Municipal Authority and the Doctrine of Ultra Vires
Municipal officials involved in litigation or threatened litigation will occasionally encounter the charge that the municipality or its officials have engaged in conduct that is “ultra vires.” “Ultra vires” has nothing to do with sunburn or the flu, but it is an important legal concept for officials to understand. In some circumstances, municipal action can be overturned because it is ultra vires. In other cases, the fact that an act is ultra vires can be a defense to municipal liability.
Q. What does “ultra vires” mean?
A. Like many old legal terms, it is derived from Latin. “Ultra” means “beyond; outside of; in excess of.” “Vires” means “powers; forces; capabilities.” Black’s Law Dictionary (5th ed.) In municipal law, the term refers to actions that are beyond the power of the municipality, board or official to take.
Q. What sorts of cases involve claims of ultra vires acts?
A. A claim of ultra vires action can occur in almost any kind of case in which someone challenges the validity of municipal action. For example, in Lakeside Lodge, Inc. v. New London, 158 N.H. 104 (2008), the town’s zoning restrictions on docks in Lake Sunapee were ultra vires because municipalities were held to have no jurisdiction over docks in public waters. Board of Water Com’rs v. Mooney, 139 N.H. 621 (1995), held that an impact fee imposed by means of a water connection charge was ultra vires. The efforts of a city tree warden to take possession of a privately owned tree on behalf of the city were ultra vires. Laconia v. Morin, 92 N.H. 314 (1943).
The issue can be raised in struggles for power between officials in the same municipality. In Grimes v. Keenan, 88 N.H. 230 (1936), the efforts of the city council to outsource street construction by contract were held ultra vires as contrary to the authority of the street commissioner under the city charter.
Usually, however, some sort of contractual arrangement with a private party is involved.
Q. How does the principle of ultra vires come into play in municipal contract cases?
A. The classic case is one in which the municipality is sued to collect a debt or for breach of contract. The municipality defends by claiming that the officials involved were not authorized to make the agreement. In Smith v. Epping, 69 N.H. 558 (1899), the town meeting authorized the board of selectmen to borrow a certain sum to build a new town hall. The selectmen borrowed the authorized amount and then borrowed additional sums, which were never turned over to the treasurer. (The opinion doesn’t explain what happened to the money.) In a suit by the lender to collect the additional sums from the town, the town successfully defended by claiming that the promissory notes signed by the selectmen were ultra vires and void. The Court noted that a party doing business with municipal agents has a duty to ascertain the extent of the agents’ authority. There could be no recovery for an unauthorized agreement unless the town had received and retained the benefits of the unauthorized acts of its agents, the selectmen.
These principles were illustrated in the modern case of Marrone v. Hampton, 123 N.H. 729 (1983). A highway led to the beach. The selectmen agreed to let abutters close off the highway to vehicles; landscape parts of the traveled way; and build a seawall and steps to the beach at the terminal point of the highway. The Court invalidated the agreement to allow obstruction of the street as an ultra vires discontinuance of the highway by the selectmen. The Court denied the abutters’ claim for damages for the cost of improvements that obstructed the right of way, but the Court also held that the abutters should be paid for the cost of the seawall and steps, because that was a public improvement that the selectmen could lawfully authorize for the benefit of the town.
Another subject of ultra vires contracts is property taxation. There are several New Hampshire Supreme Court cases that invalidate contracts that purported to grant exemptions from property taxation. For example, in Piper v. Meredith, 83 N.H. 107 (1927), the town’s contract to exempt the plaintiff from taxation in exchange for construction of improvements was held void and unenforceable.
Even zoning can be the subject of ultra vires contracts. In PMC Realty Trust v. Derry, 125 N.H. 126 (1984), the town’s agreement in a consent decree to settle litigation by waiving certain future zoning authority over the subject property was held ultra vires and unenforceable. In Portsmouth v. Schlesinger, 57 F.3d 12 (1st Cir. 1995), the developer’s agreement to pay the city $2.5 million as a condition of rezoning was held ultra vires and unenforceable by the city when it sued to collect the money.
Q. Does this mean that municipalities cannot make binding contracts for nongovernmental purposes, such as renting surplus town property?
