In Re Handy

Johnson, J.,

dissenting. Today, the majority strikes down as unconstitutional a legislative act that significantly affects public interest, even though none of the parties in either of the consolidated appeals has ever challenged the constitutionality of the statute at any point during the proceedings, including here on appeal. Thus, there is no lower court ruling on the constitutional question raised sua sponte by the majority. Nor is there any briefing on the issue. Nor was the Attorney General ever warned of any potential constitutional infirmity to the statute or given an opportunity to respond to any such *352perceived infirmity, as required by our rules. V.R.A.E 44 (party questioning constitutionality of legislative act in proceeding before Supreme Court in which state agency is not party must give immediate notice in writing to Court of existence of constitutional challenge, whereupon, clerk of Court “shall. . . certify such fact to the Attorney. General, who shall be permitted to intervene for argument on the question of constitutionality”); cf. Fed. R. App. P. 44 (same); 28 U.S.C. § 2403 (in federal court proceeding in which constitutionality of federal act or state statute is challenged, court shall certify that fact to Attorney General of United States if federal act is being challenged or to state Attorney General if state statute is being challenged, and shall allow United States or state to intervene with all rights of party).*

Notwithstanding the lack of argument concerning the validity of the statute, the majority strikes down § 4443(d) based on a doctrine that, even the majority concedes, has been applied inconsistently and has been described by the leading legal scholar on administrative law as “‘almost a complete failure.’” 171 Vt. at 346 n.5, 764 A.2d at 1236 n.5 (quoting K. Davis, A New Approach to Delegation, 36 U. Chi. L. Rev. 713, 713 (1969)). The majority justifies its decision to strike down § 4443(d) by stretching beyond the breaking point the maxim of appellate review that this Court “may affirm a correct judgment even though the grounds stated in support of it are erroneous.” Gochey v. Bombardier, Inc., 153 Vt. 607, 613, 572 A.2d 921, 925 (1990).

Yet the majority is not affirming the environmental court’s decisions in any sense. The environmental court did not even consider the constitutionality of § 4443(d), let alone strike it down. To the contrary, the court ruled in its two decisions that good-faith applications filed between public notice and a town’s adoption of a proposed zoning *353amendment are entitled to review under the old bylaws, but that applications filed between the adoption and effective date of the proposed amendment must be considered under the amended bylaws. Thus, in the Jolley case, as the majority’s mandate indicates, the environmental court’s decision is reversed. As for the Handy case, the environmental court remanded the matter to the zoning board of adjustment for conditional use or variance approval under the old bylaws, noting that later review might be necessary before the selectboard under § 4443(d) to determine if the applications were made in good faith. Of course, after today’s decision, no further review under § 4443(d) is possible.

The majority’s efforts to “affirm” the environmental court’s decisions, and thereby justify striking down § 4443(d) without the benefit of briefing, only compound its problems. With little discussion and — once again — without the benefit of briefing, the majority impliedly adopts a pending-amendment exception to Vermont’s minority vested rights rule, stating that “a developer may not have a vested right in an application filed while a proposed amendment is pending.” 171 Vt. at 350,764 A.2d at 1239 (emphasis added). Ironically, the effect of the majority’s holding is that, when permit applications are filed while zoning amendments are pending, municipalities will have the unbridled discretion to deny the applications based solely on the existence of the proposed amendments. Apart from citing out-of-state cases in which the highly variable exception has been applied, id., the majority provides no standards for determining which situations call for rejecting applications filed within the pendency period and grounded on claims of vested rights. This arguably creates the same potential for abuse claimed by the majority "with respect to § 4443(d). By striking § 4443(d) and then adopting the pending-amendment exception without establishing any guidelines for its application, the majority does, by judicial opinion, precisely the same thing that it claims the Legislature erred by doing in § 4443(d) — permitting standardless decision making. We have come full circle.

In short, today’s decision does not affirm the trial court’s judgment, but rather sets forth broad holdings — without the benefit of briefing and based on questionable legal theories — that were not contemplated by the environmental court and that are contrary to the legislative will. Because I concur with the majority’s interpretation of the meaning of § 4443(d), I would reverse both of the environmental court’s decisions and remand the matter to that court to review the selectboard’s § 4443(d) decisions under an abuse of discretion stan*354dard. If forced to confront the constitutional issue, I would invite the Attorney General to respond to our constitutional concerns. For these reasons, I respectfully dissent.

In the majority’s view, § 4443(d) unconstitutionally delegates discretionary authority to town selectboards without providing explicit standards upon which to base that discretion. 171 Vt. at 337, 764 A.2d at 1230. The majority further believes that the statute’s claimed constitutional infirmity deprived the permit applicants of prior notice as to what criteria were relevant to the Town of Shelburne’s decisions whether to allow review of their applications under the old or amended zoning law. Id. at 347-48, 764 A.2d at 1237-38. According to the majority, because members of the Shelburne selectboard believed that § 4443(d) compelled them to reject the instant applications, the applicants, particularly Handy, had no real opportunity to make their case as to why the old zoning law should be applied to their permit applications. Id.

