The Midwest Planning BLUZ

by Victoria Heldt

The Nature Conservancy v. Larry and Marsha K. Sims
(United States Sixth Circuit Court of Appeals, May 21, 2012)

In December 2001 the Sims purchased a 100-acre farm from The Nature Conservancy, Inc. (TNC) in Kentucky.  The real estate agreement included an easement to “assure that the Protected Property will be retained forever substantially undisturbed in its natural condition and to prevent any use…that will significantly impair or interfere with the Conservation Values of the Protected Property.”  The easement also conveyed to the TNC a right to inspect the property annually to ensure the Sims comply with the easement.  Without the easement, the property was appraised at $260,400 and with the easement it was appraised at $60,000.  The Sims paid $60,084 for the property in addition to a $244,939 tax-deductible charitable gift to TNC.

The property consisted of two sections, one being a residential/agricultural area to be used for the Sims’ residence and for commercial agricultural uses.  The remaining portion of the land, known as Henslow Sparrow, was to be used only for grazing livestock and producing hay.  A detailed description of the condition of the property was included in the agreement.  In January 2005 TNC inspected the property and found several instances of non-compliance with the easement.  One such non-compliance was the fact that the Sims altered the topography on the property by excavating and re-grading a sinkhole behind their residence.  This action violated Section 2.5 of the easement.  The remaining instances of non-compliance were remedied by the Sims and the allegations dropped.

TNC’s expert geologist was permitted to survey the sinkhole and determine the contours of the ground before the sinkhole was filled.  The district court granted summary judgment in favor of the Conservancy, determining that the Sims did indeed violate the easement.  It noted that, although the Sims were allowed to make some changes to the property in relation to authorized activities, filling a sinkhole with an estimated 6,269 cubic yards of soil was not one of them.  In a later judgment, the court awarded the Conservancy $77,337.50 in attorneys’ fees and $18,9902.33 in expenses.  Upon examination of the hours billed to TNC, the court subsequently reduced the amount awarded to TNC by $11,774.  The Sims appealed both judgments.

In regards to the violation of the easement, the Court ruled that the district court was correct in determining that the Sims were in violation.  Section 2.5 of the easement  states “there shall be no ditching; draining; diking; filling; excavating; removal of topsoil, sand, gravel, rock, or other materials; or any change in the topography of the land in any manner except in conjunction with activities otherwise specifically authorized herein.”  Filling the sinkhole clearly violated this condition.

The Sims argued that they are allowed to “enhance their agricultural usage” of the land under Section 3.2 of the easement and in filling the sinkhole they were improving the farming process.  Furthermore, they pointed to the phrase within Section 2.5 that allowed for altering the land “in conjunction with activities otherwise specifically authorized herein” in support of their argument.  They asserted that farming is an authorized activity and thus they are allowed to fill the sinkhole to improve the agricultural use.  The Court rejected this argument, stating that filling is not a normal precursor to farming activities.  In addition, “filling” is strictly prohibited within Section 2.5.

Next, the Sims argued that Section 3.7 gives them the right to “dig wells” and “create ponds” and they should therefore be allowed to place the excavated dirt in a sinkhole on their land.  The Court dismissed this argument as unreasonable since it would allow the Sims to breach one provision of the easement in order to enjoy another.  The Sims further argued that the status of the depression as a “sinkhole” was not disclosed to them before they filled.  Regardless, the Court noted that “filling” is explicitly forbidden.  The Sims claimed they would not have built their residence so close to the sinkhole had they known they weren’t allowed to fill it.  The Court determined it was the builder’s task to recognize limitations of the property in regards to the construction of a home.

Finally, the Sims challenged the reasonableness of the amount of damages awarded to TNC.  The Court noted that the district court took into account all the necessary factors in determining the amount awarded.  It carefully examined the record of hours billed and the breakdown of the hours in its decision-making process.  The Court determined the award to be reasonable.  It affirmed the district court’s decision on both judgments.

