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AGO Opinion 97044

Constitutional Considerations When Drafting Legislation Imposing a Temporary Moratorium on Construction of Hog Confinement Facilities
Opinion 97044

DATE: August 22, 1997

SUBJECT: Constitutional Considerations When Drafting Legislation Imposing a Temporary Moratorium on Construction of Hog Confinement Facilities

REQUESTED BY: Senator Merton L. Dierks

Nebraska State Legislature

WRITTEN BY: Don Stenberg, Attorney General

Timothy J. Texel, Assistant Attorney General




You have requested the opinion of this office concerning the

authority of the State of Nebraska to impose a temporary moratorium

on the construction and permitting of hog confinement facilities

and associated waste handling systems, and constitutional issues to

be considered to avoid defects in the legislation. You

specifically asked the following two questions:




1. Does the State of Nebraska have authority under the

existing Nebraska Environmental Protection Act, the

Federal Clean Water Act, or any other provision of law,

to impose such a moratorium on permitting hog confinement

facilities or any subcategory of the same. If so, under

what conditions or justification may this be done?




2. What constitutional considerations must be considered

if the Legislature wished to impose a moratorium through

legislation and how could legislation be drafted to avoid

constitutional defects?




Authority to Impose a Moratorium




If the State of Nebraska has the authority to impose a

temporary moratorium on construction of hog confinement facilities,

the authority would derive from the Legislature's ability to

protect the public's health, safety, and welfare. The State, as a

sovereign, has an inherent right to act in order to protect the

public's vital interests, such as the health, morals, comfort, and

general welfare of the people, known as the police power. See,

e.g., Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459

U.S. 400 (1983); Home Building & Loan Ass'n v. Blaisdell, 290 U.S.

393 (1934). A temporary moratorium would be based on the state's

police power, to protect the public's health, safety, and welfare,

as well as the state's environmental resources. The Legislature's

authority would not be derived from state or federal law, including

the Nebraska Environmental Protection Act or the federal Clean

Water Act.




We are not aware of anything in the Nebraska Environmental

Protection Act or the federal Clean Water Act of 1977 which

specifically authorizes or proscribes moratoriums on livestock

confinement facilities. The Clean Water Act (an amendment to the

Federal Water Pollution Control Act of 1948) states that unless

otherwise expressly provided, nothing in the chapter precludes

states from adopting or enforcing requirements for the control or

abatement of pollution. 33 U.S.C § 1370(1). The only specified

limitation is that state standards must be no less stringent than

the federal standards. Id. The statute also states nothing in the

chapter shall be construed to impair a state's rights or

jurisdiction over the waters of that state. 33 U.S.C. § 1370(2).

We reviewed the federal regulations promulgated under the Clean

Water Act to control pollution from swine and other livestock

feedlots, located at 40 CFR, §§ 412.10 to 412.16 (1996). Our

review of these regulations did not disclose any specific

prohibition against temporary moratoriums.




It does not appear that the federal Clean Water Act or its

related regulations directly address moratoriums on livestock

confinement facilities. The issue then turns on what factors a

court would consider when reviewing a challenge to a statutory

moratorium enacted under the state's police power.




Constitutional Considerations When Reviewing Moratoriums




We point out that our review will be general in nature, since

we do not have specific legislative language before us. We will

attempt to address issues that parties challenging a moratorium are

likely to raise. Before turning to specific factors, there are

several general principles which should be mentioned.


One general principle of law is that courts view state

statutes with a presumption of validity and constitutionality.

Bridgeport Hydraulic v. Council on Water, 453 F. Supp. 942, 946

(1977), aff'd 439 U.S. 999 (1978); Sun Oil Co. of Pennsylvania v.

Goldstein, 453 F.Supp. 787, 791, aff'd 594 F.2d 859 (4th Cir.

1979); In re Application A-16642, 236 Neb. 671, 680, 463 N.W.2d

591, 599 (1990). The Nebraska Supreme Court has stated, "In every

constitutional challenge there attaches the presumption that all

acts of the Legislature are constitutional with all reasonable

doubts resolved in favor of constitutionality." Otto v. Hahn, 209

Neb. 114, 119, 306 N.W.2d 587, 591 (1981). The party challenging

the statute has the burden to show that it is in fact

unconstitutional. Sun Oil at 791; Haman v. Marsh, 237 Neb. 699,

708, 467 N.W.2d 836, 844 (1991).