Apart from the lack of briefing on the constitutionality of § 4443(d), I do not believe that the record supports the majority’s view of the facts. Both Jolley and Handy knew what factors would be relevant to the Town’s decision under § 4443(d). Further, they both had an opportunity to make the selectboard aware of the relevant equitable considerations, and in fact took advantage of that opportunity by raising those considerations in the hearings before the selectboard. Moreover, the selectboard declined to apply the old zoning law to the Jolley and Handy applications after explicitly addressing the equitable arguments raised by the applicants and acknowledging that § 4443(d) gave the Town the discretion to apply either the old or the amended zoning law.

In the Jolley case, various representatives appeared and testified on behalf of Jolley Associates at the March 11, 1997, hearing before the selectboard. Jolley’s attorney specifically reviewed the history of the permit applications from Jolley’s perspective. The attorney complained that, at a September 24, 1996, meeting, town officials discussed only the old zoning bylaw with Jolley’s representatives, even though the Shelburne Planning Commission had already conducted several work sessions on the new amendment. At the hearing, Jolley also pointed out that it had already expended over $20,000 under the purchase-and-sales agreement it had signed with the owner of the property upon which it hoped to operate its new business. Thus, Jolley was well aware that equitable considerations such as the timing of prior permit applications, the expectations of the parties, and the *355expenditures of the applicant in reliance on those expectations were the kind of factors that the selectboard would weigh in deciding which law to apply.

In its decision of March 25,1997, the selectboard acknowledged the testimony of Jolley’s attorney that Jolley had expended $20,000 under its purchase-and-sales contract and that the proposed zoning amendment had not been discussed at a September 1996 meeting between town officials and Jolley’s representatives. The selectboard expressly recognized that it “at all times retains discretion to approve an application” under § 4443(d). Nevertheless, the selectboard determined that “the equitable factors in this case do not weigh in favor of granting Jolley’s application.” The selectboard pointed out that (1) the Town properly warned the planning commission work sessions that were conducted on the proposed amendment before September 1996, but that Jolley did not directly participate in that process; (2) most of the money that Jolley had expended in preparing its application was refundable, putting it in no worse situation than if it had known of the proposed amendment before September 1996; (3) Jolley submitted its application only five days before the effective date of the amendment; and (4) allowing the proposed application would create a use not permitted under the new zoning law, in contravention of the strong presumption in Vermont law against the undue perpetuation of nonconforming uses.

Thus, Jolley had an opportunity to make its case. It was obvious to all concerned that equitable considerations, along with the nature of the proposed use and its status under the new zoning law, were the relevant factors that the selectboard would consider in determining whether to grant the application.

The same is true in the Handy case. The minutes of the February 10,1997, hearing reveal that both Paul Handy and his representative reviewed the history of their application for the proposed project. They pointed out that the application was first submitted in June 1996, and that it was denied in August 1996 for reasons unrelated to the gas station that was proposed. These facts were undisputed and have not been challenged by the Town. Handy’s representative conceded that his application did not comply with the new zoning law, but complained that he had been unaware of the changes that were proposed under the new amendment. In its decision of June 3,1997, the selectboard noted that Handy’s representative had reviewed the history of the original application and indicated that Handy had been unaware of the proposed amendment to eliminate gas station use in *356the residential-commercial district. The selectboard also recognized that it “at all times retains discretion to approve an application” under § 4443(d), but concluded that Handy’s application should be reviewed under the new zoning law because of the strong presumption in Vermont law against perpetuating nonconforming uses. Thus, notwithstanding the majority’s statements to the contrary, 171 Vt. at 347-48, 764 A.2d at 1237-38, Handy also had an opportunity to present his case before the selectboard.

Nevertheless, absent any. constitutional challenge from either Handy or Jolley, the majority declares § 4443(d) unconstitutional because it does not expressly set forth the specific factors to be considered by a selectboard in deciding whether applications filed during the moratorium period will be reviewed under the old or amended zoning law. The relevant factors are obvious in the context of this discrete, narrow statute. As the majority acknowledges, 171 Vt. at 342, 764 A.2d at 1233, § 4443(d) is aimed at creating a moratorium period with respect to the issuance of permits for proposed projects whose status will be affected by pending zoning amendments. In part, the goal of the statute is to assure that applicants do not take advantage of a proposed change in the zoning laws by filing an application, during the period between the notice and the effective date of the proposed amendment, that is inconsistent with the new laws. In doing so, the statute furthers this state’s policy of eliminating nonconforming uses. 24 V.S.A. §' 4408(b) (to achieve purposes of zoning and protect public interest, municipalities “may regulate and prohibit expansion and undue perpetration of nonconforming uses”); Hinsdale v. Village of Essex Junction, 153 Vt. 618, 626, 572 A.2d 925, 930 (1990) (“Nonconforming uses are inconsistent with the purpose of zoning and are tolerated only because they are antecedent to the applicable zoning provisions. A goal of zoning must be to phase out such uses.”).