Easements, Federal courts Easements, Federal 6th Circuit

by Victoria Heldt and Gary Taylor

Neighborhood Enterprises, Inc.; Sanctuary in the Ordinary; Jim Roos v. City of St. Louis; St. Louis Board of Adjustment
(Federal 8th Circuit Court of Appeals, July 13, 2011)

Neighborhood Enterprises manages the properties of Sanctuary in the Ordinary (SITO), a non-profit organization working with rental properties in St. Louis.  Jim Roos, the founder of both organizations, is involved in the Missouri Eminent Domain Abuse Coalition (MEDAC).  Roos and MEDAC commissioned a sign/mural to be placed on the side of a SITO-owned building.  The sign mural/ was approximately 363 square feet in area and was visible from Interstates 44 and 55.  It read “End Eminent Domain Abuse” inside a red circle with a slash through it.  The sign was similar to the design MEDAC uses in other literature [NOTE: The city of St. Louis had previously condemned 24 buildings owned either by SITO or Neighborhood Enterprises for a private development project] .

In April 2007, the City’s Division of Building and Inspection issued a citation for an “illegal sign” and declared that a permit was required for the sign to be in compliance.  SITO applied and was denied the permit because the sign was painted on a building that was zoned “D” or “Multiple Family Dwelling,” where signs are limited to a maximum 30 square feet, and also because the wall face did not have street frontage and therefore was not allowed to have signage.  SITO appealed to the Board of Adjustment and countered that the sign was, in fact, a “work of art” not required to meet the zoning code’s definition of “sign.” The City justified the requirements in its Zoning Code on concerns for traffic safety and aesthetics.  The Board upheld the zoning administrator’s denial on July 2007.  SITO appealed.

In district court SITO argued, among other things, that the zoning regulations were invalid and unconstitutional pursuant to the First and Fourteenth Amendments to the U.S. Constitution, and as such the Board’s decision should be reversed. The district court granted summary judgment in favor of the City and the Board, finding the zoning regulations were not in violation of the U.S. Constitution and that the Board’s decision was not arbitrary, capricious, unreasonable, unlawful or in excess of the Board’s jurisdiction.  SITO appealed this decision to the 8th Circuit.

On appeal, the 8th Circuit first looked to the issue of standing.  The City and Board argued that SITO only has standing to challenge the provisions within the Zoning Code that were actually applied to the decision to deny the sign permit.  It claimed that SITO could not “show a causal connection between its purported injury and the provisions of the zoning code not applied to it.”  The Court found that SITO had standing to challenge the clauses that were cited in the denial of the permit.  Additionally, it could challenge the sections of the Code that defined a sign and the scope of signs allowed.

SITO’s free speech claim was grounded in the belief that the sign regulations were “riddled with content-based exemptions and restrictions.”  Furthermore, traffic safety and aesthetics were not previously considered “compelling” interests of the government.  The Court found that the Code’s definition of a sign was unconstitutionally content-based because “the message conveyed determines whether the speech is subject to the restriction.”  If a sign/mural of the exact same dimensions and at the same location contained a symbol or crest, or if it were a national, state, religious, fraternal, professional or civic symbol it would not be subject to the city’s regulation.  The Court also found that while the regulations may generally promote aesthetics and traffic safety, the city failed to show how the distinctions between exempt and non-exempt signs found in the code further those goals. The court further held that the code’s exemptions are not narrowly tailored to accomplish goals of traffic safety or aesthetics which, “while significant, have never been held to be ‘compelling’ government interests.

The Court determined the regulation’s definition of a sign to be a violation of the First Amendment but could not rule on whether those clauses could be effectively separated from the Code since the district court never addressed the issue.  It reversed the decision and remanded the case in order for the district court to rule on that matter.

