To the editor:

In 2003 the Captiva Civic Association, Lee County and South Seas Resort on Captiva settled a lawsuit concerning future development at the resort. The settlement agreed to maintain — in perpetuity — the 912-unit buildout limit established by the 1973 zoning approvals. Last year the county passed an ordinance removing any density limits at the resort, after which South Seas applied for a rezoning that would bring the total resort units to 1,347. In response, the CCA filed a complaint with Circuit Court seeking enforcement of the settlement’s 912-unit buildout limit. The county has now filed a motion to dismiss the CCA’s complaint, using a number of arguments that this letter will address in the order they were presented.

1) Plain language. The settlement agreement’s second paragraph states that (except for reallocation of existing units) the nine principal “determinations” within a 2002 county document prescribing the resort’s development can only be amended through a public-hearing process. The third paragraph then specifies that determination #1 — the 912-unit buildout limit — cannot be exceeded “at any time.” The county in its motion to dismiss argues that the second paragraph nullifies the third paragraph, such that the 912-unit limit can in fact be amended at the conclusion of a public-hearing rezoning process, which the resort commenced in December. The county’s interpretation of the plain language of the settlement is incorrect for a variety of reasons.

– Except to mention reallocation of existing units, none of the nine key “determinations,” other than the 912-unit buildout limit, is even referenced in the settlement. If it had been the intent of the document that the buildout limit be treated in the same manner as the other determinations (that is, amendable through a public-hearing rezoning process), there would be no reason to reference it. Indeed, there would be every reason not to reference it, to avoid misinterpretation. Instead, the 912-unit limit requirement is stated and twice-restated in three consecutive sentences in the brief document.

– The county’s position is that the third paragraph should be treated as though it does not exist and adds no meaning to the document. This violates an elementary rule of statutory construction, where all words placed within a document are assumed to have purpose and meaning, unless none can be discovered.

– Where different passages in a document are suggested to be in tension, another principle of statutory construction is to find the most plausible explanation for how they can reasonably coexist. In this case, the second paragraph is clearly conditioned by the third paragraph, excluding the 912-unit limit from amendment “at any time.” The county’s position is that the second paragraph erases the third, rendering it meaningless and of no relevance, when there is an obvious explanation for why the two would coexist and be presented one after the other.

– Further evidence that the third paragraph conditions the second is that it immediately follows the passage it qualifies. We use this device of subsequent modification all the time, as in “Yes, you can borrow the car, but be home by ten.”

– The CCA’s central concern in the lawsuit was to maintain the density limits in accordance with the existing 1973 zoning approvals for the resort. The third paragraph was the linchpin passage motivating the CCA to agree to the settlement; without it there would be no reason to sign. It is not credible that the CCA, or any other good-faith signatories to the document, could have intended that the third paragraph would add no meaning to the agreement.

– When presenting the settlement to the commissioners for their approval in 2003, the county attorney provided a brief “Background” description of the agreement. In it, he distinguished between “additional affirmative duties” (i.e., public hearings) the agreement imposes on most resort permit applications; and that the settlement “limits permissible units at South Seas to … 912.” These two aspects of the settlement were described by the county attorney to the commissioners as distinct, with separate meaning and consequence, whereas now the same office argues that one aspect of the agreement strips the other of any purpose or meaning within the document.

2) Ultra vires. The county’s second argument is that it exceeded its lawful authority (acted “ultra vires”) by agreeing to restrict its sovereign police power to regulate development. The county is arguing that as a result of its own purported legal incompetence, the settlement agreement is therefore a nullity and unenforceable.

Police powers regulate the health, safety, welfare and morals of the people and are generally reserved to the states, and hence to localities such as cities and counties. Control over zoning and development is one type of police power. The 2003 settlement is now belatedly argued to be a nullity because the county cannot lawfully agree to a cap on resort development that it cannot unilaterally undo. To tie its own hands would, in effect, relinquish its police power to regulate development in the public interest. So the argument goes.

Before entering this subject, it should be observed that 21 years ago the county attorney, manager, four budget officials and five commissioners signed off on the settlement. Today the county is asking the court to cure what it claims is its own incompetence and, by a happy coincidence, smooth the way for a radical enlarging of South Seas. Questions for later include exactly when the county concluded it had made an unlawful ultra vires agreement and why the existence of the settlement was never mentioned by the county during the months-long public process of removing the resort’s density limits. Its relevance to the issue is undeniable. We should also wish to ascertain whether the settlement was discussed privately within county government — or with South Seas — prior to ordinance approval.

Readers will be familiar with issues throughout American history where Congress, or a state legislature, is accused of passing off its sovereign legislative duties to (usually) an administrative agency, which in effect does the lawmaking. That isn’t cricket; moving down the governmental food chain, neither is it cricket for local authority to cede its police powers, including control over zoning and development. Sovereign powers cannot be lawfully given or traded away. The question here is whether agreeing in 2003 to maintain the still-controlling buildout limits from South Seas’s 1973 zoning approvals, which all parties agreed was in accordance with the Lee Plan, is an unlawful ceding of police powers.

We can begin with the fact that cities and counties all across America are often sued over exercise of police powers. The suits may concern policing and public order, or zoning and development, or environmental practices, or any number of issues impacting our health, safety, welfare or morals. Many of these cases are settled out of court, and they usually involve local government agreeing to modify exercise of its police powers. For example, a settlement involving alleged police misconduct might include a commitment to use dashcams or bodycams. A settlement involving alleged endangerment of protected aquatic species might include a commitment to stricter harbor, boating, waterway or effluent rules. A settlement involving alleged negligent hurricane evacuation preparedness might involve commitments to improve drainage, levees, roadways, traffic supervision, warning systems, etc.

