief to the businesses, holding that the city acted lawfully in revoking the blanket special exception and in denying the businesses’ applications for individual special exceptions, upholding the determination that the businesses possessed no vested rights, and granting the city’s request for injunctive relief, are affirmed.

120711 County of Albemarle v. Camirand 02/28/2013   In seeking relief in the circuit court from a county board of supervisors’ decision disallowing payment of a portion of certain retirement benefits due to former county employees, based on a miscalculation by a current county employee, the “Appeal Bond” filed by the former county employees did not comply with the requirement for “written notice” of an appeal pursuant to Code § 15.2-1246, and the preamble to this document did not alter its function as a bond. Thus, the circuit court erred in failing to sustain the defendants’ demurrer. Its judgment is reversed, the appeal is dismissed with prejudice, and final judgment is entered in favor of the county defendants.

Expect more discussion on some of these cases on this blog in the near future.

In this opinion, the Fourth Circuit clarified the standard the courts should apply when a claim is made under the Religious Land Use and Institutionalized Persons Act (RLUIPA), 42 U.S.C. §§ 2000cc, et seq., for a “substantial burden ” on a religious organization’s free exercise of religion.  The Fourth Circuit reversed the district court’s grant of summary judgment on the church’s “substantial burden claim” citing two errors by the lower court, but affirmed its grant of summary judgment on other RLUIPA and constitutional claims.

First, the Fourth Circuit held that the district court erred in applying the test for institutionalized persons, rather than a lower standard used by its sister circuits for land use cases.  Specifically, a claimant can succeed in its claim that a land use action violated the “substantial burden” test by “establishing that a government regulation puts substantial burden on it to change its behavior.”  In so holding, the Fourth Circuit joined the 7th, 9th and 11th Circuits.

Second, the Fourth Circuit held that the district court erred in its application of the “substantial burden” standard of RLUIPA by requiring that the land use regulation “target” its religious beliefs or practices.  While that is required under the constitutional standard for free exercise, the Fourth Circuit held, RLUIPA does not contain any such requirement.  If it did, the Court reasoned, a claimant could never prevail as the religious organization could simply locate elsewhere, making the “substantial burden” requirement superfluous.

Applying this clarified “substantial burden” standard, the Fourth Circuit reversed the grant of summary judgment to the county in part, because:

1.  The land use regulation in question prohibited any church structure at all on the property,

2.  The church had presented evidence was sufficient to raise a question of material fact as to whether the church purchased the  property under a reasonable belief (at the time) that it could build a church,

3.  The church had presented considerable evidence that its current facilities were inadequate to serve its worship needs, and

4.  The court had not presented evidence that a less-restrictive means could not serve its interest in “preserving agricultural land, water quality, and open space and managing traffic and noise in the rural density transfer zone,” which the Fourth Circuit assumed without deciding was a compelling interest.

Along with this significant clarification of the “substantial burden” provision of RLUIPA, the Fourth Circuit also affirmed the summary judgment granted to Montgomery County by the District Court of Maryland in many respects, including claims under RLUIPA for religious discrimination (the zoning ordinance was facially neutral as it applied to all institutional uses in a rural preserve area of the county), under RLUIPA’s “unreasonable limitation” provision (the law merely prohibits unreasonable limitations in entire county, and this was one area only), and under the Maryland and U.S. Constitutions’ free exercise and equal protection (under the deferential rational basis test, the zoning ordinance in question served a legitimate public purpose and bore a rational basis to it).

Extensive information is available on RLUIPA from the U.S. Department of Justice at its website here.

This summary is from the Virginia Supreme Court website.  Click on the case name or number to read the order.

121118 Harmon v. Ewing (ORDER) 02/08/2013 In a petition under the Virginia Freedom of Information Act arising from a request for production by a police department of personnel records of a specific officer, such records are subject to the protections of Code § 2.2-3705.1(1) and their production was appropriately refused by the Department; the circuit court’s order requiring disclosure of the personnel records is reversed. The request for criminal incident information including the identities of all individuals, other than juveniles, arrested or charged by this officer must be accommodated by the Department. However, under Code § 2.2-3706 the portion of the request concerning the identities of individuals arrested by other officers based on observations or information supplied by the specified officer seeks information that is exempt from disclosure. Concerning the award of attorneys’ fees in this matter under Code § 2.2-3713(D), the determination of “special circumstances” lies in the sound discretion of the trial court, and this issue must be considered in light of the several holdings in favor of the responding police department on this appeal. The circuit court must reconsider whether to award attorneys’ fees and, if so, the appropriate quantum. The judgment is affirmed in part, reversed in part, and the case is remanded.

110741 Charlottesville Fitness Operators Ass’n v. Albemarle County 01/10/2013 In declaratory judgment suits by commercial fitness club operators against a city and a county challenging the lease of public property to a non-profit organization for the construction and operation of a non-profit family fitness and recreation facility, along with a use agreement governing the leased property entered into between the city, county, and the non-profit entity, the claims asserted by the fitness clubs do not present a justiciable controversy over which the circuit courts could exercise subject matter jurisdiction. Accordingly, the judgments are vacated and the declaratory judgment actions are dismissed.

The summary is from the Virginia Supreme Court website.   Simply click the case number above to read the opinion.

As a representation of the award, the LGA gave me an enormous plaque with the LGA Board of Directors resolution on it, and issued a press release.  Word spread among local governments through newsletters such as VACo’s County Connections.  My firm, Sands Anderson, congratulated me with a receiption afterwards and two huge banners.  I think my office will fit the plaque.  I’m not so sure about the banners!  The LGA also gave me a gift, a Verizon gift card .  Given the enormous litigation with Verizon in the SCC in 2010-2011 in which we participated as counsel on behalf of 29 Virginia localities, I thought it was an interesting touch of irony.  (I need a new smart phone … mine’s hardly smart at all.)