Federal courts, First Amendment claims, Signs and billboards Federal 8th Circuit, First Amendment, Signs and billboards

by Gary Taylor

St. Charles Tower, Inc. v. Kurtz
(Federal 8th Circuit Court of Appeals, June 28, 2011)

St. Charles Tower filed an application for a conditional use permit to build a cell tower in Franklin County, Missouri.  The planning commission denied the application and the applicant appealed the decision to the Board of Adjustment.  The ZBA denied the appeal, providing only the following sentence to justify its decision: “The proposed location of the tower would primarily serve areas outside of Franklin County, not providing a adequate amount of benefit to Franklin County residents.”  The applicant then filed suit against the ZBA and Franklin County claiming that the decision violated the Federal Telecommunications Act (TCA).  Prior to trial the parties agreed to a consent judgment that required the issuance of the conditional use permit, as well as any other permits required for the applicant to begin construction.  After the district court approved the consent judgment, the trustee of the homeowners association that opposed the construction of the tower (Kurtz) sought to intervene in the litigation in order to challenge the consent judgment on the grounds that it violated state law.  The district court granted the motion to intervene but denied the the motion to amend or alter the consent judgment.  Kurtz appealed to the Eighth Circuit.

The Eighth Circuit reversed the district court.  The Eighth Circuit found that the consent judgment remedy – compelling the issuance of a conditional use permit – violated state law because state law specifies the sole method for issuing a conditional use permit is through hearing procedures and a four-fifths vote of the ZBA.  St. Charles Tower and the county argued that the consent judgment was permissible because its provisions were the minimum necessary to correct a violation of federal law (the TCA).  The Eighth Circuit disagreed, noting that the inclusion of the provisions that compelled the issuance of other permits was not  “narrowly tailored so as to infringe state sovereignty as minimally as possible.”

Federal courts, Telecommunications towers consent judgment, Federal Telecommunications Act

by Gary Taylor

Ross County Water Company, Inc., v. City of Chillicothe (OH)
(Federal 6th Circuit Court of Appeals, November 30, 2011)

Ross County Water Company (RCWC) is a non-profit, member-owned, water company incorporated in 1970 under Ohio law. Its members are limited to those who are the record owners of the property served by the water company and to whom the company’s board of trustees has issued a certificate of membership. RCWC serves nearly 13,000 residential and business customers through approximately one thousand miles of pipeline. To finance the construction, maintenance, and extension of its water works system, RCWC borrowed nearly $10.6 million from the United States Department of Agriculture.

The dispute centered around the extension of water service to several commercial and industrial properties approximately two miles north of the municipal boundary of the city of Chillicothe (City).  In 1974, RCWC installed a ten-inch waterline running east to west slightly north of Delano Road that bisects the disputed area which enabled RCWC to provide water service to to a mobile home park.  In 2000, the owner of the mobile home park granted RCWC easements to add additional waterlines to serve other properties owned by the same company.  A sixteen-inch water line was installed in 2003.  RCWC also installed other lines bordering Delano Road, State Route 23, and Hospital Road.

in 2008 the City council passed an ordinance approving plans to develop waterlines north of Delano Road, in the disputed area and cris-crossing RCWC lines.  The Ohio Environmental Protection Agency approved the plans, but RCWC obtained a preliminary junction in Federal District Court for Southern Ohio, claiming protection under 7 U.S.C. § 1926(b) – that portion of the Agricultural Act of 1961 that grants U.S.D.A. authority to extend loans for rural water service and protects loan recipients from competition under some circumstances.  The District Court held that RCWC is entitled to the protections afforded by 7 U.S.C. § 1926(b) and enjoined the City from taking any further action to supply water to the disputed area. The City appealed.

Congress enacted the Agricultural Act of 1961 to “preserve and protect rural farm life.” 7 U.S.C. § 1926(a), granted the Secretary of Agriculture authority to “‘extend loans to certain associations providing water service . . . to rural residents,’” while 7 U.S.C. § 1926(b), was enacted to to safeguard the financial viability of rural associations and these loans. Section 1926(b) provides: “The service provided or made available through any such association shall not be curtailed or limited by inclusion of the area served by such association within the boundaries of any municipal corporation or other public body, or by the granting of any private franchise for similar service within such area during the term of such loan.”