The enactment of a temporary moratorium on a business activity

raises a number of potential areas which could form the bases for

constitutional challenges. Our research indicates the following

issues are often implicated when such legislation is enacted.




A. Contract Clause Issues




One potential constitutional issue which might arise if the

moratorium were challenged is the impairments of contracts under

the Contract Clause of the U.S. Constitution. This clause provides

that: "No State shall . . . pass any. . . Law impairing the

Obligation of Contracts . . . ." U.S. Const. art. I, § 10, cl. 2.

Many of the cases we found in which state moratoriums were

challenged involved contract clause claims. Whether this

constitutional provision would be implicated by the moratorium

legislation you might propose would depend on the types of hog

confinement facilities and waste handling systems the legislation

affected, whether the facilities were proposed, under construction,

or prepared to begin operations, and other similar factors.




The threshold inquiry to determine if the Contract Clause is

implicated is whether the state law will in fact create a

substantial impairment of contractual relationships. Energy

Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 411

(1983). Although the language used in the Contract Clause is

absolute, the prohibition must be accommodated to the state's

police power. Id. at 410. The severity of the impairment will

increase the level of scrutiny with which a court will review the

legislation. Id. at 411. It is not necessary that all contractual

expectations be totally destroyed in order to find a substantial

impairment, though. In determining the extent of the impairment,

a court will consider whether the industry involved has been

regulated in the past. Id. Livestock confinement facilities have

been regulated by the Nebraska Environmental Protection Act, the

regulations promulgated thereunder, and by the federal Clean Water

Act and its accompanying regulations. This fact would appear to

increase the chances that a moratorium would be upheld.




If it is determined that the legislation constitutes a

substantial impairment of contract rights, the state must show that

the legislation is based on a significant and legitimate public

purpose. Id. at 411. Thus, the inquiry is "whether the

legislation is addressed to a legitimate end and the measures taken

are reasonable and appropriate to that end." Home Building & Loan

Ass'n v. Blaisdell, 290 U.S. 398, 438 (1934). Such legitimate

public purposes could include remedying general social problems,

the state's economic interests, and the public's health, as well as

other bases. In some early cases dealing with exercises of police

powers which impaired contractual rights, such as the Blaisdell

case, the U.S. Supreme Court found that the public purpose should

address an emergency or temporary situation. The Court has since

indicated an emergency or temporary situation need not exist in

order to uphold statutes interfering with contract rights. Energy

Reserves Group at 412.




Once a legitimate public purpose is identified, a court will

determine whether the measures taken in the legislation are

reasonable and appropriate to address the public purpose involved.

Id. As previously mentioned, courts will view the statutes

involved with a presumption of constitutionality. Also, when

reviewing economic and social regulation, "courts properly defer to

legislative judgment as to the necessity and reasonableness of a

particular measure." Energy Reserves Group at 413, quoting United

States Trust Co. v. New Jersey, 431 U.S. 1, 22-23 (1977).




The outcome of a court's review of moratorium legislation

would therefore depend on the nature and seriousness of the public

purpose requiring the action, the language used to create the

legislation, and whether a moratorium is an appropriate manner in

which to address the issue. The Legislature may therefore want to

consider these factors when drafting legislation creating a

moratorium.




B. The Commerce Clause




As with Contract Clause claims, we cannot ascertain for

certain whether, or to what extent, the Commerce Clause might be

involved in any challenges to a temporary moratorium on hog

confinement facilities without reviewing specific legislation on

that topic. Many factors would have to be considered, such as the

specific restrictions placed on the facilities, precisely what

types of facilities are involved, and the extent and nature of

their operations.




When reviewing legislation to determine whether the Commerce

Clause is implicated, it must first be determined whether the

statute is facially discriminatory against interstate competitors

of the businesses involved. Sun Oil, 453 F. Supp. at 793. To

avoid this defect, the proposed legislation must apply equally to

all similarly situated businesses. If it is determined the

moratorium is not facially discriminatory, the legislation will be

reviewed using a balancing test.




Under the balancing test, any burden on interstate commerce

must be balanced against the intended local benefits to be brought

about by the legislation. The final consideration is whether there

is a less restrictive alternative available which would equally

achieve the State's intended purposes. If less restrictive means

are available, then those options must be attempted first.