Many friends, colleagues and clients congratulated me afterwards, telling how well deserved the award was, how they could not think of anyone more deserving.  LGA founder and long-time friend, John Foote told me that my receipt of the award was a “generational shift” from the previous recipients.  Given the fact that I joined the Arlington County Attorney’s Office in 1994 and Ed died in 1993, I never had the chance to meet Ed Finnegan.  That is a shift.  All of the previous recipients knew Ed.

At the reception hosted by Sands Anderson, I spoke with another long-time friend, Liz Whiting, who is Ed’s widow.  I was reminded that she is a former LGA President, served on the LGA Board of Directors and was involved in the process to nominate a young 29-year old Culpeper County Attorney to the LGA Board.  She kindly said that she “had an eye for talent.”  That cannot help but make you smile.

Thanks to the LGA, the Board of Directors, the Awards Committee and all of the folks whom nominated me and supported me.  Thanks to my family for its sacrifice to allow me to serve my clients and be active in the LGA.  Thanks to my law firm, Sands Anderson PC and my clients who allow me the ability to conduct a statewide local government practice.  I am pleased and honored and blessed.

112193 3232 Page Ave. Condo. Ass’n v. City of Virginia Beach 11/01/2012 In a city’s suit to condemn certain easements in connection with a beach replenishment project, while alternatively claiming ownership of the easements, the circuit court had jurisdiction and was required to determine ownership of the condemned property as part of the condemnation proceeding. Based on public use and the city’s exercise of dominion and control over the property, there was sufficient evidence proving that there was an implied dedication of this property and acceptance thereof by the city. Accordingly, the circuit court did not err in finding that the city had acquired ownership of the easements by implied dedication. The judgment of the circuit court is affirmed.

120086 Lynnhaven Dunes Condo. Ass’n v. City of Virginia Beach 11/01/2012 An authorizing ordinance fully encompassed the actions of a city in bringing a quiet title action in the nature of a condemnation proceeding, and the evidence was sufficient to support the circuit court’s ruling that the city had proved that it had acquired certain easements by implied dedication. The circuit court erred, however, in ruling that a condominium association’s loss of riparian rights caused by the creation of a sand beach was non-compensable. The beach replenishment project was not sufficiently related to the dredging of an inlet for navigation purposes because failure to place sand on a beach adjacent to plaintiff’s property would not have substantially impaired the dredging operation. Accordingly, rulings of the circuit court are affirmed in part and reversed in part, and the matter is remanded for a just compensation hearing to determine the value of plaintiff’s riparian rights.

The summaries are from the Virginia Supreme Court website.   Simply click the case number to read the opinion.

First, at the Local Government Attorneys of Virginia conference in Alexandria, I’ll be speaking on Virginia case law.  All of these cases have been mentioned on this blog.  I’m looking forward to serving on this panel that includes other fine local government attorneys including Stephen A. MacIsaac, Arlington County Attorney.  (Arlington County is my former employer which gave me my start in the full-time practice of local government law!)  Also on the panel is Stephen C. Piepgrass, of Troutman Sanders, and the moderator is Gregory Haley, of Gentry Locke.

Next, at the Plan Virginia Commonwealth Land Use and Zoning Conference in Lynchburg, I’ll be speaking about the constitutional bases and limitations on local government zoning authority, local planning commissions and their relationships with governing bodies, and finally on the adoption, review and amendment of local government comprehensive plans.

Glad to be out speaking to clients, friends, and colleagues.  Hope to see you on the road!

Actually, that is not true.  While no opinions involved cases with local government parties, and may not deal with “local government law,” per se, one opinion addresses issues of which local governments should be aware.  This case, involving an inverse condemnation claim against Dominion Virginia Power for an alleged taking due to impacts of power lines on adjacent property, involved issues of the scope of the takings clause of the Virginia Constitution, and whether the subject claim fell within the ”or damage” language in that clause and its waiver of sovereign immunity.

The following summary comes from the Virginia Supreme Court website (click on the case number to read the opinion):

112112 Byler v. VEPCO 09/14/2012 In two actions seeking recovery for reduction in property values because of a public utility’s construction of high-voltage electric lines for public use, the complaints did not, and could not, state a cause of action for declaratory relief for inverse condemnation where the sole damage alleged was a diminution in value owing to a proximity to property taken for a public use by eminent domain. Article I, Section 11 of the Constitution of Virginia does not function to waive sovereign immunity for the Commonwealth and its proxies in order to subject them to liability as private parties for any damage asserted by a property owner that might conceivably arise from an exercise of eminent domain, but operates as a waiver of immunity from having to pay compensation for the taking or damaging of a property right. Thus, while the circuit court applied the wrong standard in reviewing the pleadings, its judgment sustaining the demurrers was nonetheless correct under the proper standard.

Cover of George Gershwin

Summer began by speaking to a number of local government officials and attorneys at training sessions of Plan Virginia (formerly CPEAV) and the Local Government Attorneys of Virginia (LGA), and participating in conferences of the Treasurer’s Association of Virginia and the Virginia Local Government Management Association.

It accelerated with a number of local government meetings, litigation matters and deadlines, including a mediation on annexation.  This week, fellow Sands Anderson attorneys Steve Durbin, Sarah Warren Beverley and I are finishing the annual survey of Virginia local government law for the University of Richmond Law Review‘s annual survey edition. 