The 6th Circuit Court of Appeals began by recognizing that the intent of this provision is to prevent “local governments from expanding into a rural water association’s area and stealing its customers.” Thus, the provision “should be given a liberal interpretation that protects rural water associations indebted to the U.S.D.A. from municipal encroachment.” To establish that it is entitled to protection, RCWC must show that (1) it is an ‘association’ within the meaning of the Act; (2) it has a qualifying outstanding loan obligation; and (3) it has provided or made service available in the disputed area.  The bulk of the litigation centered on the third prong.   To satisfy this, RCWC must demonstrate (1) it has “pipes in the ground” that provide service within or adjacent to the disputed area, and that (2) it has the legal right under state law to serve the disputed area.

Pipes in the ground.  The Court observed that “pipes in the ground” means that waterlines must either be within or adjacent to the property claimed to be protected, and that RCWC must also be capable of providing service to the disputed area within a reasonable time after a request for service occurs. The City argued that (1) RCWC did not have the physical ability to service the disputed area at the time the lawsuit was filed, and (2) did not have any customers in the disputed area. The Court determined that both arguments failed. As for (1) the Court found that the waterlines installed beginning in 1974 were both through and adjacent to the properties in question, and that they were sufficient to provide water to new customers because the pressure carried in the lines is approximately 150 psi.  The fact that the 1974 line was used to supply emergency water to the City for several weeks in 1998 supported this conclusion. As for (2), the Court stated that the lack of current customers in the area is irrelevant, and that in fact the language of the statute indicates that future customers are relevant and sufficient.

Legal right to serve area.  The Court recognized that the Ross County Board of Commissioners gave RCWC blanket permission to construct waterlines throughout the unincorporated areas of the county, and that the Ohio Environmental Protection Agency permitted the waterlines in question.  The claim by the City in this regard was without merit.

Finally, the City argued that prior caselaw has recognized that section 1926(b) cannot be used as a sword by rural water districts to “foist an incursion of its own on users outside of its boundary that it has never served or made agreements to serve.”  The Court distinguished the prior caselaw as being unique because it addressed a circumstance where a state has predetermined the boundaries of its rural water districts.  In the present case RCWC was established as a non-profit, and is without state-defined geographical boundaries.  Moreover, RCWC had its lines in place prior to the City’s attempt to server the disputed area.

The Court of Appeals affirmed the District Court’s ruling in favor of RCWC.

Federal courts, Rural water service Federal 6th Circuit, infrastructure improvements, rural water districts

by Victoria Heldt

Bishop Harvey, Jr., et al., v. Town of Merrillville
(Federal 7th Circuit Court of Appeals, July 11, 2011)

The residents of Innsbrook, a subdivision in Merrillville, Indiana had several complaints regarding a retention pond near their property as a source of mosquitoes, algae, and flooding.  They feared that a proposed expansion of the subdivision would only enhance the problem, so they attempted to voice their opinions to the Merrillville town council.  The homeowners, who were predominantly African-American, felt they were ignored by the council and claimed to have been victim to racial epithets from a council member (who was also African-American.)

They brought forth a claim under the Fourteenth Amendment, claiming that the council violated their equal protection rights when it was more responsive to another group of people filing similar complaints.  They listed the Town of Merrillville, 16 Merrillville employees (Town Defendants), and the Town’s engineer (Warmelink) in their filing.  They also made a total of 31 state claims against the defendants.  Three years later, the residents moved for summary judgment on twelve issues, one of them being the Fourteenth Amendment claim.  The Town responded with a similar request for summary judgment.  Warmelink made a separate request for summary judgment.  The district court eventually ruled in favor of the Town, finding that the residents “failed to identify a similarly situated class that the Town and Town Defendants treated more favorably.”  The court then remanded the case to the state court to rule on the remaining state claims.  Soon after, Warmelink sought a clarification in the ruling, since he was not listed within the opinion.  The court released an order (December 3 order) that granted summary judgment to Warmelink on the same grounds as the ruling for the Town.

The residents appealed, but failed to mention the December 3 order in their claim.  Subsequently, Warmelink contended that the Court did not have jurisdiction over him because the residents failed to “designate the judgment, order, or part thereof being appealed.”  The Court disagreed.  It noted that incomplete attempts to follow the rule will not be contested as long as the appellee is not harmed.  Since Warmelink gave no evidence that he was harmed or misled by the residents’ appeal (in which is he was specifically named), the Court denied Warmelink’s argument.

