Metro. Dev. Comm'n of Marion County v. Pinnacle Media, LLC

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE ATTORNEY FOR AMICI CURIAE
Anthony W. Overholt Alan S. Townsend James W. Beatty
Maggie L. Smith George T. Patton, Jr. Indianapolis, Indiana
Indianapolis, Indiana Paul D. Vink
Indianapolis, Indiana Indiana Builders Association
Indiana School Boards Association
Simon Property Group, Inc.
C.P. Morgan Communities, L.P.
The Broadbent Company
Duke Realty Corporation
R. H. of Indiana, L.P.
Platinum Properties, LLC
J. Greg Allen and Associates, LLC
REI Real Estate Services, LLC
Buckingham Properties, Inc.
Cedar Run Limited, Inc.
Michael J. Andreoli
James F. Beatty
Lee T. Comer
James A. Federoff
Charles D. Frankenberger
Steven D. Hardin
Michael J. Kias
Jack W. Lawson
Stephen D. Mears
Ronald R. Pritzke
Thomas Michael Quinn
Joseph Bumbleburg
________________________________________________________________________

In the
Indiana Supreme Court
_________________________________

No. 49S05-0511-CV-510

METRO. DEV. COMM’N
OF MARION COUNTY, ET AL.,

Appellants (Defendants below),

v.

PINNACLE MEDIA, LLC,

Appellee (Plaintiff below).
 _________________________________

Appeal from the Marion Superior Court, No. 49D02-0201-PL-000078
The Honorable Kenneth H. Johnson, Judge
_________________________________

On Petition for Rehearing
_________________________________

May 3, 2006

Sullivan, Justice.

Pinnacle Media, LLC, has asked us to reconsider our opinion, Metro. Dev.
Comm’n of Marion County v. Pinnacle Media, LLC, 836 N.E.2d 422 (Ind. 2005), in
which we held that a change in the zoning ordinance of Marion County concerning bill-
board location permits was applicable to Pinnacle’s plan to erect 10 billboards in Indian-
apolis. We grant rehearing to address the issues raised by Pinnacle and also those raised
in an amici curiae brief.

We start by saying that both Pinnacle and amici read our opinion as constituting a
dramatic change in land use law. It does not.

This case had its genesis in Pinnacle’s plan to erect billboards in interstate high-
way rights-of-way in Marion County. Because those rights-of-way are owned by the
State, Pinnacle applied to the state highway department for permits. These applications
were filed on April 19, 2000. At the time the applications were filed, Marion County did
not require billboard location permits for billboards erected in interstate highway rights-
of-way, but it began formal consideration of an ordinance to that effect on April 26, 2000,
and enacted the ordinance on July 10, 2000. Eleven months later, on June 18, 2001, the
State approved Pinnacle’s applications for 10 billboards.

Pinnacle offered our decision in Knutson v. State ex rel. Seberger, 239 Ind. 656,
160 N.E.2d 200 (1959) (on reh’g), as authority for why the Marion County ordinance
should not be applied to its billboard project. In Knutson, we said that a zoning ordi-

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nance could not be enacted with retroactive effect depriving a property owner of the right
to a building permit in accordance with a zoning ordinance in effect at the time of the ap-
plication for the permit. Knutson, 239 Ind. at 667, 160 N.E.2d at 201 (citing State ex rel.
Fairmount Center Co. v. Arnold, 34 N.E.2d 777 (Ohio 1941)).

The key principle at stake in this case—the principal point debated in the parties’
briefs in the Court of Appeals—is that changes in zoning ordinances are subject to any
vested rights in the property. This principle is of constitutional dimension, as our original
opinion makes clear, and we reaffirm it here. As noted, Knutson said that a zoning ordi-
nance could not be enacted with retroactive effect depriving a property owner of the right
to a building permit in accordance with a zoning ordinance in effect at the time of the ap-
plication for the permit. Id. This is certainly so where a property owner has vested rights
in the property, but Knutson suggested something more, namely, that the mere filing of a
building permit was enough to create vested rights in the first place. We only overruled
Knutson’s “suggestion that having a building permit on file creates a vested right that
cannot be overcome by a change in zoning law.” Pinnacle Media, LLC, 836 N.E.2d at
428. The fundamental principle that changes in zoning ordinances are subject to any
vested rights in the property remains in full force and effect.

In the first two sections of its Petition for Rehearing, Pinnacle argues that our
original opinion’s treatment of Knutson was incorrect and should be reversed. We will
return to Knutson in a moment when we consider the amici brief. But our decision that
Pinnacle was required to comply with the Marion County ordinance stands on grounds
independent of our holding with respect to Knutson. “Regardless of Knutson’s viability,
we do not believe its rule is available to Pinnacle in this case.” Id.

