Zimmerman v. Board of Wabaunsee County Comm'rs

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IN THE SUPREME COURT OF THE STATE OF KANSAS

No. 98,487

ROGER ZIMMERMAN, et al.,
Appellants/Cross-appellees,

and

A.B. HUDSON AND LARRY FRENCH,
Intervenors/Appellants/Cross-appellees,

v.

BOARD OF COUNTY COMMISSIONERS OF WABAUNSEE COUNTY, KANSAS,
Appellees/Cross-appellants.


SYLLABUS BY THE COURT

1.
Summary judgment is appropriate when there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law. The trial
court is required to resolve all facts and inferences which may reasonably be drawn from
the evidence in favor of the party against whom the ruling is sought.

2.
An appellate court reviews constitutional questions de novo.

3.
Whether there has been a compensable taking of private property for public use is
a question of law.

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4.
The Takings Clause of the Fifth Amendment to the United States Constitution,
which is applicable to the state through the Fourteenth Amendment, provides that private
property shall not be "taken for public use, without just compensation."

5.
The Takings Clause presupposes that the government has acted in pursuit of a
valid public purpose. The Clause expressly requires compensation where government
takes private property for public use. It does not bar the government from interfering with
property rights but rather requires compensation in the event of otherwise proper
interference amounting to a taking.

6.
Although reasonableness is the standard by which a court determines whether a
government's exercise of police power is valid, reasonableness is not the appropriate
standard to determine whether a government action affecting real property in private
hands constitutes a taking.

7.
In order to prevail on a takings claim, a party seeking compensation must first
establish that the property in question is one in which a vested property right exists, i.e., a
constitutionally cognizable property interest.

8.
A vested right is a right so fixed that it is not dependent on any future act,
contingency, or decision to make it more secure.

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9.
Conditional use permits are a device for permitting certain land uses considered to
be essential or desirable to the community to be placed in zoning districts in which they
would ordinarily be incompatible.

10.
An applicant has no vested rights in a conditional use permit when its issuance
depends upon the discretionary approval of a governmental authority.

11.
When a district court has granted a motion to dismiss for failure to state a claim,
an appellate court must accept the facts alleged by the plaintiff as true, along with any
inferences that can reasonably be drawn therefrom. The appellate court then decides
whether those facts and inferences state a claim based on plaintiff's theory or any other
possible theory. If so, the dismissal by the district court must be reversed.

12.
Alleged violations of the dormant Commerce Clause are subject to a two-step
inquiry. First, the court asks whether the challenged law discriminates on its face against
interstate commerce. Second, if the law is not facially discriminatory, the court then
engages in the balancing test as set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 90
S. Ct. 844, 25 L. Ed. 2d 174 (1970).

13.
A law impermissibly discriminates against interstate commerce if it treats in-state
and out-of-state economic interests differently by benefitting the former and burdening
the latter.

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14.
Under the facts of this case, a zoning amendment that regulated evenhandedly and
affected in-state and out-of-state economic interests equally was not facially
discriminatory.

15.
Under the balancing test contained in Pike v. Bruce Church, Inc., 397 U.S. 137, 90
S. Ct. 844, 25 L. Ed. 2d 174 (1970), a state law incidentally burdening interstate
commerce will be upheld unless the burden imposed on such commerce is clearly
excessive in relation to the putative local benefit.

16.
Congress may authorize the states to engage in activities that would otherwise be
forbidden by the Commerce Clause. However, Congress must provide its unambiguous
intent, expressed through unmistakably clear language, for a state statute to be outside the
reach of the dormant Commerce Clause.

Appeal from Wabaunsee District Court; TRACY D. KLINGINSMITH and MICHEAL A. IRELAND,
judges. Opinion filed October 21, 2011. Affirmed in part, reversed in part, and remanded with directions.

Charles C. Steincamp, of Depew Gillen Rathbun and McInteer, L.C., of Wichita, argued the
cause and was on the brief for appellants/cross-appellees Roger Zimmerman, et al.

Scott A. Grosskreutz, of Cavanaugh and Lemon, P.A., of Topeka, argued the cause and was on
the brief for the intervenors/appellants/cross-appellees A.B. Hudson and Larry French.

William L. Frost, of Morrison, Frost, Olsen, Irvine, Jackson and Schartz, L.L.P., of Manhattan,
argued the cause, and Katharine J. Jackson, of the same firm, was with him on the brief for
appellee/cross-appellant Board of Wabaunsee County Commissioners.

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Richard H. Seaton, of Seaton, Seaton and Gillespie, L.L.P., of Manhattan, was on the brief for
amici curiae Audubon of Kansas and the Kansas Wildlife Federation.

Michael D. Irvin and Charles Arthur, of Kansas Farm Bureau, of Manhattan, were on the brief for
amicus curiae Kansas Farm Bureau.

Neil R. Shortlidge, of Stinson Morrison Hecker, L.L.P., of Overland Park, Donald L. Moler, Jr.,
and Sandra L. Jacquot, of League of Kansas Municipalities, of Topeka, and Melissa Wangemann, of
Kansas Association of Counties, of Topeka, were on the brief for amici curiae League of Kansas
Municipalities and Kansas Association of Counties.

Alan Claus Anderson, of Husch Blackwell Sanders, L.L.P., of Kansas City, Missouri, and Derek
T. Teeter, of the same firm, were on the brief for amicus curiae NextEra Energy Resources, L.L.C.

Patrick B. Hughes, of Adams Jones Law Firm, P.A., of Wichita, and Michael J. Davis, of the
University of Kansas School of Law, of Lawrence, were on the brief for amicus curiae Protect the Flint
Hills, Inc.

Frank A. Caro, Jr. and Kevin J. Breer, of Polsinelli Shughart, P.C., of Overland Park, and
Timothy S. Bishop and J. Bishop Grewell, of Mayer Brown, L.L.P., of Chicago, Illinois, were on the brief
for amicus curiae The Wind Coalition.

The opinion of the court was delivered by

NUSS, J.: This case involves a decision by the Board of County Commissioners of
Wabaunsee County (Board) to amend its zoning regulations. Specifically, the Board
permitted Small Wind Energy Conversion Systems (SWECS) but prohibited the
placement of Commercial Wind Energy Conversion Systems (CWECS, i.e., commercial
wind farms) in the county. Plaintiffs are owners of land in the county. They were later
joined by plaintiff intervenors (Intervenors), who are not landowners but owners of
purported wind rights in the county.

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The district court granted the Board's various dispositive motions. Plaintiffs and
Intervenors appealed, and the Board cross-appealed. Pursuant to K.S.A. 20-3017, we
transferred the case from the Court of Appeals.

In Zimmerman v. Board of Wabaunsee County Comm'rs, 289 Kan. 926, 218 P.3d
400 (2009) (Zimmerman I), we affirmed the district court's decision on several issues. We
specifically held that the district court did not err (1) in determining that the Board's
decision to amend the zoning regulations was lawful; (2) in determining the Board's
decision to amend was reasonable; (3) in precluding Plaintiffs and Intervenors from
conducting further discovery on the issue of reasonableness; (4) in dismissing the claim
that the Board's decision violated the Contracts Clause of the United States Constitution;
(5) in dismissing the claims that the zoning regulation amendments were preempted by
state and federal law; and (6) in determining that Intervenors' action was commenced in a
timely manner.

Concurrent with the release of Zimmerman I, we ordered the parties to submit
supplemental briefs on certain questions raised in the issues originally presented on
appeal by both Plaintiffs and Intervenors. Those general issues, presently before us for
review after the parties' supplemental oral arguments, focus on whether the district court
erred in deciding as a matter of law that the Board did not violate the Takings Clause or
the Commerce Clause of the United States Constitution.

Our order requiring supplemental briefing on the Takings and Commerce Clauses
necessarily stayed our resolution of two issues originally presented on appeal by
Intervenors: whether the district court erred in dismissing their claims (1) under 42
U.S.C. § 1983 (2006) and (2) for inverse condemnation.

The first issue on appeal and our holding is as follows:

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1. Did the district court err by disposing of the Takings Clause claim as a
matter of law? No.

Because there was no taking, the district court did not err in also disposing of
Intervenors' related takings-based claim under 42 U.S.C. § 1983 and their claim for
inverse condemnation.

The second issue on appeal and our holding is as follows:

2. Did the district court err in dismissing the Commerce Clause claim as a
matter of law? We hold there was no discrimination against interstate
commerce. However, the claim alleging the Board's decision placed
incidental burdens on interstate commerce that outweighed the benefits is
remanded to the district court for analysis under Pike v. Bruce Church, Inc.,
397 U.S. 137, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970).

Because Intervenors also made a burden-based claim under the Commerce Clause
in their 42 U.S.C. § 1983 contention, that specific claim also is remanded.

Accordingly, we affirm in part, reverse in part, and remand for further
proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

Many of our facts come from Zimmerman I. Plaintiffs are owners of land in
Wabaunsee County who have entered into written contracts for the development of
commercial wind farms on their properties. Intervenors are not landowners but through
various contracts are owners of purported wind rights concerning other properties in the
county.
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Defendant is the three-member Board of County Commissioners of Wabaunsee
County. The county is roughly 30 miles long and 30 miles wide, containing
approximately 800 square miles and 7,000 people. It is located in the Flint Hills of
Kansas, which contain the vast majority of the remaining Tallgrass Prairie that once
covered much of the central United States.

On October 28, 2002, the county zoning administrator told the Board that he had
been contacted by a company desiring to build a wind farm in the county. At that time,
the county had no zoning regulations relating specifically to wind farms. However,
Article 2 of the county's zoning regulations captioned "Agricultural District Regulations,"
did generally provide:

"The purpose of this [Agricultural] District is to provide for a full range of agricultural
activities on land used for agricultural purposes, . . . and at the same time offer protection
to land used for agricultural purposes from the depreciating effect of objectional,
hazardous, incompatible and unsightly uses. The District is also intended to protect
watersheds and water supplies; to protect forest and scenic areas; to conserve fish and
wildlife habitat . . . ."

According to the Board, establishing wind farms first would have required the granting of
conditional use permits to allow for the height of the wind turbine structures, i.e.,
permission was not automatic but within the Board's discretion.

On November 12, 2002, the Board adopted a resolution placing a temporary
moratorium on the acceptance of applications for conditional use permits for wind farm
projects. The resolution provided, among other things, that during the moratorium the
zoning administrator was to undertake a comprehensive review of both the current zoning
regulations and wind farm projects, including the impact, if any, that such projects might
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have upon nearby properties. This moratorium, valid for 120 days upon publication, was
later extended on at least five occasions.

The following month, December 2002, the county planning commission
conducted its first public meeting to discuss amending zoning regulations regarding
commercial wind farms.