I did take some time off, so summer was not all work and no play!

With all that said, I apologize to the readers of this blog that the posts on Virginia Local Law have been lacking this summer.  But as August is here and Fall is around the corner, I expect that blog posts — like the cycle of life itself — will begin again.

In the meantime, take it easy.

The cases involve (1) an inverse condemnation claim against VDOT for flooding, (2) another application of the principles of West Creek Associates and TB Venture in a City of Richmond assessment appeal case, (3) the ability of landowners to amend proffers on their land despite opposition from neighbors covered by the same proffers in a Town of Leesburg case, and (4) the application of the FOIA definition of “meeting” in the context of email exchanges between local school board members in a Fairfax County School Board case.  In this last case, the Local Government Attorneys of Virginia, Inc. filed an amicus brief in support of the school board.

While VDOT did not prevail, I am pleased to note that the local government entities did. Congratulations to the winners.

The following summaries come from the Virginia Supreme Court website (click on the case number to read the opinion):

101006 Livingston v. Va. Dep’t of Transportation 06/07/2012 In a suit for property damage under the Just Compensation Clause in Article I, Section 11 of the Constitution of Virginia, it is held that a single event of flooding can support an inverse condemnation claim, and that the plaintiffs’ allegations that their homes and various items of personal property were damaged for a public use under Article I, Section 11 are sufficient to withstand demurrer. When VDOT constructs an improvement for the public benefit, it does not thereby become an insurer in perpetuity against flood damage to neighboring property, but a property owner may be entitled to compensation under Article I, Section 11 if VDOT’s operation of that improvement causes damage to real or personal property. Thus, where VDOT relocated the channel of a waterway in order to permit highway construction, but failed to maintain the relocated channel via dredging or otherwise, and that failure is alleged to have impacted the magnitude of the damage plaintiffs suffered as the result of the single flooding event at issue, VDOT’s choice not to maintain the relocated channel evinced its election to use the highway and nearby residential developments as makeshift storage sites for excess stormwater instead of allocating its resources to maintain the relocated channel. The contentions that plaintiffs lack standing to maintain an inverse condemnation suit and that they cannot recover under Article I, Section 11 for damage to personal property, are rejected. The circuit court’s judgment is reversed and the case is remanded for further proceedings.

110820 City of Richmond v. Jackson Ward Partners 06/07/2012 In a taxpayer’s challenge to city real estate taxes assessed for multiple tax years on structures located on eight tax parcels that were renovated for use as a low-income, affordable residential housing development, the taxpayer failed to carry its burden to prove the fair market value of the eight parcels of real property at issue. By appraising the eight separate, non-contiguous parcels of real property in bulk as a single apartment complex, i.e., as one tax parcel, and then assigning a value to each tax parcel based on a mathematical calculation, the taxpayer’s appraiser failed as a matter of law to carry its burden to prove the fair market value of each parcel. For these reasons, the judgment of the circuit court is reversed and the case is remanded for entry of an order reinstating the city’s tax assessments on the eight parcels for the tax years in question.

111658 Town of Leesburg v. Long Lane Associates 06/07/2012 In litigation challenging the rezoning of certain property, the circuit court erred in finding that a locality needs the consent of a neighboring property owner to rezone a parcel that was originally part of an undivided property, to which certain proffers applied. While the landowner has a vested right under Code § 15.2-2307 in the land use allowed by a subdivision rezoning ordinance, it has no vested right in its expectation that neighboring properties would continue to develop in accordance with the zoning they had at the time the landowner purchased its property and developed it in accordance with the prior proffers, even where the property was subdivided from a parcel which was rezoned subject to proffered conditions. Code § 15.2-2303(A) does not require all successors in title to agree prior to any portion of the subdivided parcel being rezoned. The town acted pursuant to its statutory authority in rezoning the neighboring property and granting it a special use permit, and there is no evidence that its actions were unreasonable. A landowner cannot acquire a vested right in a road shown on a town plan. The town’s amendment of the town plan was a legislative act that did not require the landowner’s consent and was not unreasonable. The judgment of the circuit court is reversed and final judgment is entered.

111805 Hill v. Fairfax County School Board 06/07/2012 In proceedings under the Virginia Freedom of Information Act, Code § 2.2-3700 et seq., the circuit court did not err in determining that certain exchanges of e-mails between members of a local school board did not constitute a “Meeting” within the meaning of Code § 2.2-3701 and, thus, did not violate the notice and open meeting requirements of the Act. Nor did the circuit court err in concluding that because the citizen requesting information under the Act had not substantially prevailed on the merits of the case as provided in Code § 2.2-3713(D) in the principal focus of the petition, she was not entitled to an award of attorneys’ fees and costs. The judgment of the trial court is affirmed.

Look for more on some of these cases on this blog.

The cases involve (1) the Gloucester County School Board and the Public Procurement Act, (2) Albemarle County and sovereign immunity, (3) a Spotsylvania County assistant high school superintendent and a claim of negligent and gross negligent failure to prevent an attack on another student, and (4) the City of Hampton and the standing of the plaintiff, a committee of petitioners authorized to act under the City Charter.