The residents’ primary substantive argument rested on the belief that they raised a “genuine issue of material fact” that they were treated differently than a group of Caucasian homeowners making similar complaints regarding a subdivision.  The Court noted that, in order to prevail with an equal protection claim, the party must show that:  1) they are a member of a protected class; 2) they were similarly situated to members of an unprotected class in all relevant respects; and 3) they were treated differently from members of the unprotected class.  The Court admitted that the residents were members of a protected class (all were non-white individuals.)  Yet, the residents failed to establish that they were similarly situated to the members of an unprotected class.

The Insbrook residents attempted to liken themselves to residents of Southmoor (another subdivision) where construction was proposed and opposed.  The Court first noted that the Insbrook residents failed to provide any concrete evidence that the Southmoor residents were white, they only made conclusory allegations.  In addition, the Insbrook expansion was to consist of only single-family homes and was to be zoned R-2, which was the current zoning classification of the development.  On the other hand, the Southmoor residents were opposing a plan that was to consist of duplexes zoned R2 and R3.  The developments being contested were not of the same type.  Additionally, the Merrillville town council granted the Insbrook residents a private meeting at which to object the expansion while it did not do the same for the Southmoor residents.  So it would appear that the Insbrook residents were treated more favorably than the group to which they were comparing themselves.  As a last note, the Court mentioned that the Southmoor subdivision does not even contain a retention pond, which was the catalyst of this case.  The Court found that the residents’ case did not stand since they failed to prove that they were similarly situated to an unprotected class.

Equal Protection claims, Federal courts Equal Protection, Federal 7th circuit

by Gary Taylor

Keating v. Nebraska Public Power District, Nebraska Department of Resources, et al.
(Federal 8th Circuit Court of Appeals, November 8, 2011)

Due to a decrease in water levels in the Niobrara watershed, in 2006 the Nebraska Public Power District (NPPD) requested that the Nebraska Department of Natural Resources (DNR) issue Closing Notices (notices to cease water withdrawals) to hundreds of farmers and ranchers who held surface water appropriation permits that were junior to those permits held by NPPD. In the summer of 2007, the DNR issued such Closing Notices to junior permit holders without providing them notice or a hearing prior to the issuance of the Closing Notices. The appellants filed suit, arguing that the Closing Notices effected a property deprivation, and accordingly they were entitled to the procedural due process protections of a predeprivation hearing. The district court dismissed the suit, holding that the claim was not ripe and that appellants had not exhausted administrative remedies prior to filing the complaint.  After an initial decision, an appeal to the 8th circuit and a remand, district court determined that although the appellants held a property right that entitled them to use the surface waters of the Niobrara River, that right was qualified and subject to the DNR’s administration of the appropriation system. Also, the district court held that the DNR’s administration of the system did not cause the appellants to suffer a deprivation of their property rights. Accordingly, the district court granted summary judgment in favor of the appellees.

In this case the appellants argue they are entitled to a predeprivation hearing prior to the DNR conducting its administration of the Niobrara Watershed and issuing Closing Notices. Specifically, appellants seek a predeprivation hearing to challenge the validity of the NPPD’s permits on the grounds that the NPPD was not beneficially using its appropriation to produce power and to challenge the DNR’s determination of water scarcity.  In addressing the right to a hearing – due process question – a court must first determine whether state action has deprived an individual of a protected property interest, and only after finding such a deprivation does the court consider whether available procedures for challenging the deprivation satisfy the requirements of due process. The US Supreme Court “usually has held that the Constitution requires some kind of hearing before the State deprives a person of liberty or property.”  The 8th Circuit noted that the parties agreed that a water permit entitling the holder to use surface water within the capacity limits of the Niobrara Watershed represents a property right under Nebraska law. That right, however, is not one of ownership of the surface water prior to capture. Instead, the holder of a permit acquires the rights granted by the permit, and is subject to constraints articulated by the permit. Here, the appellants’ permits allows them to use specific amounts of surface water so long as there is sufficient capacity, subject to the rights of senior appropriators and subject to regulation by the State through the DNR.  Appellants argued that when the DNR administers the Niobrara in a manner that requires permit holders to stop taking water, the state should conduct a hearing to give permit holders an opportunity to challenge the DNR’s determination that there is a scarcity.  The 8th Circuit rejected this argument. On the face of the permits, permit holders are warned that there are periods of time when water supply on the Niobrara River is insufficient to meet the demands of all appropriators and that permit holders are “hereby given notice that [they] may be denied the use of water during times of scarcity.” Thus, when the DNR determines that the watershed no longer has the capacity to supply all permit holders, appellants no longer have a legitimate claim of entitlement to use the surface water and thus do not suffer a deprivation of a property right.  The 8th Circuit affirmed the determination of the district court that appellants did not suffer a deprivation of their property rights by the DNR’s actions.

