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Rise Gold’s Constitutional takings prospects - Dead on Arrival - CEA Foundation

Read the opinion and legal analysis. CEA Foundation's attorneys weighed in on the Rise Gold's threat of legal action against Nevada County just before they unanimously denied approval of the Idaho-Maryland Mine project.


"The County's decision to deny the [Vested Rights] Petition was sound and a court is unlikely to overturn it," said Ellison Folk, Attorney for Shute, Mihaly & Weinberger LLP. "No matter what sort of takings claim Rise tries to assert, it will be dead on arrival in court."


Below is the full text of an opinion piece by CEA Foundation President, Ralph Silberstein followed by the legal analysis. The opinion piece was originally published in The Union on February 13, 2024... three days before the Nevada County Supervisors voted 5-0 to reject the project and not certify the Environmental Impact Report.


 

Ralph Silberstein: Rise Gold’s Constitutional takings prospects - Dead on Arrival

February 13, 2024

Ralph Silberstein, President CEA Foundation


After receiving a unanimous rejection of the Idaho-Maryland Mine project from the Planning Commission, Rise Gold resorted to claims of bias and unfair handling, which gained little traction, followed by an unsuccessful effort to circumvent permitting with a Petition for Vested Rights to the Board of Supervisors.


Subsequently, at the vested rights hearing and afterwards, Rise has made repeated accusations of “takings” and unfair treatment under the Constitution, threatening legal actions in federal court if the Board denies their project. Since both the Planning Commission and the Planning Staff Report have now recommended denying the project and not certifying the Environmental Impact Report (EIR), it seems likely that the Board will follow suit at the final hearing on February 15,16.


In that eventuality, the question arises: how realistic is it that Rise could prevail in a legal challenge?


We look to an assessment of Rise’s potential legal actions, written by the law firm of Shute, Mihaly & Weinberger, LLP, and summarized here, to consider the likelihood of such a prospect.


Regarding Rise’s vested rights petition, it is doubtful that State court — where the challenge must begin — would second-guess the Board’s fact-bound, thorough, and impartial decision to deny Rise’s petition. The petition contained major flaws and the mine has been abandoned since the 1950s. The burden would fall on Rise to overcome the “presumption of correctness” of the County’s findings and convince the court that the County’s “decision is contrary to the weight of the evidence.”


Rise has also accused the County of bias, thus depriving Rise of due process. The bias argument has no merit. The County’s staff reports and related materials explained in scrupulous detail the legal principles and factual context necessary to make a determination on Rise’s petition. This included a point-by-point analysis, supported with numerous factual exhibits, addressing the many misleading or simply incorrect statements in the petition. That the County’s analysis reached different legal and factual conclusions than Rise does not mean County staff were biased: it means they did their jobs.


And in terms of “takings,” state and federal law are unambiguous that the County’s denial of the project would not amount to a taking. Rise has only two options for demonstrating that the County’s actions would constitute an unconstitutional taking. First, they would have to prove that the County’s denial of the project deprived Rise of all economically viable use of its property. But the properties owned by Rise have multiple other permissible uses that are consistent with existing zoning, including light industrial use, rendering that argument moot.


Secondly, Rise could attempt to argue a takings under the multi-factor test set forth in Penn Central Transportation Co. v. City of New York, but would be hard pressed to satisfy that test, which sets an extremely high threshold for a takings claim.


In short, no matter what sort of “takings” claim Rise tries to assert, it would likely be dead on arrival. (Scroll down to see the full text of the analysis by Shute, Mihaly, & Weinberger, Legal Considerations Surrounding Idaho-Maryland Mine Permitting Decisions.)


So why would Rise file a legal challenge to the Board decisions, anyway? One possibility is that, having perpetrated a false narrative about the high quality of their EIR and the project’s benefits, Rise’s leaders may now believe their own falsehoods. Another possibility is that they have succumbed to incompetent legal counsel regarding vested rights and takings case law. A third and more cynical explanation for Rise filing suit is that they know they are on the losing side but imagine that launching a legal challenge in federal court would be so prolonged and costly that the County would seek a settlement agreement to end the fiscal drain on County resources. Or it could be all three reasons.