Simply put, we held that the Marion County ordinance was in effect 11 months
before Pinnacle began construction, and so Pinnacle was subject to it. Id. at 429. While
recognizing that local zoning ordinances can require billboard location permits along
state highways, Br. of Appellee at 6 n.6, Pinnacle had argued that in this case its filing for
State permits immunized it from the City’s zoning change. We rejected that contention

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on a number of grounds in our original opinion, Pinnacle Media, LLC, 836 N.E.2d at
429, and Pinnacle does not challenge that reasoning on rehearing. Rather, it contends
that had it not been for “collusion” between the State and the City so that the City could
“ambush[]” Pinnacle with the new ordinance, the State would have issued its permits in
time for Pinnacle to have started construction of the signs—and thereby acquire vested
rights—before the change in the law. Pet. for Reh’g at 13. Absent any citation to any
evidence in the record supporting these “collusion” and “ambush” contentions, we are
unable to grant Pinnacle relief on this basis. 1

We now turn to the amici brief. It does not argue for Pinnacle’s billboards.
“Amici do not care whether the signs that Pinnacle has built stay or go.” Amici Curiae
Br. in Support of Appellee’s Pet. for Reh’g at 6. Rather, it makes two basic points. First,
it takes issue with our holding with respect to Knutson:

In short, the “mere filing” for a permit as characterized by
the Court is far from “mere.” It invokes the expenditure of
a tremendous amount of time, effort and money; however,
as amici read the opinion of the Court, the property owner
is not safe, even though he has spent a tremendous amount
of money, time and effort. He is at the whim of the legisla-
tive or administrative body until such time as he actually
starts construction.

Id. at 5 (citation omitted).

Respectfully, we believe the amici brief does not read our opinion correctly.
Again, our opinion held only that Knutson’s “suggestion that having a building permit on
file creates a vested right that cannot be overcome by a change in zoning law.” Pinnacle
Media, LLC, 836 N.E.2d at 428. The point is that the focus is on whether or not vested
rights exist, not whether some filing has been made with a government agency, a filing
that might be purely ministerial and represent no material expenditure of money, time, or

1
Recently Pinnacle submitted to us legislation enacted by the 2006 General Assembly, P.L. 49-
2006, that it asks we apply in this case. Contrary to Pinnacle’s contention, we see nothing in the
legislation evidencing intent on the part of the Legislature that it have retroactive effect.

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effort. We acknowledge, as perhaps our original opinion should have, that vested rights
may well accrue prior to the filing of certain applications. (We saw no evidence of
vested rights having accrued in the facts of this case and indeed it was Pinnacle’s position
that under Indiana law “mere application for a permit . . . grant[s] an applicant a vested
right to have its application construed in accordance with existing law.” Br. of Appellee
at 15.) It is beyond the scope of this opinion, and unfair to future litigants, to respond to
the hypothetical scenarios set forth in the amici brief, but we believe our original opinion
establishes a basic framework for such analysis in future cases that will protect vested
rights to the full extent the Constitution requires.

The second point made by the amici brief is that our decision allows “one gov-
ernmental agency, whether local, state or federal, . . . the authority to hold the developer
hostage until such time as a new ordinance or new regulation can be enacted by another
governmental agency which prohibits the development that the developer intends to con-
struct.” Amici Curiae Br. in Support of Appellee’s Pet. for Reh’g at 6. The amici brief
illustrates this concern with a lengthy narrative (2-1/2 pages of the 9-page brief) about
local opposition to a Wal-Mart store in Crown Point, Indiana. We make three brief
points in response. First, we do not believe that our original opinion stands for the propo-
sition that one governmental agency may hold a developer hostage for the benefit of an-
other. As noted above, Pinnacle made no such assertion that that is what happened in this
case until its petition for rehearing. Second, it is not clear to us which governmental
agency is holding the Crown Point Wal-Mart developer hostage for the benefit of an-
other. Third, although both amici and Pinnacle itself seem to contend that our original
opinion will make it more difficult to develop Wal-Marts (id. at 7-9; Pet. for Reh’g at 3-
4), we can only say that our opinion stands for the proposition that changes in zoning or-
dinances are subject to any vested rights. To the extent that a Wal-Mart developer—or
any other property owner—possesses vested rights in property, those rights will be pro-
tected, as the Constitution demands.

Shepard, C.J., and Dickson, Boehm, and Rucker, JJ., concur.

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