The following summaries come from the Virginia Supreme Court website (click on the case number to read the opinion):

110410 Professional Bldg. Maintenance Corp. v. School Board 04/20/2012 In a lawsuit asserting causes of action under the Virginia Public Procurement Act, Code § 2.2-4300 et seq., the plaintiff’s allegations that it submitted the lowest bid in response to a contract solicitation by a county school board, which failed to either award it the contract or to determine that plaintiff was not “responsible” as required by the Act, and that certain scores given to its bid had no basis in fact and did not bear a rational relationship with the information provided, were not merely conclusory averments, and sufficiently state a cause of action under the Act. Thus the circuit court erred in sustaining the defendant’s demurrer, and the action is remanded for further proceedings consistent with this opinion.

110733 Seabolt v. County of Albemarle 04/20/2012 The circuit court lacked subject matter jurisdiction to hear a tort claim against a county arising from the alleged failure to maintain a public park, and did not err in dismissing the complaint. Counties, as political subdivisions of the Commonwealth, enjoy the same tort immunity as does the sovereign and cannot be sued unless and until that right and liability are conferred by law. Neither the Virginia Tort Claims Act, nor the recreational facilities statute, Code § 15.2-1809, waives the immunity of Virginia counties from tort claims, and the presentment and appeal provisions in Code §§ 15.2-1243 et seq. also do not abrogate sovereign immunity of counties in tort. The judgment of the circuit court dismissing the complaint is affirmed.

110754 Burns v. Gagnon 04/20/2012 In a suit alleging negligence and gross negligence against an assistant high school principal for failure to prevent an attack upon the plaintiff by a fellow student, there was no evidence that this defendant knew or should have known that plaintiff was in danger of serious bodily injury or death, and no “special relationship” is found between principal and student. The principal had a duty to supervise and care for the plaintiff as a reasonably prudent person would under similar circumstances. The issue whether he undertook the duty to investigate a reported threat of an impending attack, and to notify security personnel, is a factual matter to be determined on remand, along with whether plaintiff can show the elements for liability set forth in the Restatement (Second) of Torts § 324A. While the principal does not have immunity under Code § 8.01-220.1:2, common law sovereign immunity applies because he was required to exercise judgment and discretion in responding to the reported threat of an attack. However, the common law immunity of the principal does not obviate claims for gross negligence, and the trial court erred in refusing to instruct the jury on that theory. Various statements admitted in the prior trial were either non-hearsay or admissible under an established hearsay exception, and thus it was not an abuse of discretion to admit them. The case is affirmed in part, reversed in part, and remanded for a new trial limited to the gross negligence claim against this defendant.

111144 Deerfield v. City of Hampton 04/20/2012 In a declaratory judgment proceeding against a city and a developer, brought by a committee of citizens initially constituted pursuant to a city charter provision to seek a referendum on repeal of an ordinance, the circuit court did not err in dismissing the action, albeit for the wrong reason. After the city council’s action repealing the ordinance, the citizens’ committee lacked standing to challenge the development. The judgment of the circuit court dismissing the committee’s complaint is affirmed.

Look for more on some of these cases on this blog.

As is typical, I found the Justices to be polite, attentive, intelligent and inquisitive.  Not surprisingly, the justices asked good questions which went to the heart of the issues to be decided.  I came away with a renewed respect for the Court and our Virginia judicial system.  ….  And this was BEFORE I learn what they decide in my client’s case!

As it typical, there were a number of spectators in attendance.  If you have never observed at oral argument, consider doing so.  I have attended many oral arguments in recent years in local government cases, and have learned a bit about how the justices think and act in general, and some of their views on local government issues in particular.  I’ve found this information to be valuable in advising my local government clients.

The Supreme Court room is awesome, in the traditional sense of the word – it inspires awe.  If you get there a bit early, you can sit there and have few distractions.   The Court does not allow any cell phones, smart phones or other electronic devices.  You have time to observe the enormous temple-like columns behind the dais, the veil of velvet hangings in between, the paintings on the walls of former justices with stern faces, the three-story high ceiling, the thick red carpeting, the long pew-like seats for the spectators, the lonely-looking podium for the one making argument.  You get to sit, in near total silence.  In today’s busy, connected society, there are few times available to you to be disconnected.  Enjoy it.

A few minutes before the arguments start, the Clerk, in a kind voice, gives a briefing of what to expect and how to make the best impression upon the justices (“Always start with ‘May it please the Court, my name is….’”).  There are a few hushed conversations here and there, but there is mostly silence, with plenty of time to simply sit, free of electronic distractions and take in the beautiful and imposing room.

Giving oral argument at the Virginia Supreme Court is participating at the highest level of our state government, in the judicial branch.  It an important responsibility, not only to your client, but to the Commonwealth of Virginia itself.  I have enjoyed my times there.  I hope that one day you get a chance to give or attend an oral argument there.

The 2012 honorees include a number of women attorneys who practice in local government.  They include:

• Ann Neil Cosby, Sands Anderson PC, Richmond (also Deputy County Attorney for Caroline County and author of the Virginia Environmental Law Blog)

• Alexandra Fannon, Greater Richmond Bar Foundation, Richmond (formerly City of Richmond Attorney’s Office)

• Cynthia Hudson, Hampton City Attorney, City of Hampton (our very own LGA Secretary-Treasurer)

Although not an attorney, the 2011-2012 President of LGA member Virginia Municipal League (and City Council member in Virginia Beach), Rosemary Wilson, is also honored.

The honorees will be celebrated at a gala luncheon on May 10 at the Richmond Marriott in downtown Richmond. The “Influential Woman of the Year” for 2012, to be voted on by the 2012 honorees themselves, will be announced at this luncheon.

Congratulations to all of those honored, and for such a great showing by some of our fine local government attorneys!

