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Regulation of inflatable devices at car dealership withstands First Amendment scrutiny

December 3rd, 2012

by Kaitlin Heinen

PHN Motors, LLC v. Medina Township
(Federal 6th Circuit Court of Appeals, September 4, 2012)

PHN Motors  et al. in northeastern Ohio filed a complaint that Medina Township violated their First Amendment right to free expression, their Fifth Amendment rights under the Due Process clause, and their Fourteenth Amendment rights under the Equal Protection Clause. The complaint arose from the interpretation and enforcement of Medina Township Zoning Resolution (MTZR) § 603E, which prohibited PHN Motors from displaying inflatable devices at their car dealership in a commercial district of Medina Township.

PHN Motors displayed 27 inflatables owned and rented by Scherba Industries, Inc. and has been cited several times by the Medina Township Zoning Inspector in violation of MTZR § 603E as a result. PHN Motors claimed that MTZR § 603E is unconstitutionally vague and infringes upon their First Amendment free speech rights. They also alleged that the regulation was “unevenly” enforced because it was only sometimes enforced against PHN Motors and because it was enforced unequally between commercial and residential districts.

The district court ruled in favor of Medina Township on all claims, so PHN Motors appealed  to the U.S. 6th Circuit Court. They challenged the district court’s dismissal of its First Amendment claims, its finding that MTZR § 603E is not unconstitutionally vague thus not violating any due process rights, and its conclusion that Medina Township’s enforcement of MTZR § 603E does not violate any equal protection rights.

In regards to their First Amendment claim, PHN Motors argued that MTZR § 603E consists of a content-based regulation of both commercial and non-commercial speech, which violates the protections for free speech under the First Amendment. To the contrary, Medina Township argues that the regulation is content-neutral, and that PHN Motors’ speech is only commercial in nature. The U.S. 6th Circuit Court found the MTZR § 603E is a content-neutral restriction upon speech. More specifically, MTZR § 603E prohibits certain elements the may be added to signs in Medina Township, such as “elements which revolve, rotate, whirl, spin, or otherwise make use of motion to attract attention” as well as signs that “contain or consist of flags, banners, posters, pennants, ribbons, streamers, spinners, balloons, and/or  any inflatable devices, search light, or other similar moving devices.” Medina Township’s purpose behind the regulation is for an improvement in the aesthetics of the township’s commercial areas and to minimize motorist distractions that can potentially be a safety hazard for passing traffic. The 6th circuit court found that the regulation does not, on its face, regulate speech based upon its content. Additionally, the free speech in question is commercial in nature, which is expressly for the furtherance of economic interests. Even though PHN Motors counter-argues that many of the inflatables displayed depict holiday characters, the court found that they are used nonetheless as a brand-recognition tool, with the intent of attracting business. Commercial speech is provided a lesser protection by the Constitution, for which intermediate scrutiny is the appropriate standard of review to be applied. Intermediate scrutiny requires that the government restriction on speech be narrowly tailored to further a substantial governmental interest. Aesthetics and safety both can be considered substantial governmental interests. In regards to aesthetics, Medina Township has expressed a substantial need to clean up the appearance of its commercial areas. As for safety, minimizing distractions for passing motorists is also substantial. The objectives of MTZR § 603E are “reasonable” and “not more extensive than necessary.” So the regulation is a reasonable means to achieve the ends of improved aesthetics and increases motorist safety. A ban on inflatables is not more extensive than necessary to advance these interests then. In conclusion, no First Amendment violations occurred.

Addressing whether MTZR § 603E is unconstitutionally vague, the 6th circuit court  began with the presumption that local zoning ordinances are valid and applied the standard of whether or not a person of ordinary intelligence would be able to determine what conduct is regulated or prohibited. PHN Motors argues that MTZR § 603E implies that movement is necessary to prohibit the use of inflatables, and that the enforcement of this regulation is inconsistent because it is left solely to the Zoning Inspector, who is unsupervised and enforcement is left to her discretion. The 6th circuit court ruled that the regulation was not vague, confusing, ambiguous, or inconsistent. Rather, the legislative intent behind the regulation was clear in regards to its ban on inflatables, the enforcement of the regulation does not violate PHN Motors’ due process rights, and a person of ordinary intelligence would know that inflatables are prohibited by the plain language used in the regulation. Considering the multiple references to a ban on devices that employ movement and “as inflatables of the type displayed by BDK are soft and often move in even the slightest breeze,” it can reasonably be concluded that all inflatables are banned. As for the Zoning Inspector, she and Medina Township have consistently upheld that inflatables are banned and her enforcement of this is overseen by the Board of Zoning Appeals. All in all, the court concluded that MTZR § 603E is not unconsitutionally vague.