Regardless of motivations, a legal challenge would likely be another big mistake for Rise because the Board, a huge coalition of environmental groups, and most of this community have already proven that they do not easily cave in to shoddy projects, marketing spin or threats. Furthermore, it’s one thing for one to lose one’s own money in a gamble or bluff, but another thing entirely to squander the capital of investors and bleed out shareholders’ equity on meritless lawsuits.


Rise still owns 119 acres in Grass Valley. If faced with a no vote on their project, they should do the responsible thing and stay away from baseless legal challenges, consider the will of the community, sell the land, and move on.


Ralph Silberstein, President CEA Foundation


 

Legal Considerations Surrounding Idaho-Maryland Mine Permitting Decisions


Full text:



February 7, 2024

Via Electronic Mail Only


Board of Supervisors

Nevada County

950 Maidu Avenue

Nevada City, California 95959


Re:     Board’s Consideration of the Idaho-Maryland Mine Project

Dear Board Members:


On behalf of the Community Environmental Advocates (“CEA”) Foundation, we write regarding the County’s ongoing consideration of Rise Grass Valley, Inc.’s (“Rise’s”) proposed Idaho-Maryland Mine Project (“Project”). On December 14, 2023, the Board unanimously voted to deny Rise’s Idaho-Maryland Mine Vested Rights Petition (“Petition”), concluding that Rise does not hold a vested right to mine on the Project site. Previously, the County’s Planning Commission had unanimously recommended (1) to deny Rise’s applications for a rezone and a variance, each of which is necessary to develop the Project; and (2) to decline to certify the Final Environmental Impact Report (“EIR”) prepared for the Project. The Board will consider those recommendations at a public hearing on February 15, 2024.


We commend the County for reaching the correct decisions to date regarding the Petition and the Project entitlements. On behalf of CEA Foundation, we urge the Board to adopt the Planning Commission’s recommendations, which are well-reasoned and were delivered only after a thorough process that afforded Rise and the public ample opportunity to be heard. We also write in response to threats that Rise will challenge these decisions in court.[1]


As set forth in this letter, any claims that Rise could bring against the County in connection with the Project are unlikely to succeed. In particular, it is doubtful that a court would second guess the Board’s fact-bound, thorough, and impartial decision to deny the Petition. Additionally, Rise would have no viable claim that the County has taken its property without just compensation in violation of the state or federal constitutions. In short, the County should not be swayed by Rise’s empty threats of litigation. The Board should adopt the recommendations of the Planning Commission and County staff[2] to deny certain Project entitlements, decline to certify the EIR, and put an end to Rise’s misguided Project once and for all.


I. The County’s decision to deny the Petition was sound and a court is unlikely to overturn it.


At the outset, it is important to emphasize that if Rise wishes to challenge the County’s vested rights decision, it must pursue that claim in state court. Longstanding precedent from the U.S. Court of Appeals for the Ninth Circuit is unequivocal on this point. In Eilrich v. Remas (9th Cir. 1988) 839 F.2d 630, 632-33, the plaintiff attempted to bring a claim against his former city employer in federal court under 42 U.S.C. § 1983, arguing that his discharge violated his First Amendment rights. The Ninth Circuit held that the claim could not move forward, as a city administrative body had already rejected that exact argument in an adjudicatory proceeding and the plaintiff did not challenge the city’s decision in state court. Id.; see also Miller v. County of Santa Cruz (9th Cir. 1994) 39 F.3d 1030, 1037-38 (reaffirming Eilrich). Thus, Rise could only contest the County’s denial of its Petition by seeking a writ of administrative mandamus in state court. See Cal. Code Civ. Proc. §§ 1094.5, 1094.6; Eilrich, 839 F.2d at 633; Miller, 39 F.3d at 1038.     