102409 City of Richmond v. SunTrust Bank 03/02/2012 The question presented by this appeal is whether a municipal corporation has the authority to tax a non-exempt entity for the exempt entity’s ownership interest in property owned by the two entities as tenants in common. Because the municipal corporation’s arguments based on purportedly applicable case authority and a non “public purpose” use theory are without merit, and its statutory authority argument is procedurally barred, the circuit court’s judgment ruling that the city lacked the authority to impose the tax is affirmed.

Analysis of this case will be forthcoming from this blog.

Bus drivers in Albemarle County claimed that their rights under the Federal Labor Standards Act (FLSA) were violated, and sought unpaid wages, overtime, liquidated damages and attorney’s fees pursuant to 29 U.S.C. § 216(b) in a federal lawsuit filed in the U.S. District Court for the Western District of Virginia.  The Albemarle County School Board reported these claims to its CGL insurer, Republic Franklin Insurance Company, which denied coverage saying the claims were not “losses” arising from a “wrongful act” covered by its CGL policy.  On cross-motions for summary judgment, the federal judge agreed, finding in favor of the insurance company.  The court reasoned that payment of due wages and overtime was a “pre-existing duty” and therefore was not a “loss” and not a “wrongful act.” 

The Albemarle County School Board appealed, arguing that an FLSA violation was, indeed, a “wrongful act” and that although payment of due wages and overtime was a pre-existing duty, the payment of the liquidated damages and attorney’s fees was not, and therefore was a “loss” under the CGL policy.

The Fourth Circuit Court of Appeals (Niemeyer, Motz and Floyd, Circuit Judges) agreed with the School Board.

The Fourth Circuit held that the district court incorrectly used the “pre-existing duty” doctrine too broadly to not only negate any coverage for due wages and overtime, but also to find no “wrongful act” and no “loss”.  The Fourth Circuit cited the language of the CGL policies which call for insurance company liability in the event of a “wrongful act” — broadly defined to include  ”any breach of duty.”   A violation of the FLSA is plainly such a breach. 

The Fourth Circuit similarly relied upon the CGL’s policy’s definition of “loss” to include “any amount which an insured is legally obligated to pay as damages.”  The Fourth Circuit cited controlling U.S. Supreme Court precedent that the liquidated damages are not “fines or penalties.”  Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 707 (1944).  The Court also relied upon as persuasive Eleventh Circuit and U.S. District Court for the Eastern District of Virginia precedent that in the FLSA context liquidated damages and attorney’s fees are compensatory and not punitive in nature. Snapp v. Unlimited Concepts, Inc., 208 F.3d 928,934-35 (11th Cir. 2000); Lanza v. Sugarland Run Homeowners’ Association, 97 F. Supp. 2d 737, 740 (E.D. Va. 2000).

In summary, the Fourth Circuit stated, “because the underlying FLSA complaint against the School Board asserts claims for liquidated damages and attorneys’ fees arising, not from a preexisting duty, but because of the School Board’s alleged wrongful acts, we conclude that they are damages resulting from a claim for the alleged wrongful act and therefore are covered losses.”

This decision is significant for local entities that may be subject to FLSA claims because it squarely places FLSA claims within the scope of most CGL policies as alleged “wrongful acts” which may result in a “loss” insurable (and therefore to be defended) by their insurance companies.

That was the situation in rural Highland County, where private property owners erected a gate and blocked access to a roadway long used by the public.  This dispute  lead to a lawsuit by members of the public against the property owners and a recent opinion of the Virginia Supreme Court in the case of Dykes v. Friends of the C.C.C. Road, decided January 13, 2012.

Stipulated facts showed that the roadway in question was originally built and used by the Civilian Conservation Corps, the “C.C.C.” in the 1930s.  The roadway was used since then by the public for access between river valleys in the mountainous area, and for access to the George Washington National Forest.  Various public officials used the roadway on official business and considered it a public road.  In 1941, the Highland County Board of Supervisors noted an agreement for the private property owner to maintain a gate a cattle guard on the C.C.C. road at its intersection with a state highway.  If the property owner failed to do so, the state highway department (today, VDOT) “may remove [the] gate and cattle guard.”

However, no government record shows that either the County or the state formally adopted the road as public, and the road was not shown on official VDOT maps.  In fact, a VDOT official in 2001 advised a private property owner along the C.C.C. road that such ”emergency fire trails … established on private property, with the permission of the landowners, by the Civilian Conservation Corps … were never official state maintained roads, nor did the Commonwealth have legal easement to use them.  The trails belong to landowners on [whose property] they cross.”   Private property owners who erected the gate gave keys to other private property owners along the C.C.C. road and also the Sheriff’s Office, and utility company, and offered keys to the Forestry Service.

The Friends of the C.C.C. Road made two basic claims.  First, that the road was impliedly dedicated as a public road and accepted by long use by the public and government officials.  Second, that the public gained rights to use the roadway by prescription by long continuous use and “recognition”of public use by the government.  The circuit court ruled against the Friends of the C.C.C. Road on the first argument, but ruled in their favor on the second, reasoning that the 1986 Virginia Supreme Court opinion in Burks Brothers of Virginia, Inc. v. Jones supported unrestricted public use of the road.

On appeal, the Virginia Supreme Court ruled against the Friends of the C.C.C. road on both claims.  While the Supreme Court agreed with the circuit court that the C.C.C. road was not a public road by dedication and acceptance, it disagreed with the circuit court that the right of way could become public through prescription arising from long use and government recognition of that use.  

Like the circuit court, the Supreme Court found no evidence of express dedication by the property owners or acceptance by the government.  The Court noted that unlike dedication which could be implied, government acceptance of a public road must be express.  Therefore, the Court held that the Friends of the C.C.C. Road failed to prove that the road became public through dedication and acceptance.