Due Process, Federal courts, Property law, water resources Federal 8th Circuit, legitimate claim of entitlement, procedural due process, water rights

by Victoria Heldt

Jacob v. Killian
(Federal Sixth Circuit Court of Appeals, September 12, 2011)

In October of 1999, Killian, a code enforcement officer for the Township of West Bloomfield, charged Jacob for having “blight” and “junk vehicles” in his yard.  He issued the violation after learning of 10 similar prior complaints regarding Jacob’s property.  Jacob pled guilty to the charge, subject to a plea agreement in which he agreed to clean up the area and remove the fence supports within 14 days.  Killian returned to inspect Jacob’s property pursuant to the agreement and discovered he had not complied with the terms.  Subsequently, Jacob served a 30-day jail sentence over portions of October and November 1999.

Jacob sued Killian, claiming that Killian continued to enter and inspect the curtilage of his property without a warrant after Jacob’s incarceration, and that this activity was a violation of his 4^th Amendment rights.  Killian argued that he should be granted a summary judgment based on qualified immunity.  The principle of qualified immunity protects government officials who perform discretionary functions from civil liability so long as their behavior does not violate clearly established constitutional rights.  The district court denied his request.

On appeal, Killian argued that Jacob lacked sufficient evidence to support the claim that Killian ever entered his backyard after the incarceration (except for on January 7, 2000, which is relevant to a separate claim).  Jacob had testified that he saw Killian enter his property several times and saw him take photographs on some of the occasions.  The Court noted that Killian had previously admitted to inspecting the property on June 26, 2001, which supports Jacob’s testimony.  Additionally, the Court found that Jacob’s testimony itself is enough evidence to defeat a request for summary judgment.

Killian then argued that he should be granted qualified immunity since he completed the inspections of the property pursuant to an order.  The Court stated that the “just following orders” defense holds no merit in the court system.  Furthermore, Killian never provided any actual evidence that he was ordered by his superior within the Township to inspect Jacob’s property subsequent to Jacob’s incarceration.

Killian submitted a picture taken on January 7, 2000 of Jacob’s property as evidence that he never entered the protective curtilage of Jacob’s home.  He admitted that he visited the property on that date, but that the scenery in the picture proves that he never encroached on a constitutionally protected area.  The Court decided not to address this claim since the issues regarding the other incidents in the case would still prevent a favorable ruling for Killian.

Next, Killian alleged that Jacob consented to the inspections as a term of his probation.  The Court determined that this claim had no merit, because Jacob was never actually put on probation.  The terms of his plea bargain stated he would be put on probation if he complied with the terms of the agreement and evaded time in jail.  Jacob was found to be in violation of the agreement and served a 30-day jail sentence; therefore, he was never put on probation.  Additionally, the Court noted that even if Jacob had received probation, it would not mean that he waved his fourth amendment rights regarding entrance onto his property.

After denying Jacob’s request for attorney’s fees or sanctions against Killian, the Court affirmed the district court’s denial of summary judgment.