The United States Supreme Court, in describing this balancing

test, stated:




Where the statute regulates evenhandedly to

effectuate a legitimate local interest, and its effects

on interstate commerce are only incidental, it will be

upheld unless the burden imposed on such commerce is

clearly excessive in relation to the putative local

benefits. If a legitimate local purpose is found, then

the question becomes one of degree. And the extent of

burden that will be tolerated will of course depend on

the nature of the local interest involved and on whether

it could be promoted as well with a lesser impact on

interstate activities.




Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).




For the legislation creating a moratorium to meet the above

test, it must first be determined whether interstate commerce is

affected. If it is, a legitimate state interest establishing the

need for a moratorium would have to be identified and articulated.

Once such a state interest is identified, it must be determined how

significant the impact of the legislation will be on interstate

commerce. The severity of the impact on interstate commerce will

then be weighed against the importance of the state's local

interest addressed by the legislation.




To avoid successful challenges based on commerce clause

issues, the Legislature should ensure that the moratorium, and the

means used to operate and enforce the moratorium, are the least

restrictive and least burdensome alternatives available which will

achieve the Legislature's objectives.




C. Due Process




Another issue to be considered when drafting moratorium

legislation is the due process rights of the affected parties.

These could take many forms, again depending on the statutory

language. These considerations may be especially relevant if hog

confinement facilities already in existence are affected, such as

being temporarily proscribed from expanding or altering the

facilities. Any facilities where construction has already begun

might also be affected.




Parties wishing hearings to determine whether their operations

constitute the type of facility controlled by the statute could

challenge the moratorium. They might allege that hearings are

required for each facility in order to determine whether it is a

hog confinement facility under the statute, and whether that

facility actually causes the type of harm the legislation is

intended to temporarily abate. Whether such challenges would have

any merit again depends on the legislative language.




In one case where such arguments were made, the court found

that such hearings were not required. In the Sun Oil case, cited

above, Maryland created a moratorium on allowing full service gas

stations (with automobile repair facilities) to convert to gas only

stations. The purpose was to ensure adequate automobile repair

facilities existed to serve motorists operating on Maryland's

roadways. Legislative action was deemed necessary due to the

number of stations converting to gas-only and eliminating their

repair shops. Although the moratorium prohibited stations from

eliminating existing repair shops, it did not prohibit closing the

station entirely, nor the building of new gas-only stations where

none had previously existing. The court found that the requested

hearings were unnecessary and unreasonable, since the provisions of

Maryland's moratorium law were sufficient to meet due process

requirements.




We note that the length of the moratorium is not a determining

factor when reviewing the legitimacy of a moratorium. "[T]he test

is whether the statute has a reasonable relation to the legitimate

State purpose. . . not its legislative life." Sun Oil at 795.




In another case involving a moratorium, a city enacted a

temporary moratorium on construction permits. In Tisei v. Town of

Ogonquit, 491 A.2d 564 (Me. 1985), the stated purpose of the

moratorium was to prevent overloading the town's public services,

to lessen the strain on the town's water supply and sewer system,

and to protect the town's soil. A committee was established to

review the town's existing ordinances while the moratorium was in

effect. In reviewing whether the moratorium was a proper exercise

of the town's police powers, the court found that a municipality

could use its police powers to withhold approval of new

construction projects for a limited time. In determining whether

the moratorium was within the town's police powers and did not

violate due process requirements, the court used a three-step

review process.




1. The object of the exercise must be to provide for

the public welfare.

2. The legislative means employed must be appropriate

to the achievement of the ends sought.

3. The manner of exercising the power must not be

unduly arbitrary or capricious.




Tisei at 569, citing to State v. Rush, 324 A.2d 748 (Me. 1974)

(emphasis in original). Although the facts in the Tisei case are

not specifically what is before us with a statewide moratorium, the

case may be analogous in that the court addressed a temporary

construction moratorium imposed so that a governmental entity could

study an issue before a more serious situation arose. The court in

Tisei overturned the summary judgment the lower court had entered

for the town. The test used by the court may provide a useful

general guide when determining what factors should be considered in

order to avoid due process violations.




D. Equal Protection




Another constitutional issue which should be considered when

drafting legislation creating a moratorium is equal protection

guarantees under the United States and Nebraska Constitutions.