The Court similarly held that a public easement or right-of-way cannot be acquired solely through long and continuous use by the public and “recognition” of that use by the government without formal acceptance, saying, “The law of this Commonwealth simply does not allow for a conversion of private property to public property solely by public use.” 

On the claim of the Friends of the C.C.C. Road that the roadway became public through prescription, the Supreme Court noted that no prescriptive rights can be obtained by the public at large.  The Court noted that one required element of a prescriptive right, exclusivity, was lacking because the general public — by definition — excluded no one.  While a long and continuous public use can imply a dedication by the property owners, it cannot create a prescriptive easement. 

The Court said that the sentence from the Burks case relied upon by the circuit court did not support prescriptive rights without government acceptance, but rather simply confirmed that use by the general public –lacking in Burks — was necessary element of a prescriptive right of way.  The Court stated that an implied dedication through long public use could give rise to a public right of way, but it must be coupled with an “affirmative act by a competent authority of acceptance of the dedication the use implies.”  Such an express acceptance was wholly lacking here.

This opinion reaffirms long-standing principles — the “rules of the road,” if you will — on road dedication and creating prescriptive rights of way.  In this case, the lack of any formal acceptance of the road or roadway as public doomed the claims that the C.C.C. road was public. 

The Dykes case has reaffirmed that, under Virginia law, the government, and not the public, decides whether a road is to be public.

The Virginia Freedom of Information Act (VFOIA) grants “citizens of the Commonwealth” (and representatives of media in Virginia) access to public records.  Non-Virginians who had ties to Virginia only through divorce, child custody and child support decrees (McBurney, a citizen of Rhode Island)  and business gathering public information for sale to customers (Hulbert, a citizen of California) challenged the VFOIA “citizens only” provision on two grounds.

First the Appellant challengers argued that the “citizens-only” provision violated the Privileges and Immunities Clause of Article IV of the United States Constitution.  The Fourth Circuit Court of Appeals disagreed, saying that the rights granted under the VFOIA are not “fundamental rights” sufficiently basic to the livelihood of the nation so to be protected under the Privileges and Immunities Clause. 

The Court held that the rights asserted by Appellants which previously had been recognized as fundamental in this context — the right to access courts and the right to pursue a common calling — were not implicated by the “citizens only” provision of VFOIA.  The Court held other rights asserted by the Appellants that were implicated by the VFOIA — “equal access to information” – were simply not fundamental within the meaning of the P&I Clause.  In so doing, the Court distinguished a similar Third Circuit Court of Appeals case (Lee v. Minner, 458 F.3d 194 (3d Cir. 2006)) by reasoning that the right asserted here (equal access to information) was simply not the same right asserted in Lee (engaging in the political process).  The Court also reasoned that the right to information under VFOIA was not a right directly related to litigation, saying that the P&I Clause “is not a mechanism for pre-lawsuit discovery,” and access to information pre-lawsuit was no sufficiently basis to be a fundamental right under the P&I Clause.

Next, one of the Appellants (Hurlbert) challenged the citizens-only provision of the VFOIA under the Dormant Commerce Clause, a “negative implication of the U.S. Constitution’s Commerce Clause.  U.S. Constitution, art. I, section 8, cl. 3 empowers Congress “[t]o regulate Commerce … among the several States.” 

This clause is intended to stop state from erecting barriers to interstate trade either intentionally or in effect.  Thus, it has two tiers.  The first tier strictly prohibits facial discrimination in its practical effect or in its purpose against interstate commerce.  The second tier is less strict, but prohibits regulatory measures which “unjustifiably … burden[s] the interstate flow of articles of commerce.”  Under the second tier, the regulatory measure “will be upheld unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits.”

The Court held that the VFOIA is simply not the kind of statute to which the Dormant Commerce Clause applies.  The VFOIA “is wholly silent as to commerce or economic interests, both in and out of Virginia.  Therefore, the VFOIA does not facially, or in its effect, discriminate against inter-state commerce or out-of-state economic interests.”  Moreover, the Court held that Hurlbert did not adequately preserve a challenge to the district court’s use of the second tier to analyze his challenge.

So, at least in the Fourth Circuit, and at least under these facts, the Virginia Freedom of Information Act’s “citizens only” provision does not violate the Privileges and Immunities Clause or the Dormant Commerce Clause.  It is legal for the Commonwealth of Virginia to allow its citizens the right to access state and local government public documents while denying non-Virginia citizens that same right.

In McBurney v. Young, in a way, the Fourth Circuit Court of Appeals has reaffirmed the basic sovereignty of the several states of our grand Republic.

If these bills pass the proposed amendment in the same form as last year, the amendment will be on the ballot in Fall 2012 for voter approval.   This blog, which until now has been silent on the topic, now weighs in as a source for information on the proposed amendment.

First, the con view.

Some have asserted that eminent domain authority can be (and is) set by statute, and a constitutional amendment is unnecessary.  They note that the General Assembly has heavily amended the statutes authorizing eminent domain to address (and arguably over-address) the Connnecticut-based Kelo case, thus making the amendment arguably unnecessary or at least premature, until the true impacts of the statutory amendments are known.  Thus, “Virginia would be wise to allow the 2007 reforms to be fully implemented before pursuing any additional legislation for a problem that may no longer exist.”  See Craig Wilson op ed, “Eminent Domain Amendment Unnecessary in Virginia,” published March 5, 2011.