Federal courts, Zoning enforcement, Zoning officials' immunity 4th Amendment search, code enforcement, Federal 6th Circuit

Note:  We do not seem to see as many Fair Housing Act cases in the Federal circuit courts of the Midwest, so I think it’s helpful to occasionally reach outside the domain of the BLUZ to keep FHA cases on our radar.  This summary comes from the American Bar Association’s Media Alerts service.

Mount Holly Gardens Citizens in Action, Inc. v. Township of Mount Holly
(Federal 3rd Circuit Court of Appeals, September 13, 2011)

Mount Holly Township in New Jersey is pursuing a redevelopment plan which demolishes the existing homes in its Gardens neighborhood and replaces them with significantly more expensive housing units. Current and former residents of the Gardens area filed suit against the Township in the United States District Court for the District of New Jersey, arguing that the redevelopment plan violated the Fair Housing Act. The trial judge in the case granted a summary judgment in favor of the Township, holding that the residents’ statistical evidence of discrimination was inadequate and that there was no reasonable alternative to the Township’s redevelopment plan. The residents appealed this ruling to the Third Circuit Court of Appeals.

The Fair Housing Act makes it unlawful to “refuse to sell or rent . . . or otherwise make unavailable or deny, a dwelling to any person because of race… or national origin.” This provision can be violated either by intentional discrimination or by a practice that has a disparate impact on a protected class. Although no single test controls for measuring disparate impact, a disparate impact is often demonstrated by statistics.  A dwelling can be made “otherwise unavailable” for purposes of the statute by actions that limit the availability of affordable housing.

The residents asserted that the redevelopment plan had an unlawful disparate impact. Through statistical evidence presented by an expert, they showed that African-Americans would be eight times more likely to be affected by the project than Whites, and Hispanics would be eleven times more likely to be affected, because both African-Americans and Hispanics were disproportionately represented amongst those living at the housing complex being destroyed and because members of neither group would be able to afford the replacement housing being built or any other available housing in the Mount Holly area. The Third Circuit concluded that this evidence, when viewed in the light most favorable to the residents, was sufficient to satisfy the burden of creating a case which was sufficient as an initial matter to proceed to trial.

Nevertheless, even though the plaintiffs were able to establish a prima facie case, the defendant Township could still have escaped liability by offering a legitimate reason for its actions and by showing that there was no less discriminatory alternative to those actions. Here, the Third Circuit concluded that alleviating blight and unsafe living conditions was a legitimate reason for the Township’s action. However, the court also said that the Township had failed to show that there was no less discriminatory alternative to its plan. The residents’ expert argued that a more gradual redevelopment plan would have allowed existing residents to move elsewhere in the neighborhood during each stage of the redevelopment, and then move back once that stage was completed. He also argued that an approach that relied primarily on rehabilitating the existing housing stock instead of demolishing and rebuilding it would have been a practical way to produce housing units that the current residents could have afforded. Because there was an ongoing dispute between the parties as to whether the plaintiff’s proposed approach was a viable one, the Third Circuit concluded that the case should have been allowed to continue for the further development of evidence. Accordingly, the Third Circuit reversed the trial court’s grant of summary judgment for the Township and remanded the case to the lower court for further proceedings.

Fair Housing Act, Federal courts discriminatory impact, Fair Housing Act, Federal 3rd Circuit, statistical evidence

by Gary Taylor

Iowa Assurance Corporation v. City of Indianola
(Federal 8th Circuit Court of Appeals, August 16, 2011)

Vinton Watson races figure eight cars, and owns seven to eight cars at any one time. In March 2006 Watson began leasing a shop and adjacent parking lot from Ron Inman to store his cars. Inman’s property is located in Indianola and is zoned for commercial use. The shop that Watson leases consists of half of one building and amounts to “a little over 900 square feet.” The parking lot included in the lease is located immediately adjacent of the building and is twenty-seven by thirty-four-feet. Watson can store up to three cars in the shop, although it is difficult to store more than two cars when repairing vehicles inside the shop. Additionally, Watson stores up to three cars in the parking lot, although cars are not always stored there.