According to Plaintiffs' briefs, in April 2003 8 of the 12 Plaintiffs individually
entered into "Amended and Restated Wind Farm Easement Agreement[s]" with J.W.
Prairie Wind Power, L.L.C. for the purpose of providing for the development of CWECS
on their respective properties. These include Plaintiffs Roger and Angelina Zimmerman,
Harris and Virginia Zimmerman, Bill and Linda Unruh, and Robert and Janet Goss.

According to Plaintiffs' briefs, in June 2003 two more Plaintiffs, Kenneth and
Colleen Anderson, individually entered into the same agreement with J.W. Prairie Wind
Power for the purpose of providing for the development of CWECS on their property.

On July 24, 2003, the planning commission held a public hearing for discussion of
the proposed zoning regulations, which included regulations of small and commercial
wind farms. A month later, the Board ordered the planning commission to review and
recommend updates to the 1974 Wabaunsee County Comprehensive Plan (Plan) because
the Plan did not address changes that had occurred in the county in intervening years.
After the Plan had been reviewed, the Board intended to consider the new proposed
regulations regarding wind turbines.

On February 15, 2004, after input from the public, including a county-wide survey
and focus groups, the planning commission formally recommended the adoption of the
revised Comprehensive Plan 2004.

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Eight days later, on February 23, the Board again voted to extend the wind farm
moratorium, this time from March 31 to June 30, 2004, "to allow adequate time to
complete a full study of the issues involved with wind energy conversion systems." The
Board again directed—this time that prior to July 1—the county zoning administrator
"shall not accept nor process applications for conditional use permits for wind energy
conversion systems."

On March 1, 2004, the two Intervenors, A.B. Hudson and Larry French, were each
the named "second party" in two separate documents entitled, "Corporation General
Warranty Deed and Grant of Easement" signed by the first party, Workingman's Friend
Oil, Inc. Among other things, the documents state they entitle Intervenors to:

"[1] [t]he exclusive and complete rights, titles, interest, and privileges in all the wind and
air above and passing through the land, along with all related easements and
covenants . . . and all right, title, and interest to develop or grant wind rights, wind
easements, wind leases, . . . and [2] all rights to construct or cause to be constructed and
operate through third party contracts, wind farms with related improvements . . . ."

According to Plaintiffs' briefs, on March 10, 2004, the final two Plaintiffs, Glen
Eberle and Wilson Valley, L.L.C., entered into the same agreement as the other 10
Plaintiffs with J.W. Prairie Wind Power to develop CWECS on their respective
properties. None of these agreements between Plaintiffs and J.W. Prairie Wind Power are
in the record on appeal.

The next month, on April 26, 2004, the Board adopted the planning commission's
recommended changes to the Plan and adopted the Comprehensive Plan 2004. It included
the goals and objectives previously recommended to the Board. The Comprehensive Plan
2004 provides in relevant part that the county would endeavor to:

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A. Establish an organized pattern of land use with controlled and smart growth that
brings prosperity to the county while also respecting its rural character.
B. Maintain the rural character of the county with respect to its landscape, open spaces,
scenery, peace, tranquility, and solitude.
C. Develop moderate and slight growth of businesses, industries, and services with
small-scale employment.
D. Develop realistic plans to protect natural resources such as the agricultural land,
landscape, scenic views, and Flint Hills through regulatory policies.
E. Promote historic preservation, which protects and restores historic properties, old
limestone buildings, and landmarks in the county.
F. Attract small retail businesses and encourage clustering of retail and service
businesses.
G. Improve school system and other public utilities to address the existing deficiencies
and needs.
H. Develop tourism programs involving historic properties, nature of rural character, and
scenic landscape.
I. Provide affordable and good quality housing with respect to current deficiencies and
future needs.
J. Attract new population, a stronger labor force, and retain youth.

The next month, on May 20, 2004, after the Board's adoption of the
Comprehensive Plan, the planning commission held a public hearing to discuss proposed
amendments to the zoning regulations regarding small and commercial wind farms. At its
next meeting, the commission voted 8-2 to recommend that the Board approve the
proposed zoning amendments which would specifically allow CWECS as a conditional
use, subject to certain conditions.

According to the briefs of the two Intervenors, on June 19, 2004, they entered into
"Wind Option Agreements" with Zilkha Renewal Energy, LLC. These agreements are not
in the record on appeal, but Intervenors imply Zilkha is a developer that would use their
purported wind rights to produce commercial wind energy on the realty of Working Man
Oil, Co.
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On June 28, the Board voted 2-1 to adopt in part and override in part the planning
commission's recommended zoning changes. Specifically, the Board adopted the
commission's recommendations regarding regulation of Small Wind Energy Conversion
Systems (SWECS, i.e., small wind farms). It rejected, however, the commission's
recommendations regarding regulation of CWECS by absolutely prohibiting CWECS in
the county.

The Board's decision was formally reflected in Resolution No. 04-18, passed 2
weeks later on July 12, 2004. The Resolution articulated the following basis for the
Board's decision:

"The basis of the amendments to the Zoning Regulation is that Commercial Wind Energy
Conversion Systems would not be in the best interests of the general welfare of the
County as a whole. They do not conform to the intent and purpose of the Zoning
Regulations. In light of the historical, existing and anticipated land uses in the County,
they would adversely affect the County as a whole. They would be incompatible with the
rural, agricultural, and scenic character of the County. They would not conform to the
Wabaunsee County Comprehensive Plan, including the goals and objectives that were
identified by the citizens of the County and incorporated as part of the Plan. They would
be detrimental to property values and opportunities for agricultural and nature based
tourism. Each reason stands on its own. This motion is based upon what has been
presented at public hearings, public meetings, letters and documents that have been
produced, as well as experience and personal knowledge of the issues involved."

The Resolution also added the following definitions to Article 1-104 of the zoning
regulations adopted in 1995:

"207. Wind Energy Conversion System (WECS). The combination of mechanical and
structural elements used to produce electricity by converting the kinetic energy of wind to
electrical energy. Wind Energy Conversion systems consist of the turbine apparatus and
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any buildings, roads, interconnect facilities, measurement devices, transmission lines,
support structures and other related improvements necessary for the generation of electric
power from wind.

"208. Commercial Wind Energy Conversion System: A Wind Energy Conversion
System exceeding 100 kilowatt or exceeding 120 feet in height above grade, or more than
one Wind Energy Conversion System of any size proposed and/or constructed by the
same person or group of persons on the same or adjoining parcels or as a unified or single
generating system. (Commercial Wind Energy Conversion Systems are specifically
prohibited as a use in Wabaunsee County.) . . . .
. . . .
"210. Small Wind Energy Conversion System. A wind energy conversion system
consisting of wind turbine, a tower, and associated control or conversion electronics,
which has a rated capacity of not more than 100 kilowatt, which is less than 120 feet in
height and which is intended solely to reduce on-site consumption of purchased utility
power." (Emphasis added.)

A new paragraph (30) also was added to Article 31-105. It reiterated that CWECS
were prohibited in Wabaunsee County and certainly would not be permitted as a
conditional use:

"30. Commercial Wind Energy Conversion Systems are not a use that may be approved
or permitted as a Conditional Use in Wabaunsee County and are specifically prohibited."
(Emphasis added.)

Article 31-109 was also amended to include parameters for SWECS. These
restrictions included a minimum parcel size (no system shall be located on a parcel of
less than 20 contiguous acres); density (no more than one system shall be located on each
20 acres of parcel); spacing (no system may be located within 300 feet of another system
or a commercial wind energy conversion system); setback (a setback from the nearest
property line a distance equal to twice the height of the system, including the rotor blades
and a setback from the nearest public road right-of-way a distance equal to the height of
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the system, including the rotor blades, plus an additional 50 feet); blade height (the
lowest point of the rotor blades shall be at least 50 feet above ground level at the base of
the tower); and advertising restrictions (no advertising of any kind shall be located on the
system).

Article 31-112 (Prohibited Uses) was also amended to include a new paragraph (5)
concerning CWECS. It reiterated that such systems were prohibited in the county and any
application for their use would not be considered:

"5. No Commercial Wind Energy Conversion System, as defined in these Regulations,
shall be placed in Wabaunsee County. No application for such a use shall be considered."

Plaintiffs sued the Board in district court, seeking a judicial declaration that the
Board's action in passing Resolution No. 04-18 be null and void. Plaintiffs also sought
damages under a number of different theories.

Without filing an answer, the Board filed a motion to dismiss. In decisions dated
February 23 and July 22, 2005, the district court, Judge Klinginsmith, dismissed five of
Plaintiffs' claims. These were Count I (state preemption); Count II (failure to follow
proper procedures under K.S.A. 12-757[d] in adopting Resolution 04-18); Count IV
(violation of the Contract Clause of the United States Constitution); Count V (violation of
the Commerce Clause of the United States Constitution); and Count VI (federal
preemption). Judge Klinginsmith reserved judgment on the remaining Count III
(unconstitutional taking) and Count VII (42 U.S.C. § 1983) holding that their
consideration was premature until the court could determine the reasonableness under
K.S.A. 12-760 of the Board's adoption of the resolution amending the zoning regulations.
He ordered the Board to provide the record of the proceedings where it considered and
adopted the resolution.

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On August 7, 2005, after court approval, Intervenors filed their petition. Their
claims duplicated all of those brought by Plaintiffs, but Intervenors also brought a claim
for inverse condemnation. Despite this new petition, the district court refused to
reconsider its earlier rulings dismissing those Plaintiffs' claims now also brought by
Intervenors.

On October 12, 2006, Judge Ireland, as successor to the now-retired Judge
Klinginsmith, remanded the matter to the Board. Judge Ireland acknowledged the
findings of fact and conclusions the Board provided. He found, however, the Board had
not met its responsibility to produce evidence that it had acted reasonably. While
maintaining its position that it had sufficiently complied, on November 16, 2006, the
Board supplemented the record with additional findings of fact.

After finding the Board now had identified each fact it relied upon in making its
zoning decision, on February 28, 2007, Judge Ireland then dismissed Plaintiffs' and
Intervenors' three remaining claims based upon unreasonableness, taking, and 42 U.S.C.
§ 1983. He also dismissed Intervenors' claim of inverse condemnation.

After our decision in Zimmerman I, the following issues remain for our resolution:
the Takings Clause and the Commerce Clause of the United States Constitution, 42
U.S.C. § 1983, and inverse condemnation.

More facts will be added as necessary to the analysis below.

ANALYSIS

Issue I: The district court did not err by disposing of the Takings Clause claim as a
matter of law.

