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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

House Bill 72, The Anti-Neighbor Zoning Appeal Bond Bill, Moved To Senate State Government Committee.  Posted: February 24, 2017

HOUSE BILL 72 WOULD IMPOSE AN UNCONSTITUTIONAL FINANCIAL BARRIER TO ACCESS TO THE COURT OF APPEALS FOR REVIEW OF ZONING DECISIONS

Pending before the Senate State and Local Government Committee is House Bill 72, a punitive bill that would require an appeal bond to be posted if a neighborhood association, or other person affected by a rezoning decision, appealed a rezoning decision from Circuit Court to the Kentucky Court of Appeals.

The bill is a blatantly unconstitutional slap in the face of neighbors and neighborhood groups, and is a “solution in search of a problem,” since the Court of Appeals already has the ability under Civil Rule 73.02(4) to assess damages and 1 to 2 times costs if it determines a zoning appeal (or any other appeal) to have been brought that was frivolous and in bad faith.

The bill as amended in the Kentucky House of Representatives, makes clear that the intent is to deter even meritorious appeals of rezoning decisions by pricing them out of the reach of most neighborhood groups and neighbors.

How would it work? Under the bill, on filing a Notice of Appeal, on request the Circuit Court would have to hold a hearing on whether the appeal was “presumptively frivolous” – a term not fully defined. If the Circuit Court deemed the appeal “presumptively frivolous,” a bond would be required to cover lost profits, lost cash flow, interest, costs, and attorney fees, up to $250,000.

Yet even if the Circuit Court found the appeal to be non-frivolous, a mandatory bond for all interest, costs, and attorney fees would be required to be posted as a condition of appeal, up to $100,000.

In essence, the bill would require a Judge who had just ruled against a party in a zoning case, to decide whether an appeal by that party of that Judge’s decision would be frivolous, before even the ground of the appeal were disclosed.

The appeal bond would be forfeited if the Court of Appeals affirmed the circuit court decision, even if the appeal raised arguments that had merit.

An example might help demonstrate the harm that this bill would cause. All parties to zoning cases now take for granted the ability of any person participating in a zoning case to cross-examine any witness supporting or opposing a rezoning. Yet prior to the 1982 case of Kaelin v. City of Louisville, that right was not established. In Kaelin, the planning commission refused to allow Thomas Kaelin and other neighbors to ask questions of the developer seeking a zone change and its witnesses, and the Circuit Court and the Court of Appeals upheld the approval of the zoning change by the city council over the objections of the Kaelin that they had been denied due process. It was the Kentucky Supreme Court that reversed both the Circuit Court and Court of Appeals, and established that due process required that questioning of witnesses be allowed. It is quite possible under the vague standard of “presumptively frivolous” in HB 72 that Kaelin could have been subjected to a requirement to post up to a $250,000 bond, or even $100,000 if the Circuit Judge deemed that his appeal had merit.

Requiring the filing of an appeal bond as a prerequisite to filing an appeal is a clear violation of Kentucky Constitution Section 115, providing that in all cases there shall be allowed as a matter of right at least one appeal to another court. Imposing a financial barrier to an of-right appeal is absolutely impermissible.

Additionally, governmental bodies are exempt from the bond requirement, raising equal protection issues. The bill also intrudes on the Courts, who under Kentucky’s constitution matters of appellate procedure that are expressly reserved to the judicial branch under the state constitution.

For those rare instances in which a zoning appeal is deemed “frivolous” or in “bad faith,” remedies already exist. Punishing neighbors and neighborhood groups for trying to prevent disruptive changes in the neighborhoods where they have sunk their savings and invested their hopes, by imposing financial barriers to appeals in zoning and conditional use permit cases, is bad policy and worse law.

This bill is a developer’s dream and a neighbor’s nightmare, and should be rejected by the Senate State and Local Government Committee and the full Kentucky Senate.

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