In all these types of cases, localities are voluntarily agreeing through legal settlement to modify and hopefully improve the exercise of their police powers. If all of these concessions were considered ultra vires, that would bind counties and cities from ever settling a police-powers lawsuit, because settlements involve compromise, finding a middle ground that contending parties can mutually and voluntarily agree to. That middle ground normally includes commitments to improve public practice. And while the agreement is voluntary, the commitments within the agreement are usually compulsory. Otherwise the agreement has no teeth. The strength of the commitments can vary across a wide spectrum, from advisory and aspirational, or subject to periodic review, or with conditions for completion, or for a specific length of time, or without a term, as in the case of the South Seas 912-unit buildout limit.

Because a blanket inability of local authority to agree to modify its exercise of police powers would mean localities couldn’t settle most police-power lawsuits, those cases (if not dismissed) would need to proceed to trial. Ironically, that would deprive local authority of a fundamental sovereign power — the ability to enter into contracts, including settlement agreements.

Clearly, local authority has the ability to freely modify exercise of its police powers, through legal settlements and elsewhere, and does so as a matter of course. It cannot however cede its powers — give them to someone else — which it did not do in the situation examined here: The CCA did not acquire any ability to exercise police powers as a result of the settlement. Local authority also cannot agree to exercise its police powers in a way that circumvents a required public process, for example by quietly granting a rezoning without respecting the public’s due-process rights to public hearings and deliberations. That is exactly what the county accuses the settlement of doing, which brings us to its third argument to invalidate the agreement.

3) Contract zoning. This can be an elusive term of art in the world of land use and, not surprisingly, its use migrates within the county’s motion to dismiss. For our purposes, the relevant sense — and what the county accuses the settlement of doing — is a rezoning of the resort without going through the required public process. According to the county, the settlement rezones South Seas by locking in its long-approved density limits, without submitting to a public-hearing process. Actually, the opposite is true.

The settlement didn’t rezone the resort; it cemented crucial aspects of the existing zoning approvals that were in jeopardy. The CCA’s overriding concern was that the county’s comprehensive new 2002 documents, which were created and implemented administratively, without going through a public-hearing process, should in fact have to jump through those hoops to ensure their conformity with the resort’s existing zoning ordinance and the county’s Lee Plan.

Here is how the county attorney described the CCA’s position to the commissioners prior to their sign-off: “Plaintiffs allege that the allowed density had been exceeded, and that the Administrative Interpretation and Compliance Agreement (the 2002 docs) constituted a “rezoning” of the subject property and a grant of additional residential density without the requisite public hearings, and in contravention of the Lee Plan.”

The CCA’s fear was that without public hearings, crucial elements of the existing zoning, especially its density and unit limits, would be eroded. The suit was designed to avert the county from doing its own “contract zoning,” and on that score the settlement succeeded. As we see today, it was a necessary and far-sighted bulwark against rampant overdevelopment.

4) Ripeness. In most civil cases, plaintiffs have to wait until they’re damaged before suing. This matter is different: the settlement prohibits the county from issuing South Seas permits that exceed 912 total units, and since it is in the process of considering a permit application for 1,347 total units, the CCA’s complaint is timely. The threat of the county acting in violation of the settlement is imminent and predictable. It would be an injustice to make the CCA wait for the county to grant permits in excess of 912 resort units and then seek after-the-fact injunctive relief against construction. It is much better for the community, and the resort, to decide this issue now.

5) Separation of powers. Legal briefs usually present their arguments in descending order of persuasiveness, and here we reach into the bottom of the barrel. The county argues that if the Circuit Court affirms the settlement’s enforceability, and prohibits the county from issuing resort permits in excess of 912 total units, the judiciary will unconstitutionally infringe on a prerogative (i.e., permitting development) of another branch of government. On the contrary, it is the sole province of the judiciary to determine a legal settlement’s validity, and if it is found valid, to enforce its strictures. In this case, that would include limits on the county’s ability to permit development at South Seas. Who else but the courts should enforce the obligations of contract?

The county made an equally brittle argument last fall against the state’s executive branch, when it accused the state Department of Commerce of having no jurisdiction to oversee the county’s ordinance granting special density and height exemptions to South Seas. The state Division of Administrative Hearings will soon commence proceedings to investigate the ordinance’s conformity to state and local law.

On a final note, the county makes the point that the new owners of South Seas were not a party to the 2003 settlement, but its interests could be negatively impacted by the CCA complaint. It observes wishfully that the agreement does not specify that it “runs with the land,” does not include a “successor clause” and is not included in the resort’s “chain of title.”

The settlement’s prohibition against permits for more than 912 resort units “at any time” ensures that the settlement does indeed run with the land, and that successor owners are bound by the settlement, whether there is a successor clause or not. Otherwise, the resort could have changed hands soon after the ink dried, voiding the agreement. Concerning chain of title, the court accepted the settlement through a final judgment in 2003; if its existence was not flagged by title insurance during any resort escrow since then, it should have been. Whether the settlement’s existence was disclosed to the new resort owners by the sellers, or by an escrow title search, during their pre-purchase due-diligence enquiries with the county, or at some later date, are questions yet to be answered.

Don Bacon

Montara, California