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Plaintiffs and Intervenors both contend the Board's decision to amend the zoning
regulations constituted a compensable taking under the Fifth Amendment to the United
States Constitution and that Judge Ireland erred in holding as a matter of law that no
taking occurred. Because Judge Ireland disposed of their claim partly based upon his
determination of the reasonableness of the Board's action—which itself considered
matters outside the pleadings—the takings disposition is characterized as summary
judgment. See K.S.A. 60-212(b)(6); Perry v. Board of Franklin County Comm'rs, 281
Kan. 801, Syl. ¶ 1, 132 P.3d 1279 (2006).

We ordered the parties in their supplemental briefing to thoroughly analyze the
particular nature of the rights allegedly taken—from landowners and from
nonlandowners alike. In their initial brief, Plaintiffs only allege a taking of their lease
rights with J.W. Prairie Wind Power, LLC, to develop CWECS on their realty. In their
supplemental brief, Plaintiffs also appear to allege a taking of a second interest: one "in
the wind resources that flow across their properties."

Unlike Plaintiffs, Intervenors are not realty owners. Based upon their documents
from Workingman's Friend Oil, Inc. ("deeds and grants of easements" which are in the
record) and those from Zilkha Renewal Energy, LLC (which are not in the record but are
denominated "wind option agreements"), they also appear to claim two interests were
taken. First, through Workingman they claim severed wind estates, including the right to
construct and operate commercial wind farms. Second, through Zilkha they claim
contractual interests to utilize the wind rights, i.e., in the commercial development of
wind power.

The Board responds that Plaintiffs' and Intervenors' claim for alleged loss of
"valuable contractual interests" fails because this court found no violation of the
Contracts Clause in Zimmerman I. 289 Kan. at 969. Additionally, the Board contends that
Intervenors only received an easement to use the land for a certain purpose—i.e., to set
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up commercial wind farms—and that there is no such thing as a severable wind estate for
takings analysis.

In finding no taking, the district court, Judge Ireland, appeared to rely upon two
grounds. First, he held that "[o]nce the district court [Judge Ireland] determined the
zoning action was reasonable there is no taking under Jack [v. City of Olathe, 245 Kan.
458, 781 P.2d 1069 (1989)] and McPherson Landfill [v. Board of Shawnee County
Comm'rs, 274 Kan. 303, 49 P.3d 522 (2002)]."

Second, Judge Ireland held that as in Jack and McPherson Landfill, the Board did
not abolish any existing rights, but only refused to expand existing rights:

"The County didn't take any existing rights away but only refused to expand the existing
rights including wind rights. The plaintiff[s] and plaintiff's interven[o]rs have given this
Court no cases which either distinguish or overrule Jack or McPherson Landfill. As such
the taking claim of both the plaintiff[s] and plaintiff interven[o]rs are dismissed."

Standard of Review

An appellate court has de novo review of constitutional questions. Steffes v. City of
Lawrence, 284 Kan. 380, Syl. ¶ 4, 160 P.3d 843 (2007). More particularly, whether there
has been a compensable taking is a question of law. Estate of Kirkpatrick v. City of
Olathe, 289 Kan. 554, 559, 215 P.3d 561 (2009) (citing Korytkowski v. City of Ottawa,
283 Kan. 122, 128, 152 P.3d 53 [2007]). As mentioned, Judge Ireland's disposition can
be considered a summary judgment and those standards also apply. See Warner v. Stover,
283 Kan. 453, Syl. ¶ 1, 153 P.3d 1245 (2007) (Summary judgment is appropriate when
there is no genuine issue as to any material fact and the moving party is entitled to
judgment as a matter of law. The court is required to resolve all facts and inferences
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which may reasonably be drawn from the evidence in favor of the party against whom the
ruling is sought.).

Discussion

We begin by acknowledging that the Takings Clause of the Fifth Amendment to
the United States Constitution, which is applicable to the states through the Fourteenth
Amendment, provides that private property shall not be "taken for public use, without just
compensation." Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528, 125 S. Ct. 2074, 161 L.
Ed. 2d 876 (2005); Estate of Kirkpatrick, 289 Kan. at 558. The Fifth Amendment's
guarantee "is designed to bar Government from forcing some people alone to bear public
burdens which, in all fairness and justice, should be borne by the public as a whole."
Armstrong v. United States, 364 U.S. 40, 49, 80 S. Ct. 1563, 4 L. Ed. 2d 1554 (1960).

As the Lingle Court acknowledged, beginning with Penna Coal Co. v. Mahon, 260
U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922), the Supreme Court has

"recognized that government regulation of private property may, in some instances, be so
onerous that its effect is tantamount to a direct appropriation or ouster—and that such
'regulatory takings' may be compensable under the Fifth Amendment. In Justice Holmes'
storied but cryptic formulation, 'while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking.' 260 U.S. at 415. The rub, of
course, has been—and remains—how to discern how far is 'too far.' In answering that
question, we must remain cognizant that 'government regulation—by definition—
involves the adjustment of rights for the public good' [citation omitted] and that
'Government hardly could go on if to some extent values incident to property could not
be diminished without paying for every such change in the general law,' Mahon, supra, at
413." Lingle, 544 U.S. at 537-38.

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The United States Supreme Court has further observed that the "question of what
constitutes a 'taking' for purposes of the Fifth Amendment has proved to be a problem of
considerable difficulty." Penn Central Transp. Co. v. New York City, 438 U.S. 104, 123,
98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978). As a result, the Supreme Court was "unable to
develop any 'set formula' for determining when 'justice and fairness' require that
economic injuries caused by public action can be compensated by the government, rather
than remain disproportionately concentrated on a few persons," with the result being "ad
hoc, factual inquiries." Frick v. City of Salina, 290 Kan. 869, 886, 235 P.3d 1211 (2010)
(citing Penn Central, 438 U.S. at 123-24).

a. Reasonableness

Plaintiffs first contend that Judge Ireland applied the wrong legal standard when,
in summarily granting judgment against them, he ruled that simply because the Board
action amending the zoning regulations was reasonable, then there was no taking. The
Board merely responds that "the law clearly is that there is no taking that occurs if the
zoning action is determined to be reasonable," citing Jack, 245 Kan. at 467, and
McPherson Landfill, 274 Kan. at 334. If the Board is correct, our takings inquiry ends.

We agree with Plaintiffs. McPherson Landfill implicitly rejects the Board's
position. There, this court addressed plaintiffs' arguments that Shawnee County's denial
of their application for a conditional use permit was unreasonable and that the denial of
their application constituted a taking. This court first held that the county's decision was
reasonable. If the Wabaunsee County Board's position were correct, then the McPherson
Landfill court would have simply rejected the takings argument because the permit denial
was reasonable. Instead, the court proceeded to analyze in detail, and eventually deny, the
takings claim.

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The McPherson Landfill court admittedly gave no specific justification for further
analyzing the takings issue. Its action is perhaps explained by the Court in Lingle 3 years
later. More specifically, reasonableness, e.g., arbitrariness, is an issue under the Due
Process Clause of the United States Constitution, while takings is a Takings Clause issue.
544 U.S. at 540. Accordingly, if the governing body action is unreasonable, there cannot
be a taking. The action is simply void. Only if the action is reasonable does a court
proceed to address the takings issue:

"The Takings Clause presupposes that the government has acted in pursuit of a valid
public purpose. The Clause expressly requires compensation where government takes
private property 'for public use.' It does not bar government from interfering with
property rights, but rather requires compensation 'in the event of otherwise proper
interference amounting to a taking.' [Citation omitted.] (Emphasis added.) Conversely, if
a government action is found to be impermissible—for instance because it fails to meet
the 'public use' requirement or is so arbitrary as to violate due process—that is the end of
the inquiry. No amount of compensation can authorize such action." (Emphasis added.)
Lingle, 544 U.S. at 543.

See also Korytkowski v. City of Ottawa, 283 Kan. 122, Syl. ¶ 5 ("Although
reasonableness is the standard by which we determine whether a government's exercise
of police power is valid, reasonableness is not the appropriate standard to determine
whether a government action affecting real property in private hands constitutes a
taking.").

b. Refusal to expand existing rights

We now turn to Plaintiffs' second contention. More specifically, they argue Judge
Ireland further erred in granting judgment against them on their takings claims by
declaring that the Board just "refused to expand the existing rights."

21

We begin our analysis by agreeing with the Board's assertion that there is no
vested right in the continuity of zoning in a particular area so as to preclude subsequent
amendment, i.e., no right to have the existing zoning ordinance continue unchanged.
Houston v. Board of City Commissioners, 218 Kan. 323, 543 P.2d 1010 (1975); Colonial
Investment Co., Inc. v. City of Leawood, 7 Kan. App. 2d 660, 646 P.2d 1149 (1982).
However, under the vested rights doctrine, if a vested property right existed before the
change in zoning, "the changed law cannot control without being subject to a successful
takings claim." Laitos, Law of Property Rights Protections: Limitations on
Governmental Powers, § 9.02[B][1] (2011 Supp.). See Delaney & Vaias, Recognizing
Vested Development Rights as Protected Property in Fifth Amendment Due Process and
Takings Claims, 49 Wash. U. J. Urb. & Contemp. L., 27, 31 (1996) ("Only after
landowners acquire vested rights under state law are they free to continue a project in the
face of subsequent changes to land use regulations that would otherwise preclude
continuing the project.").

Similarly, Kansas also recognizes the nonconforming use doctrine. Under this
doctrine, one can seek to continue—after a restricting change in zoning law—an already
established use. The party seeking to take advantage of its claimed right must prove that
the "nonconforming use commenced prior to the enactment of the ordinance restricting
such use." Crumbaker v. Hunt Midwest Mining, Inc., 275 Kan. 872, 881-82, 69 P.3d 601
(2003); see Goodwin v. City of Kansas City, 244 Kan. 28, 31-32, 766 P.2d 177 (1988). In
Crumbaker we held that "[t]he nonconforming use doctrine is codified at K.S.A. 12-
758 . . . : '. . . [R]egulations adopted under authority of this act [concerning planning and
zoning in cities and counties] shall not apply to the existing use of any land but shall
apply to any . . . change in the use of . . . land after the effective date of any regulations
adopted under this act.'" (Emphasis added.) 275 Kan. at 882.

Accordingly, to prevail on a takings claim, a party seeking compensation must
first establish that the property in question is one in which a vested interest exists, i.e., a
22

constitutionally cognizable property interest. Landgraf v. USI Film Products, 511 U.S.
244, 266, 114 S. Ct. 1483, 128 L. Ed. 2d 229 (1994) ("The Fifth Amendment's Takings
Clause prevents the Legislature [and other government actors] from depriving private
persons of vested property rights except for a 'public use' and upon payment of 'just
compensation.'"); Goodwin, 244 Kan. 28, Syl. ¶ 8 (where a party has no vested right in
the use of land, restriction on that use by a city does not constitute a taking of property).

