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Western Petroleum, LLC v. Williams County Board of Commissioners

Supreme Court of North Dakota

December 20, 2016

Western Petroleum, LLC and Maxum Petroleum Operating Company, Inc., d/b/a Pilot Logistics Services, Appellants
v.
Williams County Board of Commissioners, Appellee

         Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Joshua B. Rustad, Judge.

         REVERSED AND REMANDED.

          Christopher P. Parrington, for appellants.

          Randall J. Bakke (argued) and Shawn A. Grinolds (appeared), for appellee.

          Crothers, Justice.

         [¶ 1] Western Petroleum, LLC, and Maxum Petroleum Operating Company, Inc., doing business as Pilot Logistics Services, appeal from a district court order affirming their appeal of the Williams County Board of County Commissioners' decision to penalize Pilot for violating the county's temporary housing regulations. We reverse and remand because the Board unreasonably interpreted the regulations.

         I

         [¶ 2] In September 2011 the Williams County Board of County Commissioners adopted temporary housing regulations relating to the use of "man camps" or "crew housing facilities" in the county. The use of temporary housing on property within the county is prohibited without a conditional use permit. The civil penalty for violating the temporary housing regulations is $1, 000 per violation. The regulations state a separate violation is committed each day a violation is committed.

         [¶ 3] In September 2011 the Board granted Western Petroleum a conditional use permit for temporary housing units on its property. The permit allowed Western Petroleum to use up to 40 RVs for one year and up to seven mobile homes for two years. Pilot Logistics acquired Western Petroleum and its property in February 2012. Western Petroleum did not transfer the permit to Pilot, nor did Pilot renew the RV permit when it expired in September 2012 and for the mobile homes in September 2013.

         [¶ 4] In 2014 the Board became aware that Pilot continued to use the property for temporary housing after Western Petroleum's permit expired. Pilot was out of compliance on 40 RVs since September 6, 2012, and on seven mobile home units since September 6, 2013. Pilot also had two two-story framed houses on the property that were not permitted under Western Petroleum's conditional use permit.

         [¶ 5] At its July 8, 2014, meeting the Board assessed a $29, 635, 000 penalty against Pilot for violating the temporary housing regulations during the period of noncompliance until June 10, 2014. The Board calculated the penalty by treating each non-permitted use as a violation subject to a $1, 000 penalty per day. The Board calculated the $1, 000 penalty on a per housing unit, per day basis. From September 6, 2013, to June 10, 2014, the Board found Pilot committed 49 violations each day subject to the $1, 000 penalty for having 40 RVs, seven mobile homes and two two-story framed houses on the property.

         [¶ 6] The Board also offered Pilot a reduced penalty of $1, 885, 000 if paid within 10 days. Pilot did not pay the reduced penalty and the Board imposed the full penalty of $29, 635, 000. The district court affirmed the Board's decision, concluding the penalty against Pilot was supported by the evidence and was not an unreasonable interpretation of the temporary housing regulations.

         II

         [¶ 7] Pilot argues the Board acted in an arbitrary, capricious and unreasonable by penalizing Pilot $29, 635, 000 for violating Williams ...


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