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Babb v. Missouri Public Service Commission
Citations: 414 S.W.3d 64; 2013 Mo. App. LEXIS 1420; 2013 WL 6170640Docket: No. WD 76384
Court: Missouri Court of Appeals; November 25, 2013; Missouri; State Appellate Court
The Board of Aldermen for Clarkson Valley, Missouri, denied James and Frances Babb's application for a Special Use Permit (SUP) to install a solar energy system on their home, citing a local ordinance. The Babbs, supported by the Missouri Solar Energy Industries Association (MOSEIA), filed a lawsuit claiming that the city's ordinance was preempted by state regulations under the Electric Utility Renewable Energy Standard Requirements. They also contended that the Board's denial of their application was arbitrary and capricious. The trial court granted partial summary judgment for the Babbs, declaring the city's ordinance void and ordering the issuance of a permit or allowing construction to proceed without one. The Babbs began construction before the judgment was finalized and later dismissed their remaining claims, leading to an appeal by the City. In its appeal, the City argued that (1) its building ordinances did not conflict with state regulations, (2) the Babbs’ petition lacked a valid claim, (3) the petition was untimely, and (4) MOSEIA's petition was also invalid. The trial court's ruling was upheld. Additionally, the background notes that Proposition C, adopted in November 2008, mandated that Missouri's investor-owned utilities produce a specified percentage of electricity from renewable sources by 2021, leading to the development of related regulations governing renewable energy use and incentives. After Proposition C, the Babbs initiated plans for a solar energy system at their home, completing an application process as per 4 CSR 240-20.065, which was approved by Missouri Ameren on October 12, 2011. They then applied for a building permit for one hundred solar panels on November 1, 2011. Although other homes had solar panels, the proposed number exceeded previous installations but complied with existing City ordinances, which had no specific regulations for residential solar systems at that time. On the same day the Babbs submitted their application, the City enacted a moratorium on solar system construction. The timeline of the application submission and the moratorium's adoption is unclear. On January 3, 2012, while their permit application was pending and the moratorium was in place, the Board passed two ordinances: one changing the permit requirement from a building permit to a Special Use Permit (SUP), and the other establishing specific requirements for solar panel installations. The Babbs applied for the SUP on January 5, 2012, and received approval from the Monarch Fire Department on January 31, 2012. A public hearing held by the Planning and Zoning Commission (P.Z.) on February 3, 2012, led the Babbs to reduce their rooftop panels from one hundred to forty-two and agree to install additional panels on poles adjacent to their home. Following these modifications, the P.Z. recommended approval of their revised plan. Despite this recommendation, the Board denied the Babbs' SUP application with a 6-0 vote without providing reasons. The Babbs subsequently filed a lawsuit in the Circuit Court of Cole County, claiming the City ordinance was void due to preemption by the Missouri Renewable Energy Act of 2008. Their petition included three counts: Count I challenged the ordinance's validity against state regulations; Count II sought a declaration of vested rights based on their initial permit application; and Count III argued that the denial of the SUP was arbitrary and an abuse of discretion. The Babbs filed for partial summary judgment regarding preemption and abuse of discretion, leading to a trial court ruling on June 29, 2012, that granted this request but did not address a third count. The court ordered the City to issue a permit within one day, and if not, construction could begin without one. The City failed to issue the permit, prompting the Babbs to commence construction of their solar energy system, which they completed in November 2012. The Babbs then amended their petition to include a claim for governmental taking due to the City’s inaction on the permit. On January 29, 2013, the Babbs dismissed two counts and sought final judgment based on the earlier ruling. The trial court subsequently dismissed all counts against the PSC for failing to state a claim. On April 15, 2013, the court finalized its earlier ruling. The City appealed, arguing that the trial court mistakenly granted summary judgment by concluding that its ordinance was preempted by state law and that several counts failed to state claims or were time-barred. The City contended that its ordinances were regulatory and did not conflict with state statutes. The analysis highlighted that municipal ordinances must align with state law to avoid being void. The Babbs contend that state regulations preempt local ordinances concerning solar power systems, asserting that the ordinances conflict with state law as established by the Public Service Commission (PSC). The analysis of preemption involves two inquiries: whether the Missouri legislature has expressly preempted local regulation and whether the city's ordinances conflict with state law. The Babbs fail to identify explicit statutory language preempting local authority over solar energy systems; instead, state regulations imply local entities retain some regulatory power. To ascertain a conflict, the test is whether the ordinance allows what the statute prohibits or vice versa. A local law that contradicts state law is preempted, but localities can impose additional regulations unless explicitly prohibited by state law. An ordinance that merely expands upon statutory requirements is valid unless the statute expressly limits such expansions. If a statute is silent on certain rights, local governments may have the authority to regulate those areas. However, if the provisions of local ordinances and state statutes are inconsistent and irreconcilable, the ordinances would be nullified by state law. The relevant state regulations were