A major criticism of the proposed amendment is the cost to taxpayers.  Additional moneys will be required to condemn anything, even for scenarios in which the public purpose is unquestioned, like a condemnation for a needed school or an improvement to a crowded intersection.  Additional awards to landowners will be mandated for “lost profits” and “lost access”, heretofore not recognized as a property right (except for a complete or “unreasonable” loss of access).  The Roanoke newspaper said this:  “State lawmakers must take a more discerning approach and defeat this amendment. The constitution should be reserved for long-standing principles, not used as a test tube for untried feel-good measures. This is one experiment Virginia taxpayers cannot afford.”  See Roanoke Times editorial:  “A Costly Over-Reach on Condemnation: A proposed constitutional amendment would force taxpayers to pay more for roads and utilities.”

Although there is likely no real way to know the total fiscal impact, or the impact on individual projects being delayed or canceled because of additional cost, the official state fiscal impact study estimates the annual cost to taxpayers would be $36 million.  This is due to requirement that new sources of damage awards never before recognized will be added — lost profits and lost access. 

“Lost profits” are not real property and therefore not part of the condemned property.  They are incidental costs to a landowner’s business and very difficult to discern given the variety of factors in determining a profit.  “Lost access” is typically not real property, either, as a landowner only has a right to “reasonable” access to a public street.  The government’s police power to provide for safe, effective transportation for the public trumps any particular mode or route of access.  The proposed amendment may make these non-realty business interests compensable in a taking of land for the first time.

Others have raised concerns about the wording and the harm that may befall the Commonwealth’s economic development efforts if a necessary access road or utility easement for a major potential user cannot be promised in a timely fashion (or at all).  These concerns are not just from governments, they come from businesses as well.  For example, the Northern Virginia Chamber Partnership — comprised of the Dulles Regional, Greater Reston and Loudoun County chambers of commerce — announced the formation of a broad coalition of business organizations across Virginia to oppose the proposed constitutional amendment regarding eminent domain.  In a press release, Tony Howard, President and CEO of the Loudoun County Chamber of Commerce, stated that “all Virginians agree that private property rights are fundamental; however, the proposed constitutional amendment suffers from serious flaws that have the potential to stop critical infrastructure in its tracks and to jeopardize Virginia’s economic recovery. ….  In the current economic climate, Virginia can ill afford to diminish its competitiveness with other states and reduce its ability to attract the investments that will create much needed jobs for Virginians.”  You can read more on Chamber of Commerce efforts to oppose the proposed amendment here.

As noted, a large number of business-related organizations oppose the wording of the proposed amendment, and sent a letter to the members of the General Assembly on January 18, 2012, opposing passage.  These organizations included American Council of Engineering Companies of Virginia (ASEC-VA), Apartment and Office Building Association of Metropolitan Washington, CenturyLink, Community Planning Partners, Greater Richmond Association for Commercial Real Estate, Hampton Roads Association for Commercial Real Estate, Home Builders Association of Virginia, NAIOP Northern Virginia, Northern Virginia Building Industry Association (NVBIA), Northern Virginia Chambler Partnership, Northern Virginia Transportation Alliance, Old Dominion Highway Contractors Association, Portsmouth Partnership, Prince William Chamber of Commerce, The Virginia Society – American Institute of Architects (VSAIA), Virginia Association for Commercial Real Estate, Virginia Association of Realtors, Virginia Beach Vision, Virginia Society of Professional Engineers (VPSE), Virginia Telephone Industry Association (VTIA) and Virginia Transportation Construction Alliance.

Hanover County Attorney and Legislative Liaison Sterling Rives has noted a number of concerns about the wording of the proposed amendment in an op ed published in the Richmond Times-Dispatch on January 9, 2012, “Eminent Domain Amendment Needs More Work.”  He points out that there are some unintended pitfalls in the proposed amendment.  He states that ”the specific language and provisions of the pending proposal are seriously flawed. If approved as currently drafted, this amendment will cost Virginia taxpayers dearly and will severely hamper economic development in the commonwealth. A flawed constitutional amendment, once approved, is time-consuming and extremely difficult to remedy. The General Assembly owes it to the taxpayers to get this right.”

Another concern may be that, as proposed, the language of the actual constitutional amendment will not be on the ballot at all.   See HB 5 here.  SB 240 is identical.  The actual constitutional amendment states in significant part:

“That the General Assembly shall pass no law whereby private property, the right to which is fundamental, shall be damaged or taken except for public use. No private property shall be damaged or taken for public use without just compensation to the owner thereof. No more private property may be taken than necessary to achieve the stated public use. Just compensation shall be no less than the value of the property taken, lost profits and lost access, and damages to the residue caused by the taking. The term “lost profits” and “lost access” are to be defined by the General Assembly. A public service company, public service corporation, or railroad exercises the power of eminent domain for public use when such exercise is for the authorized provision of utility, common carrier, or railroad services. In all other cases, a taking or damaging of private property is not for public use if the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development, except for the elimination of a public nuisance existing on the property. The condemnor bears the burden of proving that the use is public, without a presumption that it is.”

This language will not appear on the ballot.  Instead, the ballot will only include the following question:

“Question: Shall Section 11 of Article I (Bill of Rights) of the Constitution of Virginia be amended to eliminate the General Assembly’s authority to define a public use for which private property may be taken or damaged and to provide that no private property shall be taken or damaged for a public use without just compensation to the property owner and that only so much of the property as is necessary to achieve the public use is taken or damaged?”

One can argue that this proposed ballot text is not fairly descriptive of the amendment’s actual language, let alone describe its various parts or legal effects.  Several of the more problematic parts of the amendment described by Mr. Rives are not referenced in the ballot question at all.  One might ask, do we trust the voters to know exactly what they are voting upon?