A. No. The Court has held that it is not ultra vires to lease municipally owned property that is not currently needed for municipal purposes. Meredith v. Fullerton, 83 N.H. 124 (1927); Curtis v. Portsmouth, 67 N.H. 506 (1894). Other types of activity that are “incidental” to municipal governmental operations are not ultra vires. For example, in the familiar case of Clapp v. Jaffrey, 97 N.H. 456 (1952), the Court held that the plowing of private driveways by the town is an ultra vires activity unless (1) it is only incidental to the plowing of highways and (2) the town is paid the actual marginal cost of the incidental plowing of private property.
Q. Don’t some of these examples seem like situations in which an opposing party might claim “estoppel” against the municipality?
A. True. The concepts are related. (See “Legal Questions and Answers: Understanding the Concept of Municipal Estoppel,” New Hampshire Town and City, July/August 2008, p. 40.) The Court explained the distinction in Concord v. Tompkins, 124 N.H. 463 (1984). The Court set forth the four essential elements of estoppel:
[F]irst, a representation or concealment of material facts made with knowledge of those facts; second, the party to whom the representation was made must have been ignorant of the truth of the matter; third, the representation must have been made with the intention of inducing the other party to rely upon it; and fourth, the other party must have been induced to rely upon the representation to his or her injury…. The reliance by the party bringing the estoppel claim on the representation or concealment must have been reasonable.
The final sentence is the key to the distinction. As stated in Smith v. Epping, “a party who relies on the representations of a government official is at risk that the official acted ultra vires.” 124 N.H. at 470. In other words, it is not reasonable to rely on the statement of an official who is not authorized to take action on the subject. However, a wrong decision by the right official is not ultra vires. Estoppel can prevent the municipality from correcting the decision in such a case. See Aranosian Oil Co., Inc. v. Portsmouth, 136 N.H. 57 (1992), where the developer made substantial improvements in reliance on the code enforcement official’s approval before the official tried to reverse the decision. On the other hand, it is not reasonable to rely on the highway agent’s approval of a pavement plan that violates the zoning ordinance. Healey v. New Durham, 140 N.H. 232 (1995).
Q. Is ultra vires used as a defense to tort liability cases?
A. Ultra vires is a fairly common defense to tort liability in other states. 18 E. McQuillin, Municipal Corporations, sec. 53.60 (3rd ed. 2003). In New Hampshire, only one Supreme Court case uses the term in connection with municipal tort liability. In Wakefield v. Newport, 60 N.H. 374 (1880), the selectmen took it upon themselves to work on a privately owned flagpole. They negligently caused it to fall and injure the plaintiff passing by in a carriage. The town itself was not liable because the actions of the selectmen were ultra vires. (Presumably the selectmen could have been liable as individuals.)
Today, a similar concept is found in RSA 31:105 and :106, which call for municipalities to indemnify employees, selectmen and other municipal officials for liability for negligence and civil rights violations unless they act outside the scope of employment or office. (Note that RSA 31:105, pertaining to negligence, must be adopted by vote of the governing body, while RSA 31:106, pertaining to civil rights violations, applies automatically.)
Q. How can all these situations be avoided?
A. Like all risks, the risk of ultra vires action can be minimized but probably not eliminated altogether. One basic guiding principle is that municipalities have only such powers as are granted by the legislature. Girard v. Allenstown, 121 N.H. 268 (1981). Officials must always keep in mind that not everything that seems reasonable and beneficial is necessarily authorized. A second broad principle is that municipal powers can be exercised only by designated officials and only when they have followed prescribed procedures. This requires continuous planning and attention to detail. This is important both to protect the validity of the municipality’s action and to protect officials from personal liability.
Of course, even with careful preparation, there will be situations where the legality of proposed action is unclear, such as the extent of zoning authority over docks in public waters, addressed in the Lakeside Lodge case. Municipal officials must try to be aware of those situations and consult legal counsel as to what action is appropriate.
David Connell is legal services counsel with the New Hampshire Local Government Center’s Legal Services and Government Affairs Department. For more information on this and other topics of interest to local officials, LGC’s legal services attorneys can be reached Monday through Friday from 8:30 a.m. to 4:30 p.m. by calling 800.852.3358, ext.384.