created under the Net Metering and Easy Connection Act, which mandates that customer-generation units comply with various safety and performance standards set by local authorities and other recognized codes. The regulations also stipulate certification requirements for system owners from qualified professionals as part of the approval process. The validity of the state statute and regulations is not contested by either party, necessitating a comparison of their plain meanings with municipal ordinances to determine preemption or conflict. Two state regulations, 4 CSR 240-20.065 and 4 CSR 240-20.100, govern customer-generated solar energy systems under statutory authority. Regulation 4 CSR 240-20.065 outlines interconnection standards for net metering units with electric utility distribution systems, requiring electric utilities to approve plans and specifications for systems. It mandates compliance with safety and performance standards from various codes, including the National Electrical Code and IEEE standards. Specific provisions state that no system can operate in parallel with the utility without written approval, and applications for interconnection must be submitted with detailed plans, which utilities must respond to within specified timeframes. Regulation 4 CSR 240-20.100, enacted later, defines customer-generators and outlines compliance with the Renewable Energy Standard, establishing eligibility for energy tax credits and rebates. A customer-generator is defined as an entity operating a renewable energy unit that meets specific criteria, including being interconnected with an electric utility and adhering to safety and performance standards. The City argues that its authority to impose building and zoning codes on customer-generated systems is supported by language in the regulations indicating compliance with local safety standards. However, it is necessary to examine whether the City’s ordinance conflicts with existing state statutes and regulations governing these systems. Section 500.020-M2300 of the municipal code outlines specific restrictions for roof-mounted solar energy systems. These include requirements that such systems must be parallel to the roof and limited to a height of six inches above the roof surface. Moreover, they must terminate at least three feet from the roof edge or ridge and one and a half feet from any valley. The ordinance also details a multi-page approval process requiring additional certifications from various organizations, supervision by the system designer during installation, the use of non-glare materials for photovoltaic (PV) panels, and structural analysis by a licensed engineer or architect. While the Babbs did not identify any specific conflicts between the ordinance and existing statutes, they suggested that certain provisions might be inconsistent in practical application. The City argues that the trial court's ruling creates disparate standards for solar energy systems based on whether they are under contract with an electric utility. The City maintains that its ordinances apply uniformly to all solar systems and are not merely regulatory of electric utility rebates. The requirements outlined in the ordinance generally mirror those of state regulations, ensuring compliance for both grid-connected systems and those not covered by state law. The ordinance is positioned as consistent with state statutes, and the Babbs have not demonstrated that the additional local requirements render solar system construction impractical or excessively burdensome within the City. Local regulations may exceed state requirements as long as they do not prohibit what state law allows. A city can only enact ordinances that align with state law on the same subject, as established in City of Kansas City v. Carlson. While the state may not regulate the use of reflective materials or the appearance of solar panels affecting neighboring properties, these issues fall within the city's police powers. The trial court's summary judgment in favor of the Babbs and MOSEIA on Count I was determined to be erroneous. Consequently, the court granted Point One, but a remand was deemed unnecessary due to the resolution of Point Three. Points Two and Four were not addressed since they pertained to the same summary judgment. In Point Three, the city contended that the trial court improperly granted summary judgment to the Babbs on Count III, arguing their review request of the city's denial of a special use permit (SUP) was filed under the incorrect statute and was untimely. The city asserted that the Babbs needed to seek review under section 89.110 within thirty days, but they instead filed under section 536.150, forty-one days after the denial. The court recognized the confusion surrounding the applicable statutes for zoning decisions made by entities other than a Board of Zoning Adjustment (BZA) and concluded that section 89.110 does not govern such cases. The interpretation of section 89.110 is confined to decisions made by boards of adjustment, as indicated by its plain language. The 'board of adjustment' is defined under chapter 89.080, necessitating the use of this definition in interpreting section 89.110. The requirement for seeking writ of certiorari review applies solely to decisions made by boards of adjustment (BZAs). The case of Lorenz v. City of Florissant, 747 S.W.2d 222 (Mo.App. E.D.1988), illustrates this, where the court held that the denial of a homeowner's variance request by a city council did not invoke section 89.110's writ requirement, as it pertained only to BZA decisions. The court agrees with Lorenz, asserting that section 89.110 is explicitly limited to BZA actions. Section 536.150 allows for judicial review of non-contested decisions by administrative bodies when no other review mechanism is provided. The trial court determined that the City’s denial of the Babbs’ special use permit (SUP) application was a non-contested decision, which was not challenged on appeal. While other Missouri appellate opinions have extended section 89.110 to all zoning decisions, the court disagrees, emphasizing that the language of section 89.110 restricts its application to BZA decisions. The Babbs’ Count III petition, claiming the denial of their SUP application was arbitrary and capricious, was appropriately filed under section 536.150, as the City’s decision did not involve a BZA. Therefore, section 89.110 is inapplicable, and the Babbs' request for review was timely and valid under section 536.150, which lacks a thirty-day filing deadline for non-contested administrative decisions. The trial court's summary judgment in favor of the Babbs on Count III is affirmed. The City did not appeal the trial court's finding that its denial of the Babbs' Special Use Permit (SUP) application was arbitrary and capricious, resulting in the affirmation of the trial court’s judgment in favor of the Babbs on Count III. The City’s argument regarding the filing of Count III under the wrong statute, making it time-barred, was not upheld. In addressing the City’s claim in Point Five that the trial court erred by entering a final judgment based on a superseded petition, the court noted that the Babbs' first amended petition incorporated references to prior claims ruled on by the court, thus not abandoning them. The trial court's final judgment, which included these claims, was therefore deemed correct. Regarding the Public Service Commission's (PSC) position as an intervenor, it argued that the trial court lacked jurisdiction to review the Babbs' petition, as claims involving PSC regulations should first be reviewed by the PSC. However, the court concluded that it had jurisdiction for three reasons: (1) the case involved the validity of a city ordinance, not the underlying state statutes or regulations; (2) under section 536.050, exhaustion of administrative remedies is not required if it would lead to undue prejudice; and (3) the declaratory judgment provision aimed to resolve uncertainties regarding rights before any harm occurs. In Foster v. State, the court clarified that a trial court possesses the constitutional authority to issue a declaratory judgment, a power that the Public Service Commission (PSC) lacks. The PSC cannot determine the validity of a city ordinance, reinforcing the trial court's subject matter jurisdiction to resolve the case without PSC review. The court denied the Babbs' motion to strike the PSC's amended brief and dismissed the PSC's arguments as unpersuasive. The Babbs' motion to dismiss the appeal as moot was also denied. The trial court erred in granting summary judgment on Count I, declaring the city ordinance invalid, due to insufficient evidence demonstrating a conflict with state statutes and regulations. Regarding Count III, the City’s appeal contended the petition was untimely under section 89.110; however, the court found the petition was properly filed under section 536.150 and not subject to the 89.110 deadline. The City did not contest the trial court's determination that the Board’s denial of the Babbs' special use permit (SUP) was arbitrary and capricious, which affirmed the judgment in favor of the Babbs on Count III. The judgment is supported by the fact that the Babbs' application for a building permit did not require an SUP for solar energy systems, as the relevant ordinances did not address them at that time. The state statutes and regulations apply only to solar energy systems connected to an electric utility. The Babbs filed their petition in Cole County due to the PSC being a co-defendant. The City argued that the ordinances were not attached to the petition nor adequately referenced, but this argument was not sufficient to undermine the court's findings. All regulatory and statutory references are to the Missouri Code and RSMo, respectively, as updated. The Babbs' claims rely on ordinances attached to their affidavits filed in support of their motion for summary judgment, which the City has not contested regarding their validity or applicability. The legal issue concerning whether the ordinance preempts state law due to conflicting regulations is not currently before the court. Count III of the Babbs’ petition presumes the ordinance's lawfulness and argues that the City's denial of their Special Use Permit (SUP) application was arbitrary and capricious, focusing on the City's administrative actions rather than legislative ones. Judicial review of zoning decisions is governed by Section 89.110, which outlines who may appeal decisions of a board of adjustment, including aggrieved individuals and neighborhood organizations. The excerpt also addresses misconceptions in legal treatises regarding the interpretation of "officer, department, board or bureau of the municipality" in Section 89.110, clarifying that it pertains to aggrieved parties eligible to appeal rather than additional decision-making bodies. Section 89.100 specifies that appeals to the board of adjustment can be filed by any aggrieved person or municipal officer affected by an administrative officer's decision. Writs directed to the board of adjustment are outlined in section 89.110. The board, defined in section 89.080, consists of five members appointed by the local legislative body, operating under established rules to hear appeals related to zoning decisions as per section 89.090. In this case, the Board of Alderman did not hear an appeal regarding the Babbs’ Special Use Permit (SUP) application, as the Planning Zone (P.Z.) only recommended approval without making a binding decision. Consequently, the Board of Alderman acted as the primary decision-maker for the application, dismissing any claim that it functioned as a Board of Zoning Adjustment (BZA). The City did not contest that the Babbs' preemption argument in Count I of their petition should have been filed under section 89.110 rather than section 536.150, acknowledging that statutory review by writ of certiorari is not available for challenges against the validity of an ordinance. This aligns with case law indicating that such challenges pertain to legislative functions, which are not subject to certiorari. Therefore, Count I was appropriately initiated under section 536.150. Additionally, the Public Service Commission's (PSC) first brief was invalidated because it sought affirmation of the trial court's ruling, which did not align with its role as a respondent.