This court has held that "[a] vested right is a right so fixed that it is not dependent
on any future act, contingency or decision to make it more secure." Vaughan v. Nadel,
228 Kan. 469, Syl. ¶ 3, 931 P.2d 664 (1980). Moreover,

"[r]ights are vested when the right to enjoyment, present or prospective, has become the
property of some particular person or persons as a present interest. [Citation omitted.]
[On the other hand, a] 'mere expectancy of future benefit, or a contingent interest in
property founded on anticipated continuance of existing laws, does not constitute a
vested right. [Citation omitted.]'" (Emphasis added.) KPERS v. Reimer & Koger Assocs.,
Inc., 261 Kan. 17, 41, 927 P.2d 466 (1996).

The Board and amicus curiae Protect the Flint Hills, Inc. (Protect) present a
multitude of arguments for why Plaintiffs and Intervenors have no vested property rights.
We need address only one, for it is dispositive. More particularly, the Board essentially
argues that whatever interests these parties purportedly possessed before the moratorium,
those interests were conditioned upon the Board's discretionary issuance of a conditional
use permit. Accordingly, interests such as developing, constructing, or operating CWECS
were not vested rights.

We begin our analysis of this argument by examining the nature of conditional use
permits (CUP's). According to one Kansas commentator, CUP's

23

"are a device for permitting certain land uses considered to be essential or desirable to
the community to be placed in zoning districts in which they would ordinarily be
incompatible. The permitted use, however, must be reasonable and conform to standards
or conditions designed to protect the interests of adjoining owners." (Emphasis added.)
Heim, Kansas Local Government Law, § 4.47, p. 4-12 (4th ed. 2009).

Accord 83 Am. Jur. 2d, Zoning and Planning § 755.

The Board's authority to issue CUP's is found at K.S.A. 12-755(a), which states
the governing bodies of Kansas cities and counties are authorized to adopt zoning
regulations that may include "provisions which . . . (5) provide for the issuance of special
use or conditional use permits."

As evidenced by the Board's November 2002 resolution establishing a moratorium
on accepting or processing applications for CUP's for wind energy conversion systems,
CUP's clearly were required for Plaintiffs and Intervenors to proceed. The Board's brief
declares that CUP's were necessary "in order to construct structures of the height they
were proposing. Issuance of a conditional use permit would not have been automatic."
The Intervenors' petition states they "anticipate constructing a generator or generators . . .
exceeding 125 feet in height, separately or in groups." According to the findings
proposed by the Board and adopted by the district court, the turbines themselves would
have been from 260' to 300' tall, with blades 125' in length.

We agree that an applicant has no vested rights in a CUP when its issuance
depends upon the discretionary approval of the Board. See, e.g., R-Goshen LLC v. Village
of Goshen, 289 F. Supp. 2d 441, 450-51 (S.D.N.Y. 2003) (main element in determining
the existence of a constitutionally cognizable property interest is the extent to which the
deciding authority may exercise discretion in reaching its decision).

24

The case of Kansas Racing Management, Inc. v. Kansas Racing Comm'n, 244
Kan. 343, 770 P.2d 423 (1989), provides guidance. There, this court addressed appellants'
argument that the Kansas Racing Commission's refusal to disclose KBI background
investigations violated their due process rights under the Kansas and United States
Constitutions. The court ruled that its analysis first required an examination of the nature
of an applicant's interest in the grant of a license under the Kansas Parimutuel Racing
Act, K.S.A. 74-8801 et seq. Appellants contended their license applications created a
protected property right in being awarded the licenses.

The Kansas Racing Management court first observed that to establish a property
interest in a particular benefit, appellant must have a "legitimate claim of entitlement to
it." 244 Kan. at 354 (citing Board of Regents v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 577,
33 L. Ed. 2d 548 [1972]). The court then held that appellants could not demonstrate an
entitlement or property interest in acquiring a license. It based its holding on the
operative statute which gave the racing commission broad discretion in granting or
denying the license, even if the applicant had complied with all statutory requirements.
The statute, K.S.A. 74-8813(e), provided in relevant part:

"'If an application is found to be in compliance [with the provisions of the Kansas
Parimutuel Racing Act] and the commission finds that the issuance of the license would
be within the best interests of horse and greyhound racing within this state . . . as
determined solely within the discretion of the commission, the commission may issue an
organization license to the applicant.'" (Emphasis added.) 244 Kan. at 355.

The court expressly rejected the appellants' comparison to Rydd v. State Board of Health,
202 Kan. 721, 451 P.2d 239 (1969), ruling that in Rydd the license sought for a day care
center "was within the category of licenses which the State must grant if the applicant
meets certain minimum requirements." (Emphasis added.) 244 Kan. at 355.

25

Similarly, in the instant case, at all material times, the zoning regulations granted
absolute discretion to the Board for issuing conditional use permits. Section 31-101 of the
1995 Zoning Regulations, as well as of the July 2004 Zoning Regulations, is clear and
unambiguous:

"Further, it is acknowledged that any property owner may seek a Conditional Use
[Permit] for any of the types of land uses indicated herein for any property within the
incorporated cities or the unincorporated portion of Wabaunsee County. The subsequent
approval of such request by the respective Governing Body is a purely discretionary act
that will be decided based upon the facts and circumstances discovered in the review of
each application. There is no implied 'right' for any person or landowner to obtain a
Conditional Use for any use on any property." (Emphasis added.)

Section 31-102 of the zoning regulations further provides that after the CUP
application is submitted to the planning commission and the commission's
recommendation is received by the Board,

"the governing body may, within the specifications herein provided, permit such
buildings, structures, or uses; provided that the public health, safety, morals, and general
welfare will not be adversely affected . . . and that necessary safeguards will be provided
for the protection of surrounding property, persons, and neighborhood values. In this
regard, the Governing Body may impose reasonable conditions on the approval of such
Conditional Use . . . ." (Emphasis added.)

We conclude under these circumstances and under the rationale and holding of
Kansas Racing Management, that the Board's issuance of a CUP to Plaintiffs and
Intervenors to develop, construct, or operate CWECS was indeed not "automatic." As a
result, whatever interest they may have possessed in the CUP could not be a vested
property right. Cf., McPherson Landfill, Inc. v. Board of Shawnee County Comm'rs, 274
Kan. 303, 334, 49 P.3d 522 (2002) (CUP application for establishing and operating
construction and demolition landfill on land zoned residential but previously allowed for
26

quarrying under an earlier CUP; court held denial of CUP application was not a taking
"but was a decision to deny the expansion of the existing right to use the property" for a
quarry in the residential zone, i.e., no vested right in operating landfill).

While Kansas Racing Management did not involve a discretionary denial of a
CUP, that case's rationale and holding clearly are applicable to the instant case, as
evidenced by Beasley v. Flathead County, 350 Mont. 177, 206 P.3d 915 (2009). There,
the Montana Supreme Court addressed plaintiff's claim that, inter alia, the county Board
of Adjustment had taken his interest in a CUP without just compensation by refusing to
transfer it. The Beasley court first observed that plaintiff's constitutional takings claim
required him to establish he possessed a constitutionally protected property interest. It
then determined whether a reasonable expectation of entitlement existed, noting that
"[a]ny significant discretion conferred upon a local agency . . . defeats a claim of
entitlement." 350 Mont. at 181.

The Beasley court observed that "[t]he Regulations vested discretion with the
Board to determine whether to grant a CUP. Any interest that Beasley may have
possessed in the CUP did not rise to the level of a protected property or liberty interest
under these circumstances." 350 Mont. at 181. The court concluded that plaintiff's
inability to establish that he possessed a protected property interest in obtaining the
transfer of the CUP precluded him from establishing his takings claims. Without any
further analysis deemed necessary, the court affirmed the trial court's granting of the
motion to dismiss plaintiff's constitutional claims.

The discretionary decision analysis has been used by courts in cases involving
other types of land use control as well. See R-Goshen LLC, 289 F. Supp. 2d at 450-51
(collecting cases); Crowley v. Courville, 76 F.3d 47 (2d Cir. 1996) (no constitutionally
cognizable property interest in parking variance for retail building because zoning
regulations vested zoning board with extremely broad discretion to grant or deny the
27

variance); Laitos, Law of Property Rights Protections: Limitations on Governmental
Powers, § 9.02[B][1], p. 9-13 (2011 Supp.) ("[I]f the developer has merely filed a
development plan or application for plat/subdivision approval, that act will not constitute
a vested right if the relevant government body still retains discretion to approve it.").

We find additional guidance in the recent case of Jordan-Arapahoe, LLP v. Board
of County Com'rs, 633 F.3d 1022 (10th Cir. 2011). There, a developer argued that the
county commissioners had deprived it of a vested property right when, after approval of
the developer's preliminary development plan, the commissioners changed the zoning and
denied the final development plan for building a car dealership. The Tenth Circuit Court
of Appeals pointed to the commissioners' discretion to deny the final plan as a basis for
rejecting the claim, stating:

"We have explained generally that a landowner's protected interest in a particular
zoning decision depends on 'whether there is discretion in the [local zoning authority] to
deny a zoning or other application. Norton v. Vill. of Corrales, 103 F.3d 928, 931-32
(10th Cir. 1996). . . . Accordingly, 'where the governing body retains discretion and the
outcome of the proceeding is not determined by the particular procedure at issue, no
property interest is implicated.' Crown Point I, LLC v. Intermountain Rural Elect. Ass'n,
319 F.3d 1211, 1217 (10th Cir. 2003). . . .

"Jordan-Arapahoe [developer] must show, therefore, that under Colorado law
Arapahoe County had limited discretion to change the zoning and to disapprove Jordan-
Arapahoe's final development plan. Like the district court, we conclude Jordan-Arapahoe
failed to make this showing and thus has not demonstrated a vested property interest. . . ."
633 F.3d at 1026.

Because at all material times the Board's zoning regulations did not just provide
that issuance of a CUP was purely discretionary but additionally the July 2004 regulation
changes completely eliminated the possibility of a CUP issuance for CWECS in
28

particular, we conclude no vested property right of any type has been taken from
Plaintiffs or Intervenors by the Board.

We recognize none of the cases we cite involved a moratorium on accepting or
processing CUP applications as in the instant case. And only Jordan-Arapahoe, LLP
involved any type of moratorium: a 4-week moratorium on all applications of
development proposals which was extended 7 months, during which time the commission
altered its zoning to make building a car dealership impossible. The Jordan-Arapahoe,
LLP court did not address the moratorium factor, however, in its opinion. Nevertheless,
we hold the presence of a moratorium here does not modify our rationale or holding for a
number of reasons, several of which suffice.

First, the existence of a moratorium on accepting or processing applications for
CUP's in which no vested property right ever existed can hardly support a takings
argument.