When reviewing legislation challenged on equal protection

grounds, it is clear that unless a legislative classification

involves a fundamental personal right or inherently suspect class,

such as race, alienage, or national origin, "courts will ask only

whether a rational relationship exists between a legitimate state

interest and the statutory means selected by the legislature to

accomplish that end." State v. Garber, 249 Neb. 648, 653, 545

N.W.2d 75, 79 (1996). See also Cleburne v. Cleburne Living Center,

Inc., 473 U.S. 432, 440 (1985); New Orleans v. Dukes, 427 U.S. 297,

303, (1976); State ex rel. Spire v. Northwestern Bell Tel. Co., 233

Neb. 262, 445 N.W.2d 284 (1989). The Nebraska Constitution has

identical requirements. Neb. Const. art. III, § 18; Robotham v.

State, 241 Neb. 379, 385, 488 N.W.2d 533, 539 (1992). Equal

protection challenges brought under article III, § 18 of the

Nebraska Constitution would likewise be tested for a rational basis

unless a suspect classification was involved. Robotham at 385, 488

N.W.2d at 539; Haman at 712, 467 N.W.2d at 846 (1991). If a

rational relationship to a legitimate state interest is found to

exist, a court will uphold the legislation. Garber at 653, 545

N.W.2d at 79. The rational basis test for equal protection is

violated "only if the classification rests on grounds wholly

irrelevant to the achievement of the State's objective." Garber at

654, 545 N.W.2d at 79, quoting McGowan v. Maryland, 366 U.S. 420,

425 (1961).




In order to evaluate equal protection claims, a court may use

a three-step analysis: 1) whether the law creates classifications,

2) if classifications are created, whether the law embodies a

legitimate state interest, and 3) whether the classifications are

rationally related to that legitimate state interest. Sun Oil at

796. So long as fundamental rights and suspect distinctions are

not involved, a court will examine these factors only for

constitutionality--not on the wisdom, necessity, or strength of

scientific support for the Legislature's policy decisions. New

Orleans at 303, 96 S.Ct. at 2517; Garber at 654, 545 N.W.2d at 79;

Otto at 119, 306 N.W.2d at 591. The Nebraska Supreme Court has

stated that under the rational basis standard, a legislature is not

required to adopt the best solution, only a solution which has a

rational relationship to the state's interest. Garber at 654, 545

N.W.2d at 79. When the legislation deals with economics and social

welfare, equal protection is not violated merely because the

classifications are imperfect or when in practice it results in

some inequality. Otto at 118, 306 N.W.2d at 591, citing Dandridge

v. Williams, 397 U.S. 471 (1970).




Conclusion




The potential for constitutional and other legal issues which

might arise from a temporary moratorium on hog confinement

facilities are as varied as the possibilities for the language

which would create the legislation. However, certain general

issues are often involved in judicial reviews of moratoriums. One

primary factor in a review of the constitutionality of any such

legislation would likely deal with whether it addresses a

legitimate state interest. It is therefore important to identify

and articulate the State's interest and purpose justifying the

legislation.




Another principle to consider is that legislation enacted

pursuant to the state's police powers must have a real and

substantial relation to a legitimate state purpose, and the means

of enforcement must be reasonable. When exercising police powers,

"the legislature has broad and flexible authority, particularly in

the areas of public health and safety." Bridgeport Hydraulic at

946. Whether a court would uphold a temporary moratorium on hog

confinement facilities depends on such factors as the legitimate

state interest involved, the particular statutory language creating

the moratorium, the declared purpose for the moratorium, and how

the moratorium is to operate and be enforced. A court would

consider these factors and decide whether a moratorium was a

reasonable method to address the state's interests.




Because current Nebraska statutes and regulations control hog

confinement facilities, it would be helpful if the Legislature

distinguished why current statutes and regulations are inadequate,

or why they are adequate for current facilities, but not for the

new types of proposed facilities and waste handling systems. A

distinction explaining how the new facilities differ and the public

and/or environment would not be adequately protected by the current

controls would assist a court reviewing these issues.




Although the foregoing discussion addresses several issues

which have been raised by parties challenging statutory

moratoriums, it is probably not a complete list of all bases upon

which a moratorium might be challenged. We hope this brief

analysis of these complex issues is of assistance when drafting

legislation on this topic.




Sincerely,




DON STENBERG

Attorney General




Timothy J. Texel

Assistant Attorney General