Lastly, the court addressed PHN Motors’ Equal Protection claim in regards to the enforcement of the ban in commercial areas, but not residential. The court found that PHN Motors did not provide adequate evidence that property residing in residential districts is similarly situated to property residing in commercial districts. Medina Township, however, showed that property zoned for residential use is different than property zoned for commercial use in that residential districts draw significantly less traffic compared to commercial districts and that commercial districts are visitors’ first impression of the town. As a result, Medina Township has a greater interest in regulating the aesthetics and safety of these areas. PHN Motors also failed to show that the differential treatment lacks a rational connection to a legitimate government interest. The Zoning Inspector even testified that she does not enforce the inflatable ban in residential areas because MTZR § 603E does prohibit them there, since they are not for purposes of advertisement on residential property. The court concluded that no Equal Protection violations happened.

The ruling of the district court was affirmed.

Federal courts, First Amendment claims, Signs and billboards , , ,

Bridge company not a federal instrumentality; case can proceed in federal court

October 16th, 2012

by Kaitlin Heinen

Commodities Export Company v. Detroit International Bridge Co.
(Federal 6th Circuit Court of Appeals, September 24, 2012)

In 1921, Congress gave the Detroit International Bridge Company’s predecessor permission to build and operate the Ambassador Bridge, which spans the Detroit River from Detroit, Michigan to Ontario, Canada. The Bridge Company is a private, not-for-profit corporation, incorporated under Michigan law. The Ambassador Bridge is also “the busiest commercial border crossing in North America,” where 26-30% of all trade between the United States and Canada occurs. Besides operating a compound for border inspections, the federal government has no involvement in the Bridge Company’s operations.

In the mid-1990s, the Bridge Company began work with the Michigan Department of Transportation on the “Ambassador Bridge/Gateway Project.”  The Bridge Company sought federal approval to build new toll plazas, a gas station, and a weigh station for trucks. In 2000, the Bridge Company asked the City of Detroit for zoning variances to complete these projects. The City denied the requests, but the Bridge Company went forward in the project. The City sued, but the Michigan Supreme Court held that the Bridge Company was a “federal instrumentality for the limited purpose of facilitating traffic over the Ambassador Bridge,” which meant that the Bridge Company was immune from the City of Detroit’s zoning regulations.

One year after the Michigan Supreme Court’s decision, Commodities Export Company filed suit against the City of Detroit and the United States in U.S. District Court, alleging that the Bridge Company had effected a regulatory taking by condemning and closing the only road that provided access to Commodities Export’s property. Commodities Export argued the City was liable for failing to protect them from the Bridge Company’s actions, and the United States was liable because it failed to control its federal instrumentality. Commodities Export also claimed that the Bridge Company is not a federal instrumentality because the United States has yet to declare it so. Commodities Export’s complaint asked for a mandatory injunction for the City to enforce its ordinances and the United States to declare whether or not the Bridge Company is a federal instrumentality.

Five months after the beginning of this suit, the Bridge Company sought permission to participate as amicus curiae, but was denied by the district court. Two months later, the Bridge Company sought permission then to intervene as a defendant. The Bridge Company claimed that the United States was not a proper party to the case, that the district court lacked jurisdiction over the United States, and that the case was the product of collusion between the City and Commodities Export. The United States filed a cross-claim against the Bridge Company in response.

The United States alleged that the Bridge Company had “misappropriated the status of ‘federal instrumentality.’” The United States also claimed that the Bridge Company “is not a federal instrumentality, of any kind, or any other type of arm, appendage, servant, or agent whatsoever of the United States,” and the Bridge Company’s representation as such is contrary to federal law. The Bridge Company filed a motion with counterclaims in response. The district court denied the Bridge Company’s motion and its motion for reconsideration, ordering the Bridge Company “to cease and desist from representing that [it is] any kind of federal instrumentality or other arm, appendage, or agency of the federal government, in state court, federal court, or elsewhere.”