Second, as the Board suggests, its moratorium on permits while a zoning
amendment was pending with the planning commission, and ultimately the Board, is
hardly a revolutionary concept. This court recognized the efficacy of moratorium
ordinances, i.e., "interim development controls," in Frick v. City of Salina, 290 Kan. 869,
235 P.3d 1211 (2010). There, for almost 3 years, the city prohibited the construction of
driveways, culverts, or other improvement within the right of way of its project and on a
city street. We acknowledged that "comparable moratoria are widely used among land-
use planners to preserve the status quo while formulating more permanent development
strategies." 290 Kan. at 890. We eventually denied the plaintiffs' claims of a 3-year
temporary taking under Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional
Planning Agency, 535 U.S. 302, 122 S. Ct. 1465, 152 L. Ed. 2d 517 (2002).

29

Accordingly, we agree with the sentiments of one well-known commentator who
has stated:

"The adoption of moratoria while studies are being made and public meetings or
hearings are being held on the formulation or reformulation of the municipality's
comprehensive plan has become general practice. . . . The purposes of the study might be
completely frustrated if, while the study was being conducted and suggestions for change
were being discussed, landowners could secure permits to build structures that might be
nonconforming in height or bulk, or that might be intended for uses which would be
forbidden in locations to which the permits related. The new plan, when adopted, might
be defeated by uses and structures constructed during the period of study or for which the
owners secured vested rights because of the issuance of permits therefor. Consequently, it
is common practice to impose a moratorium on the issuance of: . . . (2) permits for
particular types of structures or uses." (Emphasis added.) Ziegler, Rathkopf's The Law of
Zoning and Planning, Section 69:15, pp. 69-39 to 69-40 (2007).

See Ziegler, §§ 13:3; 13:8; 13.13. Cf. Ecogen, LLC v. Town of Italy, 438 F. Supp. 2d 149
(W.D.N.Y. 2006) (moratorium on permits for, or actual construction of, wind turbine
powers and facilities in town "for a reasonable time pending the completion of a plan for
control of construction of such structures in [town] as part of adoption of comprehensive
zoning regulations"; original duration was for 6 months but eventually extended to 2
years; court denied business' request for preliminary injunction).

Because we have held there was no property for purposes of a takings claim, it is
unnecessary to proceed with a full takings analysis, e.g., per se (Lingle v. Chevron U.S.A.
Inc., 544 U.S. 528, 538, 125 S. Ct. 2074, 161 L. Ed. 2d 876 [2005] [citing Lucas v. South
Carolina Coastal Council, 505 U.S. 1003, 1019, 112 S. Ct. 2886, 120 L. Ed. 2d 798
(1992)]) or de facto (Penn Central Transp. Co. v. New York City, 438 U.S. 104, 98 S. Ct.
2646, 124, 57 L. Ed. 2d 631 [1978]; see Vanek v. State, Board of Fisheries, 193 P.3d 283,
294 (Alaska 2008).

30

c. Inverse condemnation and takings claim under 42 U.S.C. § 1983

Given our ruling there was no violation of the Takings Clause because no vested
property right had been taken, it logically follows that there was no inverse condemnation
and no violation of 42 U.S.C. § 1983 because both causes of action require loss of
property or right. See Estate of Kirkpatrick v. City of Olathe, 289 Kan. 554, Syl. ¶ 1, 215
P.3d 561 (2009) (To succeed on a claim for inverse condemnation, a party must establish
that a taking has occurred.); McPherson Landfill, Inc., 274 Kan. at 334 (one seeking
relief under § 1983 must establish deprivation of a federal right).

Accordingly, Judge Ireland did not err in dismissing the takings-based § 1983
claim on this ground: He held that because there was no deprivation of an existing
federal right, i.e., no taking, the claim failed. While he disposed of the inverse
condemnation claim as a matter of law for the erroneous reason that the Board merely
acted reasonably in passing the Resolution barring CWECS, a district court's decision
may be upheld even though it relied on the wrong ground. See Frick, 290 Kan. at 904-05.

Issue 2: The issue of whether the Board's decision to amend the zoning regulations
violates the Commerce Clause is remanded to the district court.

We ordered the parties in their supplemental briefing to thoroughly address all
steps in the analysis of whether the Board's decision to amend its zoning regulations
violated the "dormant" aspect of the Commerce Clause of the United States Constitution:
(1) discrimination against interstate commerce and (2) burden on interstate commerce.
We also ordered them to thoroughly address why, or why not, future discovery was
necessary to resolve the Board's alleged violation of the Commerce Clause.

Plaintiffs and Intervenors both contend the district court erred in dismissing their
claim that the Board's decision to amend the zoning regulations violates the dormant
31

Commerce Clause. Specifically, Plaintiffs claim the Resolution formally reflecting the
Board's decision to amend facially discriminates against interstate commerce because it
permits wind generation for personal use (i.e., SWECS) but prohibits wind generation for
commercial use (i.e., CWECS). Intervenors agree, adding that even if the ordinance is not
facially discriminatory, it excessively burdens interstate commerce in relation to the local
benefit.

In finding no dormant Commerce Clause violation, the district court, Judge
Klinginsmith, explained:

"The Commerce Clause precludes local legislation that benefits in-state commerce while
unfairly burdening out-of-state competitors. Resolution 04-18 makes no distinction
between providers whose energy is transported across state lines and those whose energy
remains within the boundaries of the county or the State of Kansas. It does not therefore
violate the Commerce Clause of the United States Constitution."

Standard of review

When a district court has granted a motion to dismiss for failure to state a claim,
an appellate court must accept the facts alleged by the plaintiff as true, along with any
inferences that can reasonably be drawn therefrom. The appellate court then decides
whether those facts and inferences state a claim based on plaintiff's theory or any other
possible theory. If so, the dismissal by the district court must be reversed. Rector v.
Tatham, 287 Kan. 230, 232, 196 P.3d 364 (2008).

Discussion

We begin by acknowledging that the Commerce Clause of the United States
Constitution empowers Congress to "regulate Commerce . . . among the several states."
Within this express grant to Congress, the United States Supreme Court recognizes a
32

negative command, called the dormant Commerce Clause. American Trucking Assns.,
Inc. v. Michigan Pub. Serv. Comm'n, 545 U.S. 429, 433, 125 S. Ct. 2419, 162 L. Ed. 2d
407 (2005) (citing Oklahoma Tax Comm'n v. Jefferson Lines, Inc., 514 U.S. 175, 179,
115 S. Ct. 1331, 131 L. Ed. 2d 261 [1995]).

The dormant Commerce Clause is intended to protect the free flow of commerce
and to safeguard Congress' latent power from encroachment by the states. Merrion v.
Jicarilla Apache Tribe, 455 U.S. 130, 154, 102 S. Ct. 894, 71 L. Ed. 2d 21 (1982). The
dormant Commerce Clause effectuates the framers' purpose of preventing "'a State from
retreating into [the] economic isolation,' [citations omitted] 'that had plagued relations
among the Colonies and later among the States under the Articles of Confederation.'"
Department of Revenue of Ky. v. Davis, 553 U.S. 328, 338, 128 S. Ct. 1801, 170 L. Ed.
2d 685 (2008) (citing Hughes v. Oklahoma, 441 U.S. 322, 325-26, 99 S. Ct. 1727, 60 L.
Ed. 2d 250 [1979]). In essence, the dormant Commerce Clause prohibits "regulatory
measures designed to benefit in-state economic interests by burdening out-of-state
competitors." New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 273-74, 108 S. Ct.
1803, 100 L. Ed. 2d 302 (1988).

State regulations affecting interstate commerce are not immune from Commerce
Clause scrutiny because they attach only to a local or intrastate activity. Commonwealth
Edison Co. v. Montana, 453 U.S. 609, 615, 101 S. Ct. 2946, 69 L. Ed. 2d 884 (1981).
Instead, alleged violations of the dormant Commerce Clause are subject to a two-step
inquiry. Davis, 553 U.S. 338-39; United Haulers Assn., Inc. v. Oneida-Herkimer Solid
Waste Management Authority, 550 U.S. 330, 338, 346, 127 S. Ct. 1786, 167 L. Ed. 2d
655 (2007).

First, a court asks whether the challenged law discriminates on its face against
interstate commerce. "In this context, '"discrimination" simply means differential
treatment of in-state and out-of-state economic interests that benefits the former and
33

burdens the latter.' [Citations omitted.]" United Haulers, 550 U.S. at 338-39. "A
discriminatory law is 'virtually per se invalid,' [citation omitted] and will survive only if it
'advances a legitimate local purpose that cannot be adequately served by reasonable
nondiscriminatory alternatives.' [Citations omitted.]" Davis, 553 U.S. at 338-39.

Second, if the law is not facially discriminatory, the court then engages in a
balancing test as set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S. Ct. 844, 25
L. Ed. 2d 174 (1970). See United Haulers, 550 U.S. at 345-46 (recognizing the second
step as Pike analysis); Davis, 553 U.S. at 338-39 (same). In other words, a state law only
incidentally affecting interstate commerce will be upheld "'unless the burden imposed on
such commerce is clearly excessive in relation to the putative local benefits.'" United
Haulers, 550 U.S. at 346 (citing Pike, 397 U.S. at 142).

a. Facial discrimination

In finding no violation of the dormant Commerce Clause, Judge Klinginsmith
appeared to analyze whether the Board's zoning amendments facially discriminated
against interstate commerce: step 1. The Board argues neither Plaintiffs nor Intervenors
make a discrimination claim. We need not address this Board argument because we agree
with the judge's conclusion that no facial discrimination exists.

More specifically, we cannot discern any "'differential treatment of in-state and
out-of-state economic interests that benefits the former and burdens the latter.' [Citations
omitted.]" United Haulers, 550 U.S. at 338-39. The amended zoning regulations prohibit
all commercial wind energy conversion systems in the county, regardless of whether the
producer wishes to sell the wind-generated electricity in other states, in other Kansas
counties, or within Wabaunsee County itself, e.g., to the producer's next door neighbor.
See Blue Circle Cement v. Board of County Com'rs, 27 F.3d 1499, 1512 (10th Cir. 1994)
(a county zoning ordinance that banned all industrial waste recycling, disposal, or
34

treatment was not discriminatory because it "confer[ed] no advantages on in-state entities
seeking to store, treat, recycle, or dispose of [waste] as against out-of-state firms"). As
the amended regulations themselves make clear, qualifying as an allowable "small wind
energy conversion system" requires the wind-generated electricity to be "intended solely
to reduce on-site consumption of purchased utility power." Article 1-104, § 210.

b. Pike analysis

Absent this discrimination, the zoning amendments "'will be upheld unless the
burden imposed on [interstate] commerce is clearly excessive in relation to the putative
local benefits.'" Davis, 553 U.S. at 338-39 (citing Pike, 397 U.S. at 142). It does not
appear that Judge Klinginsmith engaged in this next analytical step, i.e., the Pike
balancing test, "which is reserved for laws 'directed to legitimate local concerns, with
effects upon interstate commerce that are only incidental.'" United Haulers, 550 U.S. at
346. The Pike court described its test as follows:

"Although the criteria for determining the validity of state statutes affecting
interstate commerce have been variously stated, the general rule that emerges can be
phrased as follows: Where the statute regulates even-handedly to effectuate a legitimate
local public interest, and its effects on interstate commerce are only incidental, it will be
upheld unless the burden imposed on such commerce is clearly excessive in relation to
the putative local benefits. Huron Portland Cement Co. v. Detroit, 362 U.S. 440, 443. If a
legitimate local purpose is found, then the question becomes one of degree. And the
extent of the burden that will be tolerated will of course depend on the nature of the local
interest involved, and on whether it could be promoted as well with a lesser impact on
interstate activities." 397 U.S. at 141-42.