Now, the pros.

Virginia Attorney General Cuccinelli responded to some of the criticisms and made his case in favor of the proposed amendment in an official Attorney General’s Opinion, dated January 26, 2012.  He opines, among other points, that compensation for lost profits will not be payable to a  business owner if his land is not taken, and that, assuming the condemnor’s proposed use meets the new definition of “public use”, a condemnor can use condemnation to replace a sprawling development with a mixed use, compact one.  Of course, that definition prohibits any condemnation if the “primary” use is to increase jobs or for economic development.  You can find his opinion here.  

The Attorney General has also appeared before a House subcommittee to lobby in favor of the proposed amendment.  In response to concerns over the estimated $36 million annual cost, he argued that this $36 million annual cost is now absorbed by private business owners.  He asserted that the current law was “morally wrong” not to compensate the business owners in these new ways.

In response to critics who complain that the public does not know how the terms “lost access” and “lost profits” will be defined and how these will be determined, ”companion bills”  have been introduced to do so.  These bills would provide the statutory basis for considering lost profits and lost access in a condemnation award, as well as define these terms as authorized in the proposed amendment.  See HB 597 here.  See HB 1035 here.  See SB 437 here.  

Proponents of the proposed amendment argue that this is a logical step and necessary as the political pressure to protect individual property rights from eager governments begins to ebb, and criticizes local government as being opposed, essentially saying that local governments were opposed to the current statute and will always be opposed to eminent domain reform.  Some even assert that conservatives and liberals alike should favor the proposed amendment.  See Barton Hinkle’s column published in the Richmond Times-Dispatch on November 25, 2011.

Many proponents see the constitutional amendment as simply enshrining existing property rights and call the opponent’s concerns and arguments about soaring costs “hollow.”  See Delegate Mark Obenshain’s commentary, “Property Rights Need Constitutional Protection,” published on January 22, 2012 in the Richmond Times-Dispatch.  Others see this as a logical re-ordering of priorities and the first reconsideration of Virginians’ constitutional property rights in a hundred years. See eminent domain lawyer Jeremy Hopkins’ op ed, “Debunking property rights amendment fears: Virginians need measure to temper eminent domain” published in the Washington Times on January 22, 2012.

In summary, it appears that if this amendment takes effect, private landowners will gain new rights and new protections for existing rights, costs for public projects will rise significantly, private business owners will get more money in awards, condemnation will be made far more difficult in many cases, and condemnation will be unconstitutional even if for needed economic development that affects no one’s home or business.  No one truly knows the fiscal impacts of this proposal, or the ultimate legal effect of calling property a “fundamental right.”  Opponents are very concerned and point out that it would take years to amend the Virginia Constitution again if the impacts prove to be unaffordable or undesirable over time.  Proponents say the opponents are alarmists on the impacts, and we need to protect private property rights and business owners and to this degree.  

Whether this amendment is good or bad depends on who you ask, and if adopted, we will all know soon enough.

___________________

Update:  SJ 3 cleared the Senate on 23-17 vote on February 13, 2012.  All 40 Senators voted.  Here are the results of the vote:

SJ 3 Constitutional amendment; taking or damaging of private property for public use (second reference).

floor: 02/13/12  Senate: Agreed to by Senate (23-Y 17-N)

YEAS–Black, Carrico, Deeds, Edwards, Garrett, Hanger, Martin, McDougle, McWaters, Newman, Norment, Northam, Obenshain, Petersen, Puckett, Reeves, Ruff, Smith, Stanley, Stosch, Stuart, Vogel, Wagner–23.

NAYS–Barker, Blevins, Colgan, Ebbin, Favola, Herring, Howell, Locke, Lucas, Marsden, Marsh, McEachin, Miller, J.C., Miller, Y.B., Puller, Saslaw, Watkins–17.

Update:  HJ3 passed the House on February 13, 2012 on an 80-18 vote.  Two members did not vote.  Here are the results of the vote.

floor: 02/13/12  House: VOTE: ADOPTION (80-Y 18-N)

YEAS–Albo, Alexander, Anderson, Bell, Richard P., Bell, Robert B., Bulova, Byron, Cline, Cole, Comstock, Cosgrove, Cox, J.A., Cox, M.K., Crockett-Stark, Dance, Dudenhefer, Edmunds, Fariss, Farrell, Garrett, Gilbert, Greason, Habeeb, Head, Helsel, Hodges, Howell, A.T., Hugo, Iaquinto, Ingram, Joannou, Johnson, Jones, Keam, Kilgore, Knight, Kory, Landes, LeMunyon, Lewis, Lingamfelter, Loupassi, Marshall, D.W., Marshall, R.G., Massie, May, Merricks, Miller, Minchew, Morefield, Morris, O’Bannon, O’Quinn, Orrock, Peace, Poindexter, Purkey, Putney, Ramadan, Ransone, Robinson, Rush, Scott, E.T., Sherwood, Spruill, Stolle, Tata, Torian, Tyler, Villanueva, Ward, Ware, O., Ware, R.L., Watson, Webert, Wilt, Wright, Yancey, Yost, Mr. Speaker–80.

NAYS–Brink, Carr, Englin, Filler-Corn, Herring, Hope, James, Lopez, McClellan, McQuinn, Morrissey, Plum, Rust, Scott, J.M., Sickles, Surovell, Toscano, Watts–18.

ABSTENTIONS–0.

NOT VOTING–BaCote, Pogge–2.