Hansen Brothers Enterprises, Inc. v. Board of Supervisors

In Hansen Brothers Enterprises, Inc. v. Board of Supervisors (1996) 12 Cal.4th 533, a case addressing whether the "'diminishing asset' doctrine is applicable to a mining operation which is carried on as a legal nonconforming use under a zoning ordinance that presently excludes mining from the permissible uses of the property," the court quoted In re Kelso (1905) 147 Cal. 609 and noted, "While mining is the all-encompassing term, extracting hard rock is commonly referred to in the industry as 'quarrying.' " (Hansen, supra, at p. 544 & fn. 7.) Plaintiff operated an aggregate production business that its predecessors had operated in 1954 when Nevada County adopted a zoning ordinance that prohibited mining. (Hansen Brothers, supra, 12 Cal.4th at pp. 540, 542, 561.) Because the mine was operated prior to the enactment of Surface Mining and Reclamation Act (SMARA), the permit requirement of Public Resources Code section 2776 did not apply, but the requirement of a reclamation plan did. (Hansen Brothers, supra, at p. 547.) Hansen Brothers, claiming a vested right to mine the entire 60-plus acre area, submitted a reclamation plan for that area. The Planning Commission found that the vested nonconforming use status had been lost through discontinuance and that the proposed excavation would be a prohibited intensification of the nonconforming use. (Id. at p. 548.) Although the Board of Supervisors, the trial court, and the appellate court agreed, the Supreme Court reversed and remanded for a determination of the scope of the vested right under the diminishing asset doctrine. (Id. at p. 576.) The court concluded Hansen Brothers could claim a vested right to continue the nonconforming use conducted by its predecessors in 1964. (Id. at p. 542.) The court noted, "The use of the land, not its ownership, at the time the use becomes nonconforming determines the right to continue the use. Transfer of title does not affect the right to continue a lawful nonconforming use which runs with the land. " (Id. at p. 541, fn. 1.) The court reviewed the various parcels at issue to determine whether the present owner had a vested right and determined the evidence established a vested right only as to two parcels. (Hansen Brothers, supra, 12 Cal.4th at p. 564.) This conclusion, however, did not preclude a new hearing "at which evidence may be presented on whether the previous owners of the 2 remaining parcels had vested mining rights on those parcels at the time they were conveyed to Hansen Brothers." (Hansen Brothers, supra, at p. 565, fn. 23.) Under Hansen Brothers, a mine operator may assert a vested right based on the conduct of a predecessor. The California Supreme Court considered whether "this extension is a prohibited expansion of a nonconforming use into another area of the property." (Ibid.) The Supreme Court concluded the answer was no. It found the diminishing asset doctrine, "an exception to the rule banning expansion of a nonconforming use that is specific to mining enterprises," applied in California. (Hansen Brothers, supra, 12 Cal.4th at pp. 553, 559.) Under the diminishing asset doctrine, "when there is objective evidence of the owner's intent to expand a mining operation, and that intent existed at the time of the zoning change, the use may expand into the contemplated area." (Hansen Brothers, supra, at p. 553.) The diminishing asset doctrine recognizes that mining anticipates expansion into areas not previously used. "'The very nature and use of an extractive business contemplates the continuance of such use of the entire parcel of land as a whole, without limitation or restriction to the immediate area excavated at the time the ordinance was passed. A mineral extractive operation is susceptible of use and has value only in the place where the resources are found, and once the minerals are extracted it cannot again be used for that purpose. "Quarry property is generally a one-use property. The rock must be quarried at the site where it exists, or not at all. An absolute prohibition, therefore, practically amounts to a taking of the property since it denies the owner the right to engage in the only business for which the land is fitted." An entire tract is generally regarded as within the exemption of an existing nonconforming use, although the entire tract is not so used at the time of the passage or effective date of the zoning law.' " (Hansen Brothers, supra, 12 Cal.4th at pp. 553-554.) The California Supreme Court observed: "Zoning ordinances and other land-use regulations customarily exempt existing uses to avoid questions as to the constitutionality of their application to those uses. 'The rights of users of property as those rights existed at the time of the adoption of a zoning ordinance are well recognized and have always been protected.' Accordingly, a provision which exempts existing nonconforming uses 'is ordinarily included in zoning ordinances because of the hardship and doubtful constitutionality of compelling the immediate discontinuance of nonconforming uses.' " ( Id. at p. 552.) In Hansen Brothers Enterprises, Inc. v. Board of Supervisors, supra, 12 Cal. 4th 533, noting the county was not without remedies if the nonconforming mining use increased to a level the county believed excessive, the Supreme Court stated: "As with any other nonconforming use, the county may seek an injunction or other penalties authorized by the zoning ordinance, whenever it believes that production at the mine has reached a level that constitutes an impermissible intensification of the nonconforming use for which plaintiff has a vested right." ( Id. at p. 575.) In Hansen Brothers Enterprises, Inc. v. Board of Supervisors (1996) 12 Cal.4th 533, the Supreme Court found the diminishing asset doctrine, "an exception to the rule banning expansion of a nonconforming use that is specific to mining enterprises," applied in California. (Hansen Brothers, supra, 12 Cal.4th at pp. 553, 559.) Under the diminishing asset doctrine, "when there is objective evidence of the owner's intent to expand a mining operation, and that intent existed at the time of the zoning change, the use may expand into the contemplated area." (Hansen Brothers, supra, at p. 553.) The diminishing asset doctrine recognizes that mining anticipates expansion into areas not previously used. "'The very nature and use of an extractive business contemplates the continuance of such use of the entire parcel of land as a whole, without limitation or restriction to the immediate area excavated at the time the ordinance was passed. A mineral extractive operation is susceptible of use and has value only in the place where the resources are found, and once the minerals are extracted it cannot again be used for that purpose. "Quarry property is generally a one-use property. The rock must be quarried at the site where it exists, or not at all. An absolute prohibition, therefore, practically amounts to a taking of the property since it denies the owner the right to engage in the only business for which the land is fitted." An entire tract is generally regarded as within the exemption of an existing nonconforming use, although the entire tract is not so used at the time of the passage or effective date of the zoning law.' " (Hansen Brothers, supra, 12 Cal.4th at pp. 553-554.) The Supreme Court discussed the tension between local zoning ordinances and constitutional taking clauses: "A zoning ordinance or land-use regulation which operates prospectively, and denies the owner the opportunity to exploit an interest in the property that the owner believed would be available for future development, or diminishes the value of the property, is not invalid and does not bring about a compensable taking unless all beneficial use of the property is denied. However, if the law effects an unreasonable, oppressive, or unwarranted interference with an existing use, or a planned use for which a substantial investment in development costs has been made, the ordinance may be invalid as applied to that property unless compensation is paid. Zoning ordinances and other land-use regulations customarily exempt existing uses to avoid questions as to the constitutionality of their application to those uses. 'The rights of users of property as those rights existed at the time of the adoption of a zoning ordinance are well recognized and have always been protected.' " (Hansen, supra, 12 Cal.4th at pp. 551-552.)