Any court reviewing Rise’s claims must afford the County’s findings a “strong presumption of correctness.” Fukuda v. City of Angels (1999) 20 Cal.4th 805, 817. The burden would fall on Rise, as the challenger, to overcome that presumption and “convince the [trial] court” that the County’s “decision is contrary to the weight of the evidence.” Id.


Rise cannot possibly carry that burden. As the County explained at length at the hearing and in its written materials, there is ample evidence that any vested right to mine that may have once existed has long been abandoned. By comparison, and as the County also pointed out, there is virtually no evidence indicating that previous owners of the Project sites continuously intended to resume mining operations during the seven decades when the mine sat unused. The quality and the volume of the evidence that the County relied upon exceeds that in cases where courts have affirmed findings of abandonment. See, e.g., Hardesty v. State Mining & Geology Bd. (2017) 219 Cal.Rptr.3d 28 (unpublished); Stokes v. Bd. of Permit Appeals (1997) 52 Cal.App.4th 1348. Indeed, had the County found that any vested right was not abandoned in spite of the clear historical record, a court likely would have overturned that decision. See Keep the Code, Inc. v. County of Mendocino (2018) A147544, 2018 WL 6259477 (unpublished)[3] (overturning county’s determination that company had vested right to mine aggregate; included as Attachment A).


Taking a different tack, Rise has also vaguely alleged that the Board was biased when it unanimously voted to deny the Petition, and thus Rise was deprived of procedural due process.[4] Rise has tried this exact strategy before.[5] Its allegations of bias are no more compelling now than they were the last time Rise raised them. The County’s staff reports and related materials explained in scrupulous detail the legal principles and factual context necessary to resolve Rise’s Petition.[6] This included a point-by-point analysis, supported with numerous factual exhibits, addressing the many misleading or simply incorrect statements in the Petition.[7] That these materials happened to reach different legal and factual conclusions than Rise and its counsel does not mean County staff were biased; it means they did their jobs.


As for the Board itself, it is blackletter law that a decisionmaker is not biased simply because they have some attenuated connection with a group that takes a stance on the project at issue. See Petrovich Dev. Co., LLC v. City of Sacramento (2020) 48 Cal.App.5th 963, 971, 974 (holding a councilmember’s active membership in a neighborhood association opposed to a project on which the councilmember voted “did not establish bias” in and of itself); see also Cohan v. City of Thousand Oaks (1994) 30 Cal.App.4th 547, 559 (“[A] councilperson has a right to state views or concerns on matters of community policy without having his voted impeached.”). Rise’s complaints of bias were meritless when they were levied against the Planning Commission eight months ago, and those same repurposed allegations remain meritless today.


The overall process that the County afforded Rise in connection with the Petition more than satisfied the requirements of state and federal law. Rise was able to present hundreds of pages of legal analysis and factual evidence to the Board. County staff considered those materials and disclosed their own thorough conclusions well in advance of a duly noticed public hearing. Then, over the course of that multi-day hearing, Rise and its counsel were able to present their case, rebut the conclusions of County staff, and address the Board’s questions. And the specific basis on which the Board denied the Petition—abandonment—was addressed extensively in the written materials and at the hearing itself. Rise was entitled to nothing more. See Calvert v. County of Yuba (2006) 145 Cal.App.4th 613, 627 (indicating procedural due process requirements are satisfied in the vested rights context where interested entities receive “reasonable notice and an opportunity to be heard in an evidentiary public adjudicatory hearing before the vested rights claim is determined”); see also Eilrich, 839 F.2d at 633-35 (indicating that where a state administrative proceeding has these basic characteristics, a federal court must give its decisions preclusive effect).


In sum, Rise received all the process that it was due. That process resulted in the Board reaching a decision that was not just well-reasoned, but was the only legally defensible conclusion available. A court would not second guess the County’s sound determination regarding the Petition.