One month later, Commodities Export voluntarily dismissed its remaining claims, citing a confidential settlement agreement with the Bridge Company. Dismissing the remaining claims would vacate the court’s federal instrumentality ruling, however. The United States objected. The Bridge Company also objected because a vacation of the ruling would allow the earlier opinions of the district court to stand, which were entered into without subject-matter jurisdiction. The district court granted Commodities Export’s dismissal but refused to vacate its earlier federal instrumentality ruling. The Bridge Company now appeals to the U.S. 6th Circuit Court.

In its determination of whether the federal courts have jurisdiction over the United States’ cross-claim, the U.S. 6th Circuit Court examined two issues: Article III’s case-or-controversy requirement and statutory subject-matter jurisdiction. “Under Article III [of the Constitution], the federal courts may exercise jurisdiction only if the parties have presented a live case or controversy…The United States easily clears this hurdle. Commodities Export haled the federal government into court…holding the United States liable for the wrongs of its instrumentalities.” The federal government faced the possibility of having to pay Commodities Export for the Bridge Company’s misconduct as a “federal instrumentality.” This causes a liability problem for the United States while the Bridge Company continues to claim that it is a federal instrumentality elsewhere, a problem which is certainly considered a controversy by the court. Also, the district court clearly had subject-matter jurisdiction. “‘The district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States.’ 28 U.S.C. § 1345. The United States brought this suit against the Bridge Company as soon as the Bridge Company intervened.” Therefore, federal courts have jurisdiction over the cross-claim in question.

The U.S. 6th Circuit Court next considered the impact of the Michigan Supreme Court’s federal instrumentality ruling. First, federal courts must defer state-court interpretation of state law. However, the Michigan Supreme Court dealt with a federal issue, arising under federal law that could cause liabilities for the federal government. “The effect of the Michigan Supreme Court’s holding was to prevent a city from enforcing its own zoning ordinance,” under the condition that the Bridge Company was a federal instrumentality. But the question of whether the Bridge Company is a federal instrumentality constitutes federal common law, which is appropriate for reconsideration, i.e., hearing the issues afresh, by the federal courts. Nevertheless after careful examination of federal instrumentality case law, the U.S. 6th Circuit Court reached the same conclusions as the lower courts.

The U.S. 6th Circuit Court ruled that the federal courts have jurisdiction over the United States’ cross-claim. No deference is owed the Michigan Supreme Court’s interpretation of federal common law. However, the U.S. district court correctly held the Detroit International Bridge Company is not a federal instrumentality. Likewise, the district court did not err in granting Commodities Export a voluntary dismissal motion without vacating the federal-instrumentality ruling in favor of the United States. The U.S. 6th Circuit Court affirmed the district court’s judgment.

Federal courts, Michigan courts, Transportation ,

City council corruption does not give rise to Constitutional claims in rezoning denial

October 8th, 2012

by Kaitlin Heinen

EJS Properties, LLC v. City of Toledo; Robert McCloskey
(Federal 6th Circuit Court of Appeals, September 5, 2012)

In April of 2002, EJS Properties entered into a conditional agreement with Pilkington Corporation to purchase 20 acres of a 43-acre lot that Pilkington owned, which included a technical center that EJS intended to convert into a charter school. This agreement was expressly contingent on obtaining a zoning change from industrial to one that could contain a school. EJS also entered into a non-conditional lease agreement with Lake Erie Academy to open the charter school. In May 2002, EJS filed a re-zoning petition with the Toledo-Lucas County Plan Commission. The Plan Commission recommended the re-zoning and passed the request onto the Toledo City Council. The City Council’s Zoning and Planning Commission held a public hearing on July 17, 2002, where everyone agreed to re-zone only the portion of Pilkington’s lot that would be needed for the school. The Committee voted unanimously to recommend the request for full vote by the Council, which was placed on the City Council’s agenda for August 13, 2002. During this re-zoning process, EJS had obtained an early-start building permit to begin $200,000 worth of repairs and improvements on the technical center.