A number of federal circuit courts of appeal have distilled the Pike test as follows:
The court considers (1) the nature of the putative local benefits advanced by the statute;
(2) the burden placed on interstate commerce by the statute; and (3) whether the burden is
35

"clearly excessive" when weighed against these local putative benefits. See
Pharmaceutical Care Management. Ass'n. v. Rowe, 429 F.3d 294, 312 (1st Cir. 2005);
Grand River Enterprises Six Nations, Ltd. v. Pryor, 425 F.3d 158, 169 (2d Cir. 2005);
Star Scientific Inc. v. Beales, 278 F.3d 339, 357 (4th Cir. 2002). The Tenth Circuit
apparently also retains Pike's reference to "whether the local interests can be promoted as
well with a lesser impact on interstate commerce." Blue Circle Cement, 27 F.3d at 1512.
In Zimmerman I, we essentially held that the zoning regulation amendments were
directed to legitimate local public concerns, e.g., aesthetics. Accordingly, our remaining
analysis focuses on weighing the burdens placed on interstate commerce by the Board's
decision against the local putative benefits.

For additional guidance, we first turn to United Haulers, 550 U.S. 330. There, a
trade association of solid waste management companies and six haulers that operated in
two New York counties sued the counties under 42 U.S.C. § 1983 on the basis that the
counties' flow control laws violated the Commerce Clause. The laws allegedly not only
discriminated against interstate commerce but also placed an incidental burden on
interstate commerce that outweighed the ordinances' benefits.

After finding no discrimination, the Court determined that the counties' ordinances
were properly analyzed under Pike. It first noted:

"After years of discovery, both the Magistrate Judge and the District Court could
not detect any disparate impact on out-of-state as opposed to in-state businesses. The
Second Circuit alluded to, but did not endorse, a 'rather abstract harm' that may exist
because 'the Counties' flow control ordinances have removed the waste generated in
Oneida and Herkimer Counties from the national marketplace for waste processing
services.'" 550 U.S. at 346 (citing 438 F.3d at 160).

The Court then stated:

36

"We find it unnecessary to [proceed to] decide whether the ordinances [actually] impose
any incidental burden on interstate commerce because any arguable burden [as expressed
by the lower courts] does not exceed the public benefits of the ordinances." (Emphasis
added.) 550 U.S. at 346.

The Court then explained its rationale, concluding: "For these reasons, any
arguable burden the ordinances impose on interstate commerce does not exceed their
public benefits." 550 U.S. at 347.

The Court's particular handling of the Pike analysis, by a 4-justice plurality in Part
II.D of the opinion, could support the argument of the Board and amicus curiae Protect
that no discovery is needed in the instant case on the Commerce Clause issue. In other
words, there simply is no "arguable burden" to exceed the public benefits, and this court
could decide the issue as a matter of law.

In rejecting this argument, we first observe that unlike the instant case, the Pike
analysis was performed in United Haulers at all three court levels "after years of
discovery." 550 U.S. at 337, 346. We next observe that instructive caselaw disagrees with
the Board and Protect. In Lebanon Farms Disposal, Inc. v. County of Lebanon, 538 F.3d
241 (3d Cir. 2008), the parties agreed that United Haulers, which was released while the
case was on appeal, controlled the outcome of the appeal. However, they disagreed about
the appropriate disposition. The County and the Greater Lebanon Refuse Authority
argued that their ordinances passed the Pike balancing test because they were
indistinguishable from the ordinances considered in United Haulers. On the other hand,
the disposal company argued that applying the Pike balancing test, instead of the strict
scrutiny standard required after finding discrimination, yielded the same result as the
district court's erroneously applied strict scrutiny review: the ordinances still violated the
dormant Commerce Clause.

37

The Third Circuit vacated the district court's grant of partial summary judgment
and the resulting permanent injunction and remanded, ordering the court to make
necessary findings of fact and conclusions of law and to perform the Pike balancing test.

"Considering the strong language of the Supreme Court's holding in United
Haulers, which found 'it unnecessary to decide whether the ordinances impose any
incidental burden on interstate commerce because any arguable burden does not exceed
the public benefits of the ordinances,' 550 U.S. at 346, we perhaps could conduct the
balancing test on the record as it exists and even conclude that any incidental burden on
interstate commerce does or does not exceed the public benefits of the presently
considered ordinances. We will not do so, however. We find the Second Circuit's opinion
in United Haulers Ass'n v. Oneida-Herkimer Solid Waste Management, 261 F.3d 245 (2d
Cir.2001), to be particularly instructive. The Second Circuit correctly predicted the
Supreme Court's eventual holding that '[f]low control regulations like the Oneida-
Herkimer ordinances, which negatively impact all private businesses alike, regardless of
whether in-state or out-of-state, in favor of a publicly owned facility, are not
discriminatory under the dormant Commerce Clause.' Id. at 263. It then 'admit[ted] a
temptation to undertake the Pike balancing test in the first instance, . . . [a] temptation[,
which] . . . arises from the well-settled principle that waste disposal is a traditional local
government function.' Id. at 263-64. The court nonetheless decided to 'resist the
temptation to rule as a matter of law prior to adequate discovery and further argument
by the parties, which will undoubtedly assist the District Court in this fact-intensive
determination.' Id. at 263-64. It concluded:

'We . . . hold . . . that although it does not, in and of itself, give a
municipality free reign to place burdens on the free flow of commerce
between the states, the fact that a municipality is acting within its
traditional purview must factor into the District Court's determination of
whether the local interests are substantially outweighed by the burdens
on interstate commerce. With that understanding, we reverse and remand
for a determination of whether the Counties' flow control laws pass
constitutional muster under the Pike balancing test.'
38


Id. at 264. Only after the district court conducted the Pike balancing test and the Second
Circuit affirmed did the Supreme Court's plurality in Part II.D affirm the application of
the test. See United Haulers, 127 S. Ct. at 1797-98." (Emphasis added.) Lebanon Farms
Disposal, Inc., 538 F.3d at 251-52.

The Third Circuit concluded in Lebanon Farms Disposal, Inc., that remand was
appropriate:

"We will follow the approach of the Second Circuit. We will remand to the
District Court to conduct the Pike balancing test and make findings of fact and
conclusions of law for the record. In its present form, the record is incomplete regarding
the burden on interstate commerce and, more importantly, the putative local benefits.
Because the District Court did not have the benefit of the Supreme Court's decision in
United Haulers and because we do not have the benefit of the District Court's findings of
fact and conclusions of law under the now relevant standard, we will remand with
instructions to apply the Pike balancing test in accordance with Part II.D of United
Haulers. After development of a proper factual record, this court will be in a better
position to review the District Court's factual and legal conclusions, if asked."
(Emphasis added.) 538 F.3d at 252.

We find further guidance in Selevan v. New York Thruway Authority, 584 F.3d 82
(2d Cir. 2009). There, similar to the instant case, the district court granted the defendant's
motion to dismiss plaintiffs' Commerce Clause claim because it failed to allege that the
defendant's policy discriminates against interstate commerce. And identical to the instant
case:

"[T]he District Court incorrectly failed to further inquire if the policy otherwise violated
the Commerce Clause. Specifically, the District Court did not acknowledge the well-
established rule that, under the so-called Pike test, a nondiscriminatory regulation that
'regulates even-handedly to effectuate a legitimate local public interest,' Pike v. Bruce
Church. Inc., 397 U.S. 137 (1970), is nevertheless unconstitutional if 'the burden imposed
on interstate commerce is clearly excessive in relation to the putative local benefits.'
39

United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Autho., 550 U.S. 330,
346 (quoting Pike, 397 U.S. at 142)." Selevan, 584 F.3d at 95.

The Second Circuit held that the plaintiffs' allegations were sufficient to state a
claim under the Commerce Clause and the district court erred in dismissing. Instead of
attempting to perform further analysis, e.g., under Pike, the Second Circuit reversed and
remanded, directing that the district court perform the analysis to determine whether the
dormant Commerce Clause had been violated by the policy.

See also Association of Intern. Auto. Mfrs., Inc. v. Abrams, 84 F.3d 602, 612-13
(2d Cir. 1996) (summary judgment on Commerce Clause claim concerning preemption
inappropriate; "[s]ince there are genuine factual issues as to both the claimed burdens and
the putative benefits created by the New York bumper statute, we remand for further
development of the record in order to permit the district court to apply the Pike v. Bruce
Church balancing test"); Blue Circle Cement, Inc., 27 F.3d at 1512 (district court
erroneously failed to conduct the Pike analysis after plaintiff had presented evidence
creating material fact issues as to the Commerce Clause implications of the county
ordinance and suggested it possessed other evidence of same; summary judgment
reversed and remanded).

As mentioned, we ordered the parties to thoroughly address why, or why not,
future discovery was necessary to resolve the Board's alleged violation of the Commerce
Clause. We acknowledge the numerous additional arguments the Board makes to contend
no remand for factual development is necessary, i.e., the impact on interstate commerce
is speculative and "[i]f this Court were to conclude that a Pike style test should be
applied, there are numerous factors weighing overwhelmingly in favor of Wabaunsee
County." The Board further points out that the zoning regulation is an exercise of police
power, not commerce power, and for that reason enjoys a strong presumption of validity,
citing Maine v. Taylor, 477 U.S. 131, 138, 106 S. Ct. 2440, 91 L. Ed. 2d 110 (1986).
40


All of the Board's arguments converge on a single point, however: that we should
decide the balancing as a matter of law, when we only have the Board's arguments to
consider. No fact-based arguments have been developed for the Plaintiffs and
Intervenors. For example, this court cannot know how much electricity would be
generated from Wabaunsee County wind and eventually kept out of the interstate power
grid if there were no Board prohibition against CWECS. This type of information would
be relevant in a Pike analysis. Cf. Pike, 397 U.S. at 145 (compelling grower to build
packing facilities that would cost approximately $200,000 constituted unlawful burden on
interstate commerce).