On the other hand, because there may be situations in which it would be unfair to require an applicant to proceed under the proposed zoning law, § 4443(d) grants town selectboards some flexibility to allow applications to be reviewed under the old law during the moratorium period. Obviously, equitable considerations such as the history of the application, including the extent to which the applicant incurred expenses in reasonably relying on having the application considered under the old law, are relevant to a selectboard’s § 4443(d) decision. Another obvious consideration is the status of the proposed use under the old and new laws — for example, whether the proposed *357use is going from a permitted use to a conditional use or to a use that is being eliminated altogether, in which case the public policy in favor of eliminating nonconforming uses would become a major consideration. Not surprisingly, these are precisely the issues raised by Jolley and Handy and considered by the selectboard.

The law that the majority cites in support of its contention that § 4443(d) is unconstitutional deals with the duty of towns to set forth within their zoning laws reasonably specific standards that will control the discretion of administrative boards in granting or disallowing special exceptions to permitted uses. See generally 3 K. Young, Anderson’s American Law of Zoning § 21.09 (4th ed. 1996). By requiring standards, courts seek to assure that property owners are put on notice as to permitted uses, and that discretion as to whether to allow proposed uses is not exercised in an arbitrary or discriminatory fashion. In re Miserocchi, 170 Vt. 320, 325, 749 A.2d 607, 611 (2000); Town of Westford v. Kilburn, 131 Vt. 120, 124, 300 A.2d 523, 526 (1973); Young, supra, § 21.10, at 723-24 (even under most flexible standard, power of municipal legislative body to grant or withhold special permits must be exercised reasonably, and not “for reasons unrelated to the public health, safety, or welfare”).

Under this reasoning, “[sjtandards of the most general character have been held sufficient to guide the boards and provide understandable criteria for judicial review.” Young, supra, § 21.09, at 713. Indeed, “[t]here may be a trend toward more liberal construction of standards.” Id. at 716 (“Some courts have been sufficiently impressed with the need for broad delegation of permit-issuing authority to reach out and discover standards where arguably there were none.”); see Department of Transp. v. Armacost, 532 A.2d 1056, 1064 (Md. 1987) (reviewing United States Supreme Court case law on delegation doctrine and noting that doctrine has returned to dormant state).

I agree with Jolley, and the majority, that town selectboards do not have unfettered discretion under § 4443(d) to withhold consent for issuance of permits under zoning laws that are the subject of pending amendments. While municipal authorities have broad latitude in exercising discretionary powers granted to them, “the general rule is uniformly applied that powers granted in comprehensive terms must be reasonably exercised. It is the province of the court to protect the individual from unreasonable, oppressive, or arbitrary exercise of power within the limits of our constitutional and legal system.” 5 E. McQuillin, The Law of Municipal Corporations § 18.04, at 465 (3d ed. 1996).

*358Thus, there must be a reasonable basis for § 4443(d) decisions in light of the legislative policy behind the statute; decisions that are arbitrary, discriminatory, or based on favoritism cannot stand. Young, supra, § 21.10, at 720 (legislative body acting in administrative capacity “must follow the zoning regulations, and its actions are reviewable, and subject to judicial reversal if they are without support in the record or are otherwise arbitrary or unreasonable”). Regardless of whether there are written guidelines or criteria governing permit applications made within the § 4443(d) pendency period, a town’s decision not to consent to issuance of a permit under the old zoning laws must at minimum have some reasonable basis for the reviewing court to evaluate so as to eliminate decisions based on favoritism, discrimination, or uncontrolled discretion.

Because of its erroneous construction of § 4443(d), the environmental court did not consider the merits of the selectboard’s decisions. Consequently, for the most part, the parties do not address the question of whether the selectboard acted within its discretion in refusing to allow consideration of the applications under the old zoning law. Jolley, however, takes exception to the selectboard’s statement that the inconsistency of the instant applications with the amended bylaws, in and of itself, was sufficient under the facts of each of the cases to deny consent for issuance of permits under the old bylaws.

