Supreme Court Sides with Flathead County in Doughnut Lawsuit

Court issues new ruling in years-long lawsuit over land use and regulation

By Beacon Staff

The Montana Supreme Court has sided with Flathead County in the long-ranging dispute between the county and Whitefish about land use and planning in the area around the city, known as the doughnut.

Last July, Flathead County District Court Judge David Ortley granted summary judgment to the county, which the city disputed and appealed to the Supreme Court.

The lawsuit has been ongoing for years, beginning after the Flathead County Commission voted in 2008 to rescind a 2005 interlocal agreement with Whitefish over jurisdiction of the doughnut.

Whitefish sued in response to the rescindment and the issue has been tied up in litigation ever since. The city and county tried to resolve the issue outside of court, which produced the 2010 interlocal agreement that is a central issue in the lawsuit.

In November 2011, Whitefish city voters repealed the 2010 interlocal agreement through a referendum vote, after which four residents filed a lawsuit asking Ortley to declare the referendum illegal and void, arguing that it was an administrative, rather than legislative, act.

The city of Whitefish and four interveners, however, argued the referendum was legal and valid, and that the county and Whitefish should revert back to the original 2005 agreement.

Ortley ruled that the referendum was invalid, and that the 2010 agreement was in effect. His decision was appealed to the Montana Supreme Court, which ruled 4-3 in favor of the county on Monday.

According to the court’s synopsis of the opinion: “The Court determined that the City’s decision to enter into the new agreement was a predominately administrative act not subject to referendum. The Court noted that, in particular, the new agreement only changed a small portion of the prior agreement, did not actually declare any land-use policies or changes, did not remove the City’s power to regulate land use in the donut, and was entered after extensive negotiations for the purpose of settling already lengthy litigation in order to restore a cooperative relationship between the parties.”

The dissenting justices wrote that since the agreement concerned land-use planning and regulation, the decision to enter it was “unmistakably legislative,” and that parts of the 2010 agreement were significant policy changes.

Whitefish Mayor John Muhlfeld released a statement noting his disappointment with the high court’s decision, but also a hopeful outlook as the whole situation moves forward.

“While the City may not necessarily agree with the decision, we have to live with it, and find a way to work cooperatively with the County to protect the community values that make Whitefish such a special and desirable place to live, work and raise families,” Muhlfeld said. “The City and County share similar values, interests, and have had many positive and mutually agreeable meetings on these common issues over the years. Now that we have a clarification of the legal standing of the 2005 Interlocal Agreement, and the legal issues involved in the doughnut jurisdiction issue in order to follow the wishes of our voters in the referendum, we look forward to continuing this dialogue with the County.”

Attorney Duncan Scott, who represented the four plaintiffs in the lawsuit, said the high court’s ruling is a victory for “the thousands of doughnut residents who have suffered nearly a decade under Whitefish’s ‘regulation without representation’ form of government.”

“Our County Commissioners deserve high praise for fighting hard against Whitefish’s unconscionable position that it should be allowed to regulate forever people who cannot vote in city elections. Our Commissioners have never wobbled in their legal support for doughnut residents’ rights during these six long years of litigation,” Scott wrote in a prepared statement. “Now that the Supreme Court has given Flathead County a green light to take over the doughnut, the Commissioners should move swiftly to adopt interim doughnut zoning, which under state law will terminate Whitefish’s doughnut jurisdiction.”

However, Flathead County Commissioner Pam Holmquist said the county would likely take its time to understand the ramifications of the ruling, and any action moving forward will be deliberate and transparent.

“Whatever it is, it will be a public process,” Holmquist said of the county’s plan for the doughnut area. “It is its going to take some time. Nothing is done quickly.”