Montana Supreme Court reverses judge’s decision that blocked residential zoning laws

Montana needs more affordable housing units, and the Villagio, pictured here, and Trinity both opened in 2023, together bringing 402 new homes to Missoula. (Keila Szpaller/The Daily Montanan)

In a 5-0 decision released Tuesday, the Montana Supreme Court reversed a preliminary injunction handed down by a retired Gallatin County judge that blocked two bills related to residential zoning passed by the legislature as part of a housing package last year.

The five-justice panel found that Montanans Against Irresponsible Densification, a consortium of single-family homeowners from across Montana, had failed to meet the four requirements needed for a preliminary injunction – another law changed by last year’s legislature.

The court found that Judge Mike Salvagni, a retired judge who was brought in for the case, incorrectly issued the preliminary injunction based on whether there was a “possibility” of harm to the group and that it had only offered “generalized fears and supposition” about the effects of Senate Bills 323 and 528.

SB 528 allows municipalities to allow accessory dwelling units on land that already has a single-family home, while SB 323 allows duplexes to be built in cities with populations of at least 5,000 people where single-family homes are allowed.

Both were to take effect on Jan. 1 this year, so the reversal of Salvagni’s late-December injunction means they are now the law of the land, though MAID continues to challenge the two laws, along with Senate Bills 382 and 245, in Gallatin County District Court.

The package of bills was a major piece of the legislature and Gov. Greg Gianforte’s housing package from last year, meant to address ballooning home prices in most of Montana and to allow for more new homes and different types of homes to be built in the state.

“I appreciate the Montana Supreme Court for rejecting this injunction, which held back two key reforms identified by our bipartisan Housing Task Force and passed into law by the Legislature,” Gianforte said in a statement Tuesday afternoon. “We will continue to find innovative ideas to increase housing supply so that affordable, attainable housing is within reach for every Montanan.”

In his order in late December enjoining the two laws, Salvagni had said the bills created one group of newer homeowners protected by covenants from having accessory dwelling units and duplexes from popping up in their neighbors’ yards, and another of more longtime homeowners who were not protected. He said that MAID was likely to succeed on the merits of its equal protection clause claim. Salvagni also criticized the legislature for rushing the bill package and creating laws that he said contain “apparent contradictions and irreconcilable differences.”

One of MAID’s members submitted an affidavit in the district court case said he worried that developers putting in multi-unit housing close to his home would negatively affect his property value.

“More important than economic value is the moral, aesthetic neighborhood values that my wife and I share with the neighbors, all of which will be adversely affected if my neighborhood is impacted by development which is more dense,” Glenn Monahan wrote in the affidavit.

In evaluating the appeal, the Montana Supreme Court panel wrote it agreed that MAID had made sufficient claims to ask for a preliminary injunction, but reversed Salvagni’s decision because the group had not met the four factors now required for a preliminary injunction in Montana: that the applicant is likely to succeed on the merits; is likely to suffer irreparable harm absent preliminary relief; that the balance of equity tips in the applicant’s favor, and that the injunction is in the public interest.

Before last year’s session, an applicant for a preliminary injunction only had to show proof that one of those factors were met.

The Supreme Court opinion, written by Justice Beth Baker, notes that though the Montana Constitution grants a fundamental right to acquire, possess and protect property, the court has also held that those rights are subject to the state’s police power to protect public health and welfare.

Baker wrote that while plaintiffs have won other court cases challenging zoning approvals by showing material harms could occur, MAID “offered only generalized fears and supposition” about the effects of the two bills.

“The District Court therefore abused its discretion when it entered a preliminary injunction based on the ‘possibility’ of harm that MAID presented in support of its claim to irreparable injury,” Baker wrote in the opinion.

The court also found that Salvagni abused his discretion in granting the injunction because MAID presented “thin” evidence of imminent harm, while legislators and a housing coalition that wrote friend-of-the-court briefs siding with the state had shown the court the work the Housing Task Force and legislature had done to get the bills crafted and passed.

Finally, the court said that upon remand to the district court, the judge there will have to determine which levels of scrutiny – strict, middle-tier, or rational basis – to apply when considering the challenges to the four bills. The Supreme Court said it did not consider that question because it was not pertinent to resolving the appeal.

Jim Goetz, one of the attorneys representing MAID, declined to comment on the court’s decision and said the district court case would proceed.

Republican legislators, who had submitted an amicus brief siding with the state’s appeal, have for eight months been angered that Salvagni, who is retired, enjoined the housing bills. In July, the Senate Select Committee on Judicial Oversight and Reform, led by Senate President Jason Ellsworth, R-Hamilton, included Salvagni’s name in a letter the committee voted to send to the Supreme Court questioning the chief justice’s abilities to, and reasoning for, appointing retired justices for certain cases.

The committee was formed in the wake of a host of court decisions that did not go the way that Republican legislators had hoped for, and many of those decisions struck down laws they created during the past two legislative sessions as unconstitutional.

“The legislation imperiled by his decision was thoughtfully drafted, vetted through a public process, debated on the floors of both chambers, and passed by a recently elected group of bipartisan legislators,” the letter said. “In contrast, retired judge Salvagni was last subject to a vote of the people a decade ago, retired eight years ago, and is accountable to just one person, the Chief Justice.”

Ellsworth, who has issued subpoenas to eight commission members and other court employees to appear at the committee’s meeting Thursday and is now fighting with McGrath and Mike Menahan, a Lewis and Clark County District Court judge and chairperson of the Judicial Standards Commission, acknowledged in a statement that “the Montana Supreme Court got this one right and I thank them for that.”

“It’s unfortunate that judicial activism in the Gallatin County District Court has improperly delayed pro-housing reforms for nearly a year as Montanans face ever-increasing housing costs,” Ellsworth said in a statement. “I encourage the courts to reject future spurious legal arguments from the plaintiffs and let the Legislature’s bipartisan pro-housing reforms begin to chip away at Montana’s housing crisis.”