Neighbors have complained to the Indianola city council on numerous occasions about the appearance and noise of Watson’s cars.  As a result, the city council passed an ordinance in 2007, amended in 2009, requiring figure eight cars and other race cars to be inclosed by a fence in all outdoor areas where two or more vehicles are present.  Watson sued the city, specifically alleging that the ordinance creates an uncompensated regulatory taking by requiring him to install a fence and by reducing the overall value of the property.  The suit was brought in state court but the city had the case removed to federal court.  The Federal District Court for the Southern District of Iowa found in favor of the city and Watson appealed.

The 8th Circuit noted that regulatory takings claims come in four types:

The first type is a regulation which requires an owner to suffer a permanent physical invasion of her property. The second type is a regulation that completely deprive[s] an owner of all economically beneficial use of her property. The third type is a governmental requirement that, without sufficient justification, requires an owner to dedicate a portion of his property in exchange for a building permit. The fourth type is any other regulation which, after considering its economic impact upon the plaintiff and its essential character, is functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain.

Watson claimed that the city’s action violated the first and third types: physical invasions and land-use exactions.  The Court rejected both of Watson’s claims.  It rejected the physical invasion claim because the ordinance does not require Watson to permit either the city or any third party to enter his property to install a fence, and consequently does not erode his right to exclude others from his property.  It rejected the land use exaction claim because in those cases the government is demanding that a landowner dedicate an easement allowing public access to her property as a condition of obtaining a development permit, or other type of license.   The Indianola ordinance does not require Watson to dedicate any portion of his property to either the City’s or the public’s use as a condition of anything.

Federal courts, Takings Federal 8th Circuit, fence ordinance, regulatory takings

by Melanie Thwing

Big Dipper Entm’t, L.L.C. v. City of Warren

(U.S. Court of Appeals Sixth Circuit, April 13 2011)

In 2006 the City of Warren, Michigan amended the city code to restrict the location of adult businesses. This was in an attempt to “halt property value deterioration,” “eliminate the causes of deterioration,” and “eliminate blight.” Before enacting this ordinance the City received and reviewed 49 studies and reports about secondary effects of adult businesses.

The City published a notice of intent to amend Section 14.01 of the City code, which again was to “prohibit the location of sexually oriented businesses within the boundaries of the Warren Downtown Development Authority.” A temporary ban on all new permits was enacted during the consideration of the proposed amendment.

Big Dipper Entertainment filed a petition to operate a topless bar one day prior to the ban going into effect. The city code specifies that the application must be acted upon within twenty days. The city clerk denied the application after twenty-four. Two years later in 2008 Big Dipper filed this U.S.C. § 1983 action in federal district court, arguing that Section 14.01 of the Warren City Code violates the First Amendment, and that the untimely rejection of the application acted as a prior restraint on protected expression. The district court granted summary judgment for the City and Big Dipper appealed to the Sixth Circuit.

Big dipper first argued that § 14.01 was an unconstitutional restriction on speech, and that the main purpose of § 14.01 was not to limit secondary effects but to prevent new adult businesses from opening. The Sixth Circuit noted that “the speech at issue here was that conveyed by a topless bar” and it is common sense to say that in a democracy “society’s interest in protecting this type of expression is of a wholly different, and lesser magnitude than the interest in untrammeled political debate.”  To satisfy its burden, the city need only show that its “predominate concerns were with the secondary effects” of adult businesses.  The city met this burden through the evidence provided in the collection of studies and reflected in the city council meeting minutes.

Also Big Dipper argued that the district court disregarded their expert’s analysis that showed that § 14.01 restricted locations to only ten potential sights from thirty-nine. The Sixth Circuit noted that Big Dipper did not raise this issue in district court, and that the burden to create a genuine issue of material fact falls to Big Dipper not the district court. Only two applications for adult businesses were filed in the five years leading up to the litigation. Even a reduction from thirty-nine potential sites to ten, as would be the result of § 14.01 still supplies almost thirteen times more sites than the five-year demand. This was “more than ample for constitutional purposes.” The decision of the district court was affirmed.

Adult Entertainment Regulations, Federal courts, First Amendment claims Adult Entertainment Regulations, Federal 6th Circuit, First Amendment, prior restraint