Over objection of the Plaintiffs and Intervenors, they were denied a meaningful
opportunity to discovery and an evidentiary hearing. Plaintiffs specifically argued in their
response to the Board's motion to dismiss that "at best, no information has been
developed to allow the Court to balance burdens and benefits of the County's ban of
commercial wind energy generation systems."

After reading the briefs, hearing arguments and considering the case law stated
above, we conclude this issue should be reversed and remanded to the district court. The
court should allow discovery, conduct the Pike balancing test, and make findings of fact
and conclusions of law for the record. After development of a proper factual record, this
court will be in a better position to review the district court's factual and legal
conclusions, if asked. See Lebanon Farms Disposal, 538 F.3d at 251.

c. Other arguments

We have reviewed the multitude of other arguments of the parties and amici
curiae. We conclude they have no merit. Several warrant addressing in the opinion.

41

The Board argues that because the amended zoning regulation concerns local land
use, it is not the type of regulation that is within the protection of the dormant Commerce
Clause. We disagree. In Blue Circle Cement, Inc., a cement manufacturer challenged a
zoning ordinance targeting hazardous waste. The Tenth Circuit Court of Appeals
concluded the zoning regulation affected the dormant Commerce Clause and was subject
to the Pike test. See also Wood Marine Service, Inc. v. City of Harahan, 858 F.2d 1061
(5th Cir. 1988) (zoning ordinance survived Commerce Clause scrutiny because "there is
no evidence of even an incidental burden on interstate commerce"); BFI Waste System of
North America v. Dekalb County, GA, 303 F. Supp. 2d 1335, 1356 (N.D. Ga. 2004)
(zoning ordinance survived Pike balancing test and did not violate dormant Commerce
Clause); Island Silver & Spice v. Islamorada, Village of Islands, 486 F. Supp. 2d 1347,
1352 (S.D. Fla. 2007) (zoning ordinance did not survive Pike balancing test and violated
dormant Commerce Clause).

We further observe that the Pike test itself contains the element of "local" public
interests. It provides: "If a legitimate local purpose is found, then the question becomes
one of degree. And the extent of the burden that will be tolerated will of course depend
on the nature of the local interest involved." (Emphasis added.) Pike, 397 U.S. at 142.

In an argument the Board admits is quite similar to the one above, the Board
argues that we need not apply the Pike test to the facts of the instant case. It claims that
two recent United States Supreme Court opinions are the latest of several where the Court
found that "some state regulations simply do not require an analysis under the Pike test."
They cite United Haulers, 550 U.S. 330, and Department of Revenue of Ky. v. Davis, 553
U.S. 328, 128 S. Ct. 1801, 170 L. Ed. 2d 685 (2008). We disagree. As discussed above,
and as acknowledged by the Davis Court, "United Haulers included a Pike analysis." 553
U.S. at 353.

As for Davis, we note that the Court acknowledged:
42


"Concluding that a state law does not amount to forbidden discrimination against
interstate commerce is not the death knell of all dormant Commerce Clause challenges,
for we generally leave the courtroom door open to plaintiffs invoking the rule in Pike,
that even nondiscriminatory burdens on commerce may be struck down on a showing that
those burdens clearly outweigh the benefits of a state or local practice." (Emphasis
added.) 553 U.S. at 353.

Additionally, Davis is easily distinguishable: it is not a land use case. It involved the
State of Kentucky's income tax structure that exempted the interest on bonds issued by
Kentucky or its subdivisions from state income tax, while taxing interest income on
bonds from other states and their subdivisions. Moreover, the Court admitted:

"It would miss the mark to think that the Kentucky courts, and ultimately this Court, are
being invited merely to tinker with details of a tax scheme; we are being asked to apply a
federal rule to throw out the system of financing municipal improvements throughout
most of the United States, and the rule in Pike was never intended to authorize a court to
expose the States to the uncertainties of the economic experimentation the Davises
request." (Emphasis added.) 553 U.S. at 356.

By contrast, the instant case involved one county and its zoning regulations.
United Haulers involved two counties; the Court performed the Pike analysis.

Amicus curiae Protect plays a variation on this basic theme. It argues that through
enactment of federal statutes, Congress has eliminated any role for dormant negative
Commerce Clause analysis in the siting of wind energy electric generation facilities.
More particularly, Protect contends that Congress has expressly left the regulation of the
generation of electric energy to the states.

Before beginning, we should acknowledge the Supreme Court's declaration that
"[i]t is difficult to conceive of a more basic element of interstate commerce than electric
43

energy, a product used in virtually every home and every commercial or manufacturing
facility. No state relies solely on its own resources in this respect." F.E.R.C. v.
Mississippi, 456 U.S. 742, 757, 102 S. Ct. 2126, 72 L. Ed. 2d 532 (1982). Accordingly, as
a general rule electric energy would be afforded protection under the Commerce Clause.
See New England Power Co. v. New Hampshire, 455 U.S. 331, 341, 102 S. Ct. 1096, 71
L. Ed. 2d 188 (1982).

As support for Protect's argument, it relies upon two sections of the Federal Power
Act : (1) 16 U.S.C. § 824(a) (2006), and (2) § 731 of the Energy Policy Act of 1992,
Public Law 102-486, 106 Stat. 2776, which is reprinted as a statutory note at 16 U.S.C. §
796 (2006) and 16 U.S.C. § 824.

1. The Federal Power Act of 1935: 16 U.S.C. § 824(a)

Protect argues that in the area of the generation of electricity, "Congress has said
that federal regulatory jurisdiction, even in matters impacting interstate commerce,
extends 'only to those matters that are not subject to state regulation.' 16 U.S.C. §
824(a)." (Emphasis added.) This snippet of quoted language is from § 201(a) of the
Federal Power Act, codified at 16 U.S.C. § 824(a), which provides:

"It is declared that the business of transmitting and selling electric energy for ultimate
distribution to the public is affected with a public interest, and that Federal regulation of
matters relating to generation to the extent provided in this subchapter and subchapter III
of this chapter and of that part of such business which consists of the transmission of
electric energy in interstate commerce and the sale of such energy at wholesale in
interstate commerce is necessary in the public interest, such Federal regulation, however,
to extend only to those matters which are not subject to regulation by the States."
(Emphasis added.)

44

We start our analysis of Protect's argument by agreeing with its underlying
premise: Congress may authorize the states to engage in activities that would otherwise
be forbidden by the Commerce Clause. Maine v. Taylor, 477 U.S. 131, 138, 106 S. Ct.
2440, 91 L. Ed. 2d 110 (1986) (citing Southern Pacific Co. v. Arizona ex rel. Sullivan,
325 U.S. 761, 769, 65 S. Ct. 1515, 89 L. Ed. 1915 [1945]); New England Power Co. v.
New Hampshire, 455 U.S. 331 (Congress may confer "upon the states an ability to restrict
the flow of interstate commerce that they would not otherwise enjoy").

The Supreme Court has also held, however, that "because of the important role the
Commerce Clause plays in protecting the free flow of interstate trade, [the] Court has
exempted state statutes from the implied limitations of the Clause only when the
congressional direction to do so has been 'unmistakably clear.'" (Emphasis added.)
Maine v. Taylor, 477 U.S. at 138-39 (citing South-Central Timber Development, Inc. v.
Wunnicke, 467 U.S. 82, 91, 104 S. Ct. 2237, 81 L. Ed. 2d 71 [1984]). Stated by the Court
another way, "Congress must manifest its unambiguous intent before a federal statute will
be read to permit or to approve such a violation of the Commerce Clause . . . ."
(Emphasis added.) Wyoming v. Oklahoma, 502 U.S. 437, 458, 112 S. Ct. 789, 117 L. Ed.
2d 1 (1992). As a result, the Court has declared that "[w]hen Congress has not 'expressly
stated its intent and policy' to sustain state legislation from attack under the Commerce
Clause," the courts lack "authority to rewrite legislation based on mere speculation as to
what Congress 'probably had in mind.'" New England Power Co. v. New Hampshire, 455
U.S. at 343. After reviewing the plain language of § 824(a), we have difficulty
concluding it is a manifestation of Congress' unambiguous intent, expressed through
unmistakably clear language, to permit the states to regulate the generation of electric
energy free from Commerce Clause restraint.

Instead, the statute more properly appears to merely define the extent of the
federal preemptive effect on state law. In New England Power Co., the Court held that a
related statute, 16 U.S.C. § 824(b), did not provide an affirmative grant of authority to the
45

states to restrict interstate commerce inconsistent with the Commerce Clause. The Court
first observed that "Section 201(b) of the Act [16 U.S.C. § 824(b)] provides, inter alia,
that the provisions of Part II 'shall not . . . deprive a State or State commission of its
lawful authority now exercised over the exportation of hydroelectric energy which is
transmitted across a State line.'" 455 U.S. at 341. But the Court then concluded this
language did not support New Hampshire's position of exemption from the Commerce
Clause:

"However, this provision is in no sense an affirmative grant of power to the states to
burden interstate commerce 'in a manner which would otherwise not be permissible.'
Southern Pacific Co. v. Arizona ex rel. Sullivan, supra, at 769. In § 201(b), Congress did
no more than leave standing whatever valid state laws then existed relating to the
exportation of hydroelectric energy; by its plain terms, § 201(b) simply saves from pre-
emption under Part II of the Federal Power Act such state authority as was otherwise
'lawful.' The legislative history of the Act likewise indicates that Congress intended only
that its legislation 'tak[e]no authority from State commissions.' H.R.Rep.No.1318, 74th
Cong., 1st Sess., 8 (1935) (emphasis added)." 455 U.S. at 341.

The New England Power Co. Court went on to explain:

"Nothing in the legislative history or language of the statute evinces a congressional
intent 'to alter the limits of state power otherwise imposed by the Commerce Clause,'
United States v. Public Utilities Comm'n of California, supra, 345 U.S., at 304, 73 S. Ct.,
at 712, or to modify the earlier holdings of this Court concerning the limits of state
authority to restrain interstate trade. E.g., Pennsylvania v. West Virginia, 262 U.S. 553
(1923); West v. Kansas Natural Gas Co., 221 U.S. 229 (1911)." 455 U.S. at 341.

The Court concluded instead that "Congress' concern was simply 'to define
the extent of the federal legislation's pre-emptive effect on state law.' Lewis v. BT
Investment Managers, Inc., supra, [447 U.S.] at 49." 455 U.S. at 341.

