The Town of Royalton Planning Commission, a SRH Law client, recently prevailed at the Vermont Supreme Court in a long-contested state land-use matter concerning a proposal by developer Times and Seasons to construct a gift shop and restaurant on prime agricultural soils far from the Town’s commercial village center.

The Supreme Court’s unanimous July 8, 2011 opinion, authored by Justice Denise R. Johnson, was the result of Times and Seasons’ second appeal to the Court.  In re Times and Seasons, LLC Act 250 Reconsideration, 2011 VT 76.

The matter began in 2004, when Times and Seasons applied for an Act 250 permit to build and operate a gift shop and restaurant in the Town of Royalton.  Both the District Commission and the Vermont Environmental Board denied the initial permit application because the developer failed to satisfy several Act 250 criteria, including Criterion 8 (aesthetics) and Criterion 9(b) (prime agricultural soils).  Times and Seasons appealed the Environmental Board’s decision to the Vermont Supreme Court, and the Supreme Court affirmed denial of the permit on Criteria 8 and 9(B) in 2008.  In re Times and Seasons, LLC, 2008 VT 7.

While the first appeal was pending, Times and Seasons proceeded to construct a nearly identical building to that already denied by the Environmental Board, but now called the project a sugar house, which, as agricultural activity, was exempt from Act 250 jurisdiction.  The sugar house impacted the very prime agricultural soils at issue on appeal.

After the Supreme Court denied Times and Seasons’ initial permit application, the applicant sought reconsideration of its initial Act 250 application, seeking to convert its new sugar house (which had never actually been used as a sugar house), back into the commercial facility that was earlier denied.  Under Act 250, applicants have a narrow six-month window to correct the deficiencies that led to the permit denial and may apply for reconsideration of the denial by certifying that the original deficiencies in the application have been corrected. 10 V.S.A. § 6087(c).  Times and Seasons sought reconsideration in this case but did not actually correct the deficiencies in its original application.  In fact, its “sugar house” had already destroyed most of the prime agricultural soils the Supreme Court determined required protection in the first appeal.  Instead, it argued that it now complied with Criterion 9(B) because the statute had recently been amended in its favor and the soils were no longer prime agricultural soils.  The Vermont Environmental Court disagreed, finding that the Applicant could not take advantage of changes in law that occurred while its application was pending.  Times and Seasons again appealed to the Vermont Supreme Court, and the Supreme Court affirmed the Environmental Court’s decision.

At issue in the Supreme Court case was an interpretation of Vermont’s “vested rights” doctrine and, in particular, how that doctrine should be applied within the context of Act 250’s reconsideration provision.  Under the vested rights doctrine, permit applicants gain vested rights in the governing laws and regulations as they exist at the time of filing a complete permit application; subsequent statutory or regulatory amendments do not apply.  For example, in a typical application of the vested rights doctrine, unfavorable changes to a town plan cannot be used as a basis to deny a developer’s pending application if the changes occurred after the completed application was filed.  But the Vermont Supreme Court had not had the opportunity until this case to consider how the vested rights doctrine should be applied to a reconsideration application.

In its well-reasoned and logical decision, the Court accepted the Planning Commission’s arguments and held that a reconsideration application is a continuation of the original Act 250 permit application, not a new “vesting event.”  Thus, when laws or regulations have changed unfavorably after the time of initial application, the vested rights doctrine allows applicants to maintain the advantage of earlier favorable findings during reconsideration proceedings.  In re Times and Seasons, LLC Act 250 Reconsideration, 2011 VT 76 at ¶ 9-12.  But vesting is not a two-way street.  The Court held that applicants may not pick and choose which law they would like to apply when, for example, some changes in the law after the time of application are arguably favorable to the applicant.  As applied to Times and Seasons’ case, the Court concluded that the vested rights doctrine prevents an “applicant on reconsideration from availing itself of the definition amended during the course of litigation and relying solely on the change in law to correct the deficiencies causing the Act 250 permit denial.”  Id., ¶ 9.

“Contrary to applicant’s proposed interpretation,” the Court held, “an applicant on reconsideration may not simultaneously take advantage of the laws in effect at the time of the initial application and those in effect at the time of the reconsideration application – it is not a two-way street.”  Id., ¶ 11.

The Court also explained that its rejection of Times and Seasons’ arguments accorded with its reasoning for adopting the vested rights doctrine a few decades ago.  “Our adoption of the minority rule – vesting rights under existing regulations and laws as of the time when the proper application is filed – was not without careful thought and analysis. The considerations that drove our choice included practicality of administration, avoidance of extended litigation and maneuvering, and certainty in the law and its administration. Allowing an applicant to take advantage of favorable changes in the law on reconsideration would run counter to these principles.  And now, as then, we conclude that holding an applicant to the laws in effect at the time of initial application is the more equitable approach in the long run.”  Id., ¶ 13 citing Smith v. Winhall Planning Comm’n, 140 Vt. 178, 181-82 (1981).

This decision balances the rights of all parties to an Act 250 proceeding in an equitable fashion.  Applicants have always had a reasonable opportunity to tweak proposed projects to secure permits; now, other parties can be sure there will be a reasonable end to litigation.