Without addressing the ultimate question of whether the selectboard acted within its discretion in requiring that the applications be considered under the amended bylaws, I see nothing inappropriate in- the selectboard’s statement. As noted, the selectboard explicitly recognized that it had the discretion to examine the equities of a particular case and grant its consent under § 4443(d), notwithstanding any inconsistency between the application and the amended bylaws. The selectboard merely concluded that the equities and circumstances of the Jolley and Handy cases did not warrant exercising its discretion to consent to the permits under the old bylaws. In making this determination, the selectboard considered that the applications sought approval for uses that were prohibited, even conditionally, under the new bylaws. In the selectboard’s view, the strong presumption against allowing nonconforming uses was determinative as to what law should be applied to the applications.

This Court has stressed that the Legislature’s delegation of power to an administrative agency may not be unrestrained or arbitrary, but rather must “provide a sufficient standard or policy to guide the *359Agency’s actions.” Rogers v. Watson, 156 Vt. 483, 493, 594 A.2d 409, 415 (1991) (emphasis added); accord In re Vermont Power Exch., 159 Vt. 168, 177, 617 A.2d 418, 423 (1992); Vincent v. Vermont State Retirement Bd., 148 Vt. 531, 535, 536 A.2d 925, 928 (1987); State v. Auclair, 110 Vt. 147, 163, 4 A.2d 107, 114 (1939). Here, the policy behind § 4443(d), a discrete and narrow statute aimed at hmiting consideration of permit applications during the pendency of proposed zoning laws, guides the discretion of selectboards in applying the statute. Cf. Vermont Power Exch., 159 Vt. at 177-78, 617 A.2d at 423 (no unlawful delegation of discretion to Public Service Board, where standards required purchase rates to be favorable to public interest, just and reasonable to consumers, and nondiscriminatory toward small power producers). In light of § 4443(d)’s clear policy of creating a moratorium period to prevent applicants from forcing towns to consider proposals before relevant, pending zoning amendments are finalized, there is little doubt as to what criteria are relevant in determining whether the proposals should be considered under the old or amended zoning laws. My review of the record leads me to believe that the legislative policy underlying § 4443(d) has been fulfilled without violating the rights of the applicants.

It is well settled that, absent exceptional circumstances, this Court will not consider constitutional arguments inadequately briefed or not previously raised. SBC Enterprises, Inc. v. City of South Burlington, 166 Vt. 79, 83 n.*, 689 A.2d 427, 429 n.* (1996) (declining to consider argument, raised for first time on appeal, that city ordinance was unconstitutional bill of attainder); Quesnel v. Quesnel, 150 Vt. 149, 150-51, 549 A.2d 644, 646 (1988) (refusing to address challenge to constitutionality of statute where argument was raised for first time on appeal and there was no showing of extraordinary circumstances suggesting that issue needed to be addressed), overruled on other grounds by Theise v. Theise, 164 Vt. 577, 674 A.2d 789 (1996). This rule applies with particular force here, where (1) no constitutional challenge was made either before the environmental court or this Court; (2) the majority’s sua sponte invalidation of § 4443(d) is based on a controversial application of the delegation doctrine; and (3) there is not the slightest indication that the selectboard’s decisions thwarted the policy underlying § 4443(d) or were grounded on favoritism or discriminatory animus.

The effect of today’s holding with respect to the instant cases will be to allow uses in the Town of Shelburne that are not permitted under the Town’s zoning laws. Moreover, the holding will prevent *360towns across the state from denying zoning permit applications filed by those seeking to avoid consideration under proposed amended zoning laws that would restrict or prohibit uses requested in the applications. Such disruption is unwarranted absent any challenge to § 4443(d). I would not strike the statute sua sponte. Rather, I would encourage towns to develop explicit standards within their zoning ordinances for applying § 4443(d), Young, supra, § 21.11, at 727 (“The selection of standards, within the limits of the requirement that such standards be adequate, is a function of the local legislative authority.”), and would address the constitutional issue in a later case, when it was properly raised and argued.

I am authorized to say that the Chief Justice joins in my dissent.

The majority cites one case — Tonya K. v. Board of Educ. of Chicago, 847 F.2d 1243 (7th Cir. 1988) — for the proposition that Rule 44 “is not jurisdictional so as to prevent the adjudication of a constitutional issue in the absence of official notice.” 171 Vt. at 343, 764 A.2d at 1234. In Tonya K., in response to a claim that the district court failed to notify the Illinois Attorney General that the constitutionality of a state statute had been drawn into question, the Seventh Circuit Court of Appeals noted that, although the correct procedure had not been followed, the Attorney General had been notified of the case three months before oral argument. The court stated: “The Executive Branch therefore has actual notice of the case and has had time to exercise its right to intervene.” Tonya K., 847 F.2d at 1247 (emphasis added). In marked contrast to the majority here, the Seventh Circuit concluded that “belated notice satisfies any requirement” because it provides an opportunity for the Attorney General to makes its views known and to take a direct appeal should a state statute be declared unconstitutional by a lower court. Id.