46

Ten years later the Court rejected a similar Commerce Clause exemption argument
in Wyoming v. Oklahoma, 502 U.S. 437. There, Wyoming challenged an Oklahoma
statute that required Oklahoma's coal-fired electric generating plants to burn a coal
mixture containing at least 10 per cent Oklahoma coal. Oklahoma argued that the
"savings clause" in § 824(b)(1) of the Federal Power Act delivered its statute from
Commerce Clause scrutiny. That section provided for federal regulation of "electric
energy at wholesale in interstate commerce," but reserved to the states the regulation of
"any other sale of electric energy." 16 U.S.C. § 824(b)(1).

Accordingly, Oklahoma argued its quota statute was a proper exercise of its
authority to regulate local retail electric rates which in turn permitted discriminatory
impact on the movement of Wyoming coal in interstate commerce. More specifically,
Oklahoma contended that included in its authority to ensure lower local utility rates was
the authority to, among other things, reduce over-dependence on a single source of
supply, e.g., Wyoming.

The Court agreed that Oklahoma had certain authority under the Federal Power
Act. But after reviewing the holding and rationale in New England Power Co., including
the determination that § 824(b)(1) simply saved from preemption under the Act such state
authority as was otherwise "lawful," the Wyoming Court held Congress had not
manifested its unambiguous intent to permit Oklahoma's Commerce Clause violation.
The Court also observed it had "uniformly subjected Commerce Clause cases implicating
the Federal Power Act to scrutiny on their merits," i.e., Congress had not unambiguously
empowered states to burden or discriminate against interstate commerce. 502 U.S. at 458.

Based upon this Federal Power Act caselaw, we conclude § 824(a) of the Act does
not, through unmistakably clear language, affirmatively grant power to the states to
burden interstate commerce. Rather, the statute means that (1) Congress has not
preempted the Board's zoning regulations; but (2) these regulations are nevertheless still
47

subject to Commerce Clause scrutiny. See also Sporhase v. Nebraska ex rel. Douglas,
458 U.S. 941, 960, 102 S. Ct. 3456, 73 L. Ed. 2d 1254 (1982) (although water statutes
demonstrate Congress' deference to state law, they do not indicate Congress wished to
remove federal constitutional constraints on state laws); Lewis v. BT Investment
Managers, Inc., 447 U.S. 27, 49, 100 S. Ct. 2009, 64 L. Ed. 2d 702 (1980) ("[I]t appears
that Congress' concern was to define the extent of the federal legislation's pre-emptive
effect on state law." Thus, the federal act "applies only to state legislation that operates
within the boundaries marked by the Commerce Clause."). Contrast, e.g., In Western &
Southern L. I. Co. v. State Bd. of Equalization, 451 U.S. 648, 653-54, 101 S. Ct. 2070, 68
L. Ed. 2d 514 (1981).

2. The Energy Policy Act of 1992

Protect next argues that even greater support for its claim of exemption from
Commerce Clause scrutiny is found in recent federal legislation, suggesting there can
now be no real debate about the persuasiveness of its position. It argues: "Moreover,
more recent legislation makes it clear that although the federal government now regulates
such things as maximum emissions levels and rates, supervises interstate activity, and
oversees other public safety standards, the siting of specific power facilities is left at the
state level." (Emphasis added.)

In support of Protect's argument, it points out that the Energy Policy Act of 1992
provides:

"Nothing in this title or in any amendment made by this title shall be construed as
affecting or intending to affect, or in any way to interfere with, the authority of any State
or local government relating to environmental protection or the siting of facilities."
(Emphasis added.) Energy Policy Act of 1992, Pub. L. No. 102-486, § 731, 106 Stat.
2776, 2921 (1992).

48

Among other things, Protect also relies upon Tampa Elec. Co. v. Garcia, 767 So.
2d 428, 436 (Fla. 2000). There, based upon this statutory language (§ 731), the Florida
Supreme Court rejected appellee's arguments that the state statute on siting of generating
plants violated the dormant Commerce Clause and was preempted by the Energy Policy
Act of 1992. The court concluded that "power-plant siting and need determination are
areas that Congress has expressly left to the states." 767 So. 2d at 436.

We begin our analysis of this argument by repeating the standards of review
described above: Congress' language authorizing states to engage in activities that would
otherwise be forbidden by the Commerce Clause must be "unmistakably clear," and
Congress must manifest its "unambiguous intent" to do so. As a result, it makes sense
that we first look for guidance in a Supreme Court decision involving statutory language
very similar to the language Protect cites from the Energy Policy Act: Sporhase v.
Nebraska, 458 U.S. 941.

In Sporhase, the Supreme Court considered whether a Nebraska state water law
impermissibly interfered with interstate commerce. Nebraska argued that Congress had
"authorized the States to impose otherwise impermissible burdens on interstate commerce
in ground water." 458 U.S. at 958. In support of its argument, Nebraska cited to 37
statutes in which Congress deferred to state water law, as well as to a number of interstate
compacts dealing with water rights that received congressional approval.

The Court determined that the statute discussed by Nebraska, Section 8 of the
Reclamation Act of 1902, 32 Stat. 390, was typical of the 37 statutes. Section 8 of the Act
contains language quite similar to the statute, § 731, upon which Protect relies:

"'[N]othing in this Act shall be construed as affecting or intended to affect or to in any
way interfere with the laws of any State or Territory relating to the control, appropriation,
use, or distribution of water used in irrigation.'" 458 U.S. at 959.
49


In comparison, § 731 of the Energy Policy Act cited by Protect provides:

"Nothing in this title or in any amendment made by this title shall be construed as
affecting or intending to affect, or in any way to interfere with, the authority of any State
or local government relating to environmental protection or the siting of facilities."

The Sporhase Court first held that the cited language "defines the extent of the
federal legislation's pre-emptive effect on state law." (Emphasis added.) 458 U.S. at 959
(citing New England Power Co., 455 U.S. at 341; Lewis v. BT Investment Managers, Inc.,
447 U.S. at 49). It then quickly rejected Nebraska's contention:

"Although the 37 statutes and the interstate compacts demonstrate Congress'
deference to state water law, they do not indicate that Congress wished to remove federal
constitutional constraints on such state laws. The negative implications of the Commerce
Clause, like the mandates of the Fourteenth Amendment, are ingredients of the valid state
law to which Congress has deferred. Neither the fact that Congress has chosen not to
create a federal water law to govern water rights involved in federal projects, nor the fact
that Congress has been willing to let the States settle their differences over water rights
through mutual agreement, constitutes persuasive evidence that Congress consented to
the unilateral imposition of unreasonable burdens on commerce. In the instances in which
we have found such consent, Congress' '"intent and policy" to sustain state legislation
from attack under the Commerce Clause' was "expressly stated."'" (Emphasis added.) 458
U.S. at 959-60.

Just as the Sporhase Court rejected Nebraska's argument, we reject for the same
reasons the same argument by Protect based upon virtually the same language.

The case of Lewis v. BT Investment Managers, Inc., 447 U.S. 27, cited in
Sporhase, provides additional support. There, the state of Florida argued that the federal
Bank Holding Company Act of 1956 permitted the state to pass legislation that might
50

otherwise violate the Commerce Clause, i.e., prohibiting out of state banks from owning
or controlling businesses within the state that provided investment advisory services.
Section 7 of the Act (12 U.S.C. § 1846) stated:

"'The enactment by the Congress of the Bank Holding Company Act of 1956 shall not be
construed as preventing any State from exercising such powers and jurisdiction which it
now has or may hereafter have with respect to banks, bank holding companies, and
subsidiaries thereof.' 70 Stat. 138." (Emphasis added.) 447 U.S. at 45-46 n.12.

The Lewis Court held the legislation was an invalid restriction on interstate
commerce. It first acknowledged that § 7 "does reserve to the States a general power to
enact regulations applicable to bank holding companies. This section was intended to
preserve existing state regulations of bank holding companies, even if they were more
restrictive than federal law." 447 U.S. at 48-49. However, the Court held § 7 was not
"intended to extend to the states new powers to regulate banking that they would not have
possessed absent the federal legislation. Rather, it appears that Congress' concern was to
define the extent of the federal legislation's pre-emptive effect on state law." 447 U.S. at
49. The Court concluded that § 7 applied "only to state legislation that operates within the
boundaries marked by the Commerce Clause." 447 U.S. at 49.

Finally, we observe that while the commentary is limited regarding the case upon
which Protect relies, Tampa Elec. Co. v. Garcia, it has been unanimously negative. See
Ramsey, Power Plant Siting in a Deregulated Electric Energy Industry; Discerning the
Constitutionality of Siting Statutes under the Dormant Commerce Clause, 21 J. Land Use
& Envtl. L. 91 (Fall 2005); Note, Federalism, Electric Industry Restructuring, and the
Dormant Commerce Clause: Tampa Electric Co. v. Garcia and State Restrictions on the
Development of Merchant Power Plants, 43 Nat. Resources J. 615 (Spring 2003); Fels &
Lindh, Lessons from the California "Apocalypse": Jurisdiction over Electric Utilities, 22
Energy L.J. 1 (2001).
51


As the authors wrote in Lessons from the California "Apocalypse," 22 Energy L.J.
at 30:

"We believe that the Florida court's reliance on Section 731 of the Energy Policy
Act was misplaced . . . United States Supreme Court precedent requires an 'unambiguous'
expression of congressional intent in order to shield protectionist state regulation from
invalidation under the Commerce Clause. By its terms, section 731 does no more than
leave unaffected whatever authority the states had, prior to enactment of the Energy
Policy Act, to regulate siting decisions; certainly nothing in section 731 can be read as
an affirmative grant of authority to the states to discriminate in favor of their own
residents against interstate commerce." (Emphasis added.)

CONCLUSION

1. We affirm the district court's disposition of (a) the claim under the Takings
Clause; (b) the related takings-based claim under 42 U.S.C. § 1983; and (c) the
inverse condemnation claim.

2. We affirm the district court's dismissal of the dormant Commerce Clause claim
alleging discrimination against interstate commerce.

3. We reverse the district court's apparent dismissal of the Commerce Clause
claim alleging the Board's decision to amend the zoning regulations placed
incidental burdens on interstate commerce that outweighed the benefits. As a
result, the court's dismissal of the related burden-based claim under 42 U.S.C. §
1983 is also reversed. See United Haulers Assn., Inc. v. Oneida-Herkimer Solid
Waste Management, 550 U.S. 330, 337, 127 S. Ct. 1786, 167 L. Ed. 2d 655
(2007) (42 U.S.C. § 1983 claim included allegation that counties' ordinances
52

violated the Commerce Clause by placing an incidental burden on interstate
commerce that outweighed the ordinances' benefits).

4. We remand to the district court with instructions to allow discovery on the
Commerce Clause burden-based claim, to conduct the Pike balancing test, and
to make findings of fact and conclusions of law on that claim and any other
issues that may remain.