II. Rise would not have a viable takings claim against the County.


Rise has repeatedly asserted that if the County denies the Project, the County will have committed an uncompensated “taking” of Rise’s property in violation of the state and federal constitutions.[8] This is flatly incorrect. State and federal law are unambiguous that the County’s denial of the Project would not amount to a taking.[9] 


Here, Rise has only two options for demonstrating that the County committed an unconstitutional taking. First, Rise could attempt to prove that the County’s denial of the Project deprived it of all economically viable use of its property. See Lucas v. South Carolina Coastal Council (1992) 506 U.S. 1003, 1019. This is not a test that Rise could ever hope to pass. The parcels making up the Project site have multiple other permissible uses that are fully consistent with their existing zoning designations. Indeed, the EIR for the Project expressly acknowledges this. See Draft EIR pp. 6-11 through 6-13 (explaining how the Brunswick Industrial Site as currently zoned could be developed with over half a million square feet of new office, business, and/or industrial uses). This is more than sufficient to defeat a Lucas claim. See Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1267 (“[I]f permissible uses exist, a development restriction does not deny a property holder [all] economically viable use of his property.”).


Rise’s only alternative would be to argue that the denial of the Project amounts to a taking under the multi-factor test set forth in Penn Central Transportation Co. v. City of New York (1978) 438 U.S. 104. See 438 U.S. at 124 (listing the relevant factors as (1) the economic impact of the government’s action, (2) the extent to which the action interfered with “investment-backed expectations,” and (3) the character of the action). But for much the same reason that Rise cannot bring a successful Lucas claim, it will not prevail under the Penn Central test, either.


Courts applying the Penn Central framework have repeatedly emphasized that a government action must deprive a property of virtually all economic value to amount to a taking. Colony Cove Properties, LLC v. City of Carson (9th Cir. 2018) 888 F.3d 445, 451 (emphasizing that even “diminution in property value because of governmental regulation ranging from 75% to 92.5% does not constitute a taking”). Again, that simply would not be the effect of the County’s denial of the Project, given the many other permissible uses of the property. Additionally, Rise would have no “reasonable investment-backed expectation” in any additional economic value it hopes to attains from operating the reopened mine. Allegretti & Co. v. County of Imperial (2006) 138 Cal.App.4th 1261, 1279 (holding a “claim of loss of anticipated profits or gain is not compensable, as it demonstrate[s] no more than a possible restriction upon more economic uses of its property.” (citation omitted)). In short, no matter what sort of takings claim Rise tries to assert, it will be dead on arrival in court.


III.  The Board should follow the recommendations of the Planning Commission.


Any legal challenge that Rise could bring against the County is highly unlikely to succeed. However, the County would violate CEQA and State Planning and Zoning law if  the Board were to reverse the recommendations of the Planning Commission and County staff by certifying the EIR and granting the Project all necessary approvals. The recommendations to deny the re-zone and the variance are clearly correct on the merits, for the reasons that the Commission, staff, and general public have explained.


Just as importantly, though, the EIR prepared for the Project is grossly inadequate. As we have discussed at length in previous letters to the County,[10] the EIR suffers from numerous fatal defects, ranging from an improper project description and environmental baseline, to a flawed analysis of Project alternatives, to inadequate analysis and mitigation of impacts to groundwater, air quality, energy, and climate change. The County cannot approve the Project unless it corrects the flaws in the EIR.  

————

Again, we applaud the County for its careful consideration of the Project. The Board, Planning Commission, and County staff have repeatedly reached the correct decisions by faithfully applying the law and the facts and by resisting misleading and irrelevant claims. The Board should continue that practice by voting to deny the Project and decline to certify its EIR.


