Relating to Real Estate

The Fourth Circuit Court of Appeals affirmed the United States District Court’s dismissal of the complaint of Kevin Quinn, who argued that a comprehensive sewer service plan and a so-called Grandfather/Merger Provision that limited development on South Kent Island in Queen Anne’s County constituted a compensable taking and violated his due process and equal protection rights. Quinn v. Bd. of Cty. Commissioners for Queen Anne’s Cty., Maryland, 862 F.3d 433 (4th Cir. 2017), cert. denied sub nom. Quinn v. Bd. of Cty. Comm’rs for Queen Anne’s Cty., Maryland, 138 S. Ct. 1593 (2018).

Quinn and his company bought over 200 small lots on South Kent Island with the plan to develop them. Unfortunately, South Kent Island had no sewer system, and many properties on the island would not support septic systems – even many of the lots that had houses on them.

Queen Anne’s County had two solutions for this problem. First, it planned to extend sewer service but only to streets with failing septic systems. Both developed and undeveloped lots on such streets would be served by the new service; however, other properties would not be served. Secondly, pursuant to a Grandfather/Merger Provision, the county would not grant a building permit for a lot smaller than the minimum size under the then-existing zoning regulations unless that lot was merged with all contiguous lots that were under common ownership. Quinn owned some vacant lots that would receive sewer service under the plan, and he owned some small lots that, once merged with contiguous lots, would become developable. Unfortunately, Quinn also owned almost 200 vacant lots that would not receive sewer service and that he therefore would be unable to develop.

The Fourth Circuit considered and rejected each of the arguments that Quinn presented. Quinn claimed compensation under the Takings Clause of the Fifth Amendment to the United States Constitution because the sewer system was not designed to benefit all of his lots. The court held that this claim failed because Quinn never had a property interest in obtaining the sewer service. The court stated that a takings claim is only applicable if “the government’s action actually interfered with the landowner’s antecedent bundle of rights.”

Next the court rejected Quinn’s claim under the Takings Clause based on the Grandfather/Merger Provision. The court found that provision to be a standard zoning tool that is designed “for a specific and legitimate purpose,” quoting Murr v. Wisconsin, 137 S. Ct. 1933 (2017), and that does “not unacceptably interfere with [Quinn]’s existing property interests under the regulatory takings framework.” The court stated that lots that would not be developed were “undevelopable and valueless” because “they cannot accommodate a septic system, not because of any government action.”

Quinn further contended that both the sewer extension plan and the Grandfather/Merger provision violated his due process rights. The court held that Quinn’s substantive due process rights were not violated by the sewer plan because he never had an entitlement to receive sewer service, and Quinn’s substantive due process rights were not violated by the Grandfather/Merger Provision because Quinn could not show that the provision “bore no rational relationship to the exercise of the state’s traditional police power through zoning.”

Finally, Quinn argued that the governmental actions violated his right to equal protection of the law by disproportionately affecting his property. But the Equal Protection Clause of the Fourteenth Amendment “keeps governmental decisionmakers from treating differently persons who are in all relevant respects alike,” and that was not the case in these circumstances.

For questions, please contact Ed Levin (410) 576-1900.