Prior to August 13, Pilkington executives John Keil and Randy Berg had a lunch meeting with City Council member Robert McCloskey, who represented the district containing the Pilkington lot. McCloskey asked Pilkington to donate $100,000 to assist local retirees at the community center—Keil and Berg declined. At the next council meeting, member Peter Gerken moved to table consideration of the re-zoning for two weeks. EJS claims that McCloskey lobbied the other members to reverse their vote, but when he could not get enough to defeat the measure, he asked Gerken to table the matter. (McCloskey was a former Pilkington union negotiator, who had helped negotiate a labor agreement that capped healthcare benefits for retirees, for which he faced significant criticism upon being elected to City Council.) McCloskey then proceeded to call Keil, Berg, and Erich Speckin, the owner of EJS, and left questionable voicemails that sought the money for the retirement center in connection with the pending re-zoning. On August 22, Keil sent a letter to all of the City Council members and Mayor, seeking support for the re-zoning request and to consider the unrelated issues between Pilkington and McCloskey: “Such issues have the potential for exploitation to the detriment of the zoning request.” Pilkington and EJS never reported McCloskey’s request to the police.

On August 27, 2002, the City Council voted 7-4 against re-zoning (4 members had changed their vote from committee, including McCloskey). Only one member testified that he had been approached by McCloskey, who discouraged voting for the ordinance. EJS did not appeal the denial. Two months later, Toledo voters passed a levy, mandating the building of two new middle schools on the east side of Toledo. Toledo Public Schools (TPS) won an eminent domain lawsuit against Pilkington in November 2003 for the entire 43-acre lot. The Plan Commission, the City Council’s Zoning and Planning Committee, and the City Council approved a re-zoning in January 2004 to build a TPS middle school there.

EJS filed a complaint against the City and McCloskey in May 2004 for deprivation of substantive and procedural due process, deprivation of equal protection, deprivation of its property rights and its First Amendment right to petition in violation of 42 U.S.C.A. §1983, and wrongful interference with a business expectation in violation of state law. The district court granted summary judgment to the City and McCloskey on EJS’ constitutional claims. The court denied McCloskey summary judgment on EJS’ tortious interference claim (the district court actually stayed legal proceedings at one point to see the outcome of McCloskey’s 2006 indictment on federal criminal corruption charges, for which he pleaded guilty and received a 27-month prison sentence). After first dismissing EJS’ appeal for jurisdictional reasons, EJS dropped the state-law claim for wrongful interference. Then the U.S. 6th Circuit Court was able to hear the case.

In arguing for the deprivation of substantive and procedural due process, EJS argues that it had property interests at stake in the ordinance for re-zoning, in its contracts, and in its early-start building permit. The City Council never approved the re-zoning ordinance; rather, the City’s Planning Commission and Committee did. The 6th Circuit found that the only way for EJS to have a property interest in the re-zoning ordinance then is if the City Council lacked the discretion to approve it. However, the Toledo Municipal Code’s use of the word ‘may,’ grants the City Council discretionary authority over zoning regulation. Therefore EJS had no property interest in the re-zoning ordinance. Absent a property interest, EJS had no recognizable rights subject to due process protections.  As for its contracts, EJS argues that the contract options created property interests subject to due process protections; however, the purchase agreement explicitly states that “prior to the Closing Date, [EJS] has no title or estate in the Property…and will not claim any such interest…over any part of the Property.” The contract was explicitly contingent upon obtaining a re-zoning for the property, which did not happen–therefore, EJS possesses no interest in the property as a result of its contract. Finally, in regards to the early-start building permit, the permit did not entitle EJS to a re-zoning change, and the improvement work done on the building was “performed at the applicant’s own risk,” according to Toledo Municipal Code.

EJS also argued that it possessed two liberty interests that were violated: 1) a liberty interest in a government decision free from corruption and 2) a liberty interest in engaging in business contracts without unlawful interference. As to the first claim, corruption only affects procedural due process, which EJS could not be deprived of since the court ruled that EJS never possessed a  property interest of any kind. The court rejected the second claim on the same grounds as its ruling on property interests in relation to EJS’ contracts, holding that the defendants did not interfere with EJS’ right to contract because the contracts were contingent on discretionary zoning.  Additionally, the Supreme Court of the United States has upheld only a short list of liberty interests, and the circuit court here could not find any support for a liberty interest in a discretionary government decision free from corruption or unlawful interference.