Very truly yours,

SHUTE, MIHALY & WEINBERGER LLP

  

Ellison Folk

Ryan Gallagher


Attachments:


A.      Keep the Code, Inc. v. County of Mendocino (2018) A147544, 2018 WL 6259477

  

cc:     Julie Patterson Hunter, Clerk of the Board, clerkofboard@nevadacountyca.gov

          Katharine Elliott, County Counsel, county.counsel@nevadacountyca.gov

          Matt Kelley, Senior Planner, matt.kelley@co.nevada.ca.us

Laurie Oberholtzer, CEA Foundation

Ralph Silberstein, CEA Foundation

1740001.4


[1] See Rise Gold Corp., Rise Gold Reports Result of Vested Rights Hearing 2 (Dec. 14, 2023), https://www.risegoldcorp.com/uploads/news_item/article/ARTICLE_126.pdf (quoting Rise Gold CEO Joe Mullin, who stated after the Board’s decision to deny the Petition that he “look[ed] forward to having our rights vindicated by the courts”); id. at 1-2 (implying the Board’s denial of the Petition was procedurally and substantively improper and suggesting that it would amount to an unconstitutional taking were the County to deny both the Petition and all necessary Project approvals).


[2] See Brian Foss, Board Agenda Memorandum 2-3 (Feb. 2, 2024), https://www.nevadacountyca.gov/DocumentCenter/View/52237/Board-of-Supervisor-Staff-Report-.


[3] Although the Hardesty and Keep the Code decisions are not published, they provide helpful guidance regarding how a court is likely to approach similar issues and facts.


[4] See id. at 1-2 (alleging the Board relied on a “biased” staff report and implying the Board was not an “impartial tribunal” when it considered the Petition).


[5] See Letter from Ben Mossman, President, Rise Grass Valley Inc., to Nevada County Board of Supervisors (June 1, 2023) (claiming Planning Commission was biased when it issued its unanimous recommendations regarding the Project entitlements and FEIR); see also Letter from Ellison Folk, Shute, Mihaly & Weinberger LLP, to Nevada County Board of Supervisors (June 27, 2023) (addressing Rise’s previous allegations of bias).


[6] Katharine L. Elliott & Diane G. Kindermann, Nevada County Board of Supervisors Board Agenda Memorandum (Nov. 28, 2023), https://www.nevadacountyca.gov/DocumentCenter/View/51714/2-Staff-Report; Katharine L. Elliott et al., Nevada County Board of Supervisors Board Agenda Memo (Dec. 13, 2023), https://www.nevadacountyca.gov/DocumentCenter/View/51825/Rise-Grass-Valley-Vested-Rights-Petition-Supplemental-Staff-Report-.


[7] Katharine L. Elliott & Diane G. Kindermann, County’s Responses to Petitioner’s Facts and Evidence in the Vested Rights Petition (Including County’s Exhibits 1001-1027) (Nov. 28, 2023), https://www.nevadacountyca.gov/DocumentCenter/View/51712/4-Nevada-County-Responses-to-Facts-and-Evidence-in-the-Vested-Rights-Petition-w--County-exhibits.


[8] See, e.g., Rise Gold Corp., supra note 1, at 2; Letter from G. Braiden Chadwick, Mitchell Chadwick LLP to Nevada County Planning Commission, at 4 (May 5, 2023).


[9] As relevant here, state courts have interpreted the takings clause in the California constitution “congruently” with the federal takings clause. California Building Industry Assn. v. City of San Jose (2015) 61 Cal.4th 435, 456 n.10.


[10] See Letter from Ellison Folk, Shute, Mihaly & Weinberger LLP to Matt Kelley, Senior Planner, Nevada County (Mar. 20, 2023); Letter from Ellison Folk, Shute, Mihaly & Weinberger LLP to Matt Kelley, Senior Planner, Nevada County (Mar. 30, 2022); Letter from CEA Foundation to Matt Kelley, Senior Planner, Nevada County (Mar. 30, 2022).


 

Download the brief and attachment.

CEA Foundation Letter re Rise Matter.sec
.pdf
Download PDF • 321KB

Att. A - Keep the Code Inc. v. County of Mendocino
.pdf
Download PDF • 205KB

 

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