In addition, EJS argued that corrupt zoning decisions “shock the conscience” and violate substantive due process as a result, regardless of whether or not a property or liberty interest is at stake. However, the court dismissed this claim, stating, “Our prior precedent makes clear that in the context of a discretionary zoning decision, government action will not shock the conscience unless the arbitrary and capricious action touches on a protectable interest.” With neither a property nor a liberty interest at stake, EJS had no merits for this claim. Even if EJS had a property or liberty interest, the court reasoned that “although we can condemn McCloskey for his misconduct, we simply cannot say that his behavior is so shocking as to shake the foundations of this country,” which was the original purpose for establishing the “shocks the conscience” standard.

Finally, EJS’ last two claims involved its right to petition and its right to equal protection. The court conceded that seeking redress from a government official qualifies as petitioning, for which a zoning request also qualifies. Specifically in regards to its right to petition, EJS argued that its right to meaningful access was violated. The court countered that EJS was equating meaningful access with meaningful process. Process is associated with violations of substantive or procedural due process, which was already decided to not have occurred in this case because EJS lacked both a property and a liberty interest. As for equal protection, the court ruled that EJS and TPS were not similarly situated, which does not grant adequate merits for an equal protection claim. Unlike EJS, TPS owned the relevant property at the time of their re-zoning request. TPS also intended to use the entirety of the property rather than part of it. And TPS planned to build a financially stable public school rather than a private school. These are rational bases for the City Council to have treated EJS differently than TPS.

Having dismissed all of EJS’ constitutional claims, the U.S. 6th Circuit Court upheld the district court’s decision to grant summary judgment to the defendants.

Due Process, Equal Protection claims, Federal courts, Rezoning , , , , ,

Retrial of Equal Protection “class-of-one” claim proper when city’s size cap limitation ended landowner’s deal with Wal-Mart

September 24th, 2012

by Gary Taylor

Loesel, et al, v. City of Frankenmuth (MI)
(Federal 6th Circuit Court of Appeals, August 20, 2012)

Plaintiffs, (Ronald Loesel and others), are the co-owners of a 37-acre tract of land that borders Main Street just outside the Frankenmuth city limits. They inherited the property from their mother when she died in 2003. A 2003 property-tax appraisal valued the land at $95,000.  Although not within the City’s boundaries, the property is within the urban growth area that was established jointly by the City and the Township in 1985 to confine and guide urban growth in order to retain the character of the Frankenmuth community. The City and Township first adopted the Joint Growth Management Plan (the Plan) in 1985, and amended the plan in 2005.  The Loesels’ property lies within an urban limit line established by the Plan to “[p]romote compact residential and commercial development in and near the city limits. To implement the Plan, the western portion of the Loesels’ property along Main Street, approximately 15 acres in size, was zoned as Commercial Local Planned Unit Development (CL-PUD), with the remaining 22 acres to the east designated as Residential Planned Unit Development (R-PUD). Permitted uses for CLPUD-zoned properties include developments that “provide principally for sale of goods and services to meet the general needs of the residents of the Frankenmuth community, including but not limited to grocery, department, drug and hardware stores, financial institutions, professional and personal service offices and transportation sale and service businesses.”

In 2004, the Loesels were approached by Wal-Mart, which was interested in purchasing the property because the western portion abuts Main Street and is commercially zoned.  In late May 2005 the Loesels entered into a conditional agreement to sell 23.55 acres to Wal-Mart for $2,943,750.  Under the agreement Wal-Mart had 180 days to determine the feasibility of the project and pull out without penalty.

Forces within city government and citizens learned of the agreement and marshaled opposition.  in August 2005 the city council adopted a 120-day moratorium on the construction of any facility with an area of 70,000 or more.  The city manager recognized that the commercial zoning classification of the property would allow Wal-Mart to build, but explored the possibility of a permanent ordinance limiting the square footage of commercial establishments, including  the potential legal liability of adopting such an ordinance.  A business group supported the size cap, but only on the north side of the city (Loesels’ property), not in other location (their properties).  A version of the size cap limitation (65,000 square feet) was settled on that only applied in the CL-PUD district, effectively limiting its reach to Loesels’ property and a handful of much smaller parcels.  It was adopted on December 7, 2005.  Wal-Mart pulled out of its agreement with the Loesels, citing the 65,000 square foot restriction.

The Loesels sued the city under 42 U.S.C. § 1983, alleging that the City’s 65,000-square-foot zoning restriction violated their rights under the Equal Protection, Due Process, Privileges or Immunities, and Commerce Clauses of the U.S. Constitution. As a remedy, they sought $4 million in compensatory damages (the sale price of the property under an amended agreement reached by Loesels and the city prior to Wal-Mart pulling out).  The district court granted summary judgment in favor of the city on all claims but Equal Protection.  The Equal Protection claim was allowed to go forward to a jury trial, where the jury found in favor of the Loesels and awarded damages of $3.6 million.  The city appealed, arguing that the district court should have awarded judgment as a matter of law in favor of the city on the Equal Protection claim.

“The Equal Protection Clause prohibits discrimination by government which either burdens a fundamental right, targets a suspect class, or intentionally treats one differently than others similarly situated without any rational basis for the difference.”  Loesels pursued their claim under the “class-of-one” theory which, although recognized by the US Supreme Court in 2000, is generally viewed skeptically for their potential to turn into an exercise in which juries are second-guessing the legislative process.  To prove a class-of-one case the Loesels bear the “heavy burden” of proving that they were treated differently than those similarly situated in all material respects.  In addition, they must show that the adverse treatment they experienced

was so unrelated to the achievement of any combination of legitimate purposes that the court can only conclude that the government’s actions were irrational. This showing is made either by negativing every conceivable reason for the government’s actions or by demonstrating that the actions were motivated by animus or ill-will.

Similarly situated.  To determine whether the Loesels were treated differently than those similarly situated in all material respects, the 6th Circuit determined that the proper comparison is between the Loesels’ property and the properties on which two other similarly-sized commercial establishments sit.  The Court rejected the city’s arguments that the properties were not similarly situated because of differing zoning classifications, because of the fact that the Loesels’ property was the only one of the three that was vacant, and because the traffic capacities of the serving roads were different (road capacity could have been addressed by means other than a size cap).  The 6th Circuit concluded that  district court did not err in denying the City’s renewed motion for judgment as a matter of law on this issue.

No-conceivable basis theory. The city’s expert testified with several reasons why the size cap was only appropriate for properties in the CL-PUD district, which the city asserted provided the rational basis for its decision; however, the Court pointed out that the jury rejected the expert’s testimony on a number of contentions, and that the city manager himself contradicted the expert’s opinions.  The Court concluded that a genuine dispute exists as to whether the ordinance lacked a rational basis.  Denial of the city’s motion for judgment as a matter of law was again proper.

Animus or ill-will.  On this claim the city prevailed.  The Court noted that the animus must be directed toward the Loesels personally to be actionable.  City officials’ animus was not directed at the Loesels, but rather the Wal-Mart project itself.  Judgment as a matter of law for the city on this count should have been granted.

Because the record did not reflect which theory the jury used to find the city liable, the Court vacated the judgment and remanded it back to the district court for a new trial, excluding “animus or ill-will” as possible grounds for a verdict favoring the Loesels.

Equal Protection claims, Federal courts , , , ,

Court must consider evidence of non-receipt of certified letters in due process claim

September 21st, 2012

by Kaitlin Heinen

Alford Cotton v. City of Cincinnati
(United States 6th Circuit Court of Appeals, August 21, 2012)

Alford and Rubbie Cotton bought a building, with address 1673 Westwood Avenue, in 2002, but had allowed it to deteriorate over the next seven years. In 2009, city inspectors reported that the building was empty, had no heat or running water, was infested with rodents, and was littered with human excrement and drug paraphernalia. The City of Cincinnati sought to declare the building a public nuisance. Before this can happen, though, the Cincinnati Municipal Code requires the City to hold a public hearing and that the City send notification of the hearing to the building’s owners via certified mail. After consulting the county land records, the City found only the Cottons listed as the owners of the building and their residential address was listed as 1673 Westwood Avenue—the same address as the vacant, run-down building in question. The City proceeded to send notice to 1673 Westwood, posted a notice on the building, and published a notice in the City’s Bulletin for two weeks, in accordance with the Cincinnati Municipal Code.

The Cottons did not attend the hearing held on October 30, 2009, where a building inspector testified that the building violated numerous code provisions; the police department testified that the building is a safety concern as it frequently harbors vagrants; the fire department testified that the building is a fire hazard; and a certified property manager testified that building’s condition had lowered property values in the neighborhood. Based on this evidence, the City declared the building a public nuisance and ordered its demolition, for which the Cottons would foot the bill. The City mailed a letter to the Cottons–again at the Westwood Avenue address–informing them of the hearing’s outcome. The City hired private contractors for the demolition and issued them a permit, which was completed in May and June 2010.

“After the dust settled,” the Cottons filed suit against the City and the private suit in state court, alleging their Fourteenth Amendment due process rights were violated, in that the City did not provide adequate notice of nor obtain a warrant for the demolition of their building. The Cottons also claimed trespass and sought a writ of mandamus to force the City to institute eminent domain procedures for the taking of their building. On appeal before the district court, the Cottons cited the U.S. Supreme Court decision in Jones v. Flowers, which held that if the initially mailed notice is unclaimed, the City must take additional steps to provide notice to the property owner. The district court granted the City’s request to take judicial notice that the letters were mailed and held that the letters mailed by the City satisfied Fourteenth Amendment due process requirements. The Cottons objected in federal court, urging the U.S. 6th Circuit Court of Appeals to take judicial notice of the public records that show that the letters were returned as undelivered.

The City did not offer an explanation for why the court should take judicial notice of public records that show the letters were mailed but not public records that show the letters were returned as undelivered. “To respect the one form of judicial notice but not the other creates a half truth, and an important one at that.” (Fed. R. Evid. 201(b).  As a result, the 6th Circuit vacated the district court’s judgment and remanded the case back to the district court to decide the Cottons’ case in  consideration of all relevant public records.

Due Process, Federal courts, Notice , ,

6th Circuit provides good overview of the state of cell tower regulation in the federal courts on its way to its own decison

August 27th, 2012

by Gary Taylor

T-Mobile Central v. West Bloomfield Charter Township
(Federal Sixth Circuit Court of Appeals, August 21, 2012.)

T-Mobile proposed to build a cellular tower in an area of West Bloomfield Township, Michigan, that had a gap in coverage. The facility contained an existing 50-foot pole, which T-Mobile wanted to replace with a 90-foot pole disguised to look like a pine tree with antennas fashioned as branches (a monopine).  The site was not located within the two cellular tower overlay zones identified on the Township’s zoning map where such facilities are permitted by right.  T-Mobile thus sought a special use permit.  At the hearing, T-Mobile presented testimony and evidence demonstrating its need to fill a gap in coverage, justification for the selection of that site and the height of the pole, an explanation of how the facility would provide for collocating equipment for other cellular carriers, and a representation that the facility would have a minimal visual impact. Several members of the public  spoke in opposition to granting the special land use. The areas to the north, east, and west of the proposed site were residential subdivisions, and there was a daycare center to the south. At the hearing, the Township Planning Commission passed a motion to recommend to the Board of Trustees of the Township that T-Mobile’s application should be denied.  At the Trustees’ hearing T-Mobile contended that 90 feet would be the minimum height necessary to collocate two other carriers.  More people spoke in opposition.  The Township denied T-Mobile’s application. T-Mobile brought suit, alleging that the denial of the application violated the Telecommunications Act, 47 U.S.C. § 332 et seq. The district court granted partial summary judgment in favor of T-Mobile, and the Township appealed to the 6th Circuit Court of Appeals.

47 U.S.C. § 332(c)(7)(B)(iii) provides: “Any decision by a State or local government or instrumentality thereof to deny a request to place, construct, or modify personal wireless service facilities shall be in writing and supported by substantial evidence contained in a written record.”  The Court of Appeals found the relevant question to be “substantial evidence of what?”  In other words, if there is a denial of an application to build a wireless facility, what must the substantial evidence in the record show in order to avoid a violation of the federal code? The Court chose to follow a decision from the 9th Circuit, stating that this standard “requires a determination whether the zoning decision at issue is supported by substantial evidence in the context of applicable state and local law.” The Court “may not overturn the Board’s decision on ‘substantial evidence’ grounds if that decision is authorized by applicable local regulations and supported by a reasonable amount of evidence.”  Nonetheless, the 6th Circuit proceeded to find that none of the five reasons for denial stated by the Board of Trustees were supported by substantial evidence; rather, each was simply an expression of NIMBYism or lay opinion contradicted by expert opinion.

47 U.S.C. § 332(c)(7)(B)(i)(II),  provides that “[t]he regulation of the placement, construction, and modification of personal wireless service facilities by any State or local government or instrumentality thereof shall not prohibit or have the effect of prohibiting the provision of personal wireless services.”  Does the denial of a single application from T-Mobile constitute an effective prohibition? This was a question of first impression for the 6th Circuit.  It again looked to other federal circuit courts for guidance.  The 4th Circuit has held that only a general, blanket ban on the construction of all new wireless facilities would constitute an impermissible prohibition of wireless services; however, the large majority of circuits have rejected this approach.  The 6th Circuit rejected it as well, stating that such a reading makes the “effective prohibition” language meaningless if an it can only be triggered by an actual ban.  The 6th Circuit chose instead to follow the two-part test of the 9th Circuit: there must be (1) a showing of a ‘significant gap’ in service coverage and (2) some inquiry into the feasibility of alternative facilities or site locations.”

As for the first part of this test – whether whether the “significant gap” in service focuses on the coverage of the applicant provider (T-Mobile in this case) or whether service by any other provider (Verizon, AT&T, Sprint, etc.) is sufficient – the 6th Circuit again found a split among federal circuit courts.  The 2nd,  3rd and 4th Circuits have held that no “significant gap” exists if any “one provider” is able to serve the gap area in question. On the other hand, the 1st and 9th Circuits have rejected the “one provider” rule and adopted a standard that considers whether “a provider is prevented from filling a significant gap in its own service coverage.  In 2009, the FCC issued a Declaratory Ruling that effectively supported the approach of the First and Ninth Circuits.  The 6th Circuit chose to follow the FCC’s lead.  Finding that T-Mobile’s position that it suffered a significant gap in coverage to be well-supported by documentary evidence and testimony from RF engineers,  it concluded that the denial of T-Mobile’s application “prevented [T-Mobile] from filling a significant gap in its own service coverage.”

As for the second part of the test (alternative facilities) The 2nd, 3rd and 9th Circuits require the provider to show that ‘‘the manner in which it proposes to fill the significant gap in service is the least intrusive on the values that the denial sought to serve.’’  The 1st and 7th Circuits, by contrast, require a showing that there are ‘‘no alternative sites which would solve the problem.’’  The 6th Circuit chose to fall in line with the 2nd, 3rd and 9th “It is considerably more flexible than the ‘no viable alternatives’ standard, as [under the other standard] a carrier could endlessly have to search for different, marginally better alternatives. Indeed, in this case the Township would have had T-Mobile search for alternatives indefinitely.”  The Court found that T-Mobile satisfied its burden under the “least intrusive” standard, having investigated a number of other specific options but determining they would have been “significantly more intrusive to the values of the community.”

Having determined that the Township’s decision had the “the effect of prohibiting the provision of personal wireless services,” thus violating 47 U.S.C. § 332(c)(7)(B)(i)(II), the 6th Circuit affirmed the decision of the district court.

cell towers, Federal courts , ,

Landowner prevails on First Amendment retailiation claim for Township’s stop work order

August 16th, 2012

by Victoria Heldt

George T. Paeth, Margaret C. Paeth v. Worth Township (Michigan)
(United States Sixth Circuit Court of Appeals, June 8, 2012)

George and Margaret Paeth own a house in Worth Township, Michigan that was not in compliance with the Township’s five-foot setback requirement when they purchased it in 1998.  They made plans to add on to the first floor and replace the roof, which would expand the house’s footprint in the northeast and northwest corners.  After communication with Barbara Cutcher, Worth Township’s zoning administrator, the property was surveyed.  The Paeths received a land use permit from the Township in April 1999 and a building permit from the County building department in June 1999.  In 2002 the Township formed a building department, which assumed the responsibilities of the County’s building department.  Cutcher became the Township’s zoning and building administrator.

In June 2004, Cutcher sent a letter to the Paeths informing them that their house was not in compliance with the setback ordinance.  It instructed them to contact zoning administrator Lynn Laughlin to address the “serious problem.”  The Paeths submitted a variance application and Laughlin requested another property survey.  The survey showed that the 1999 survey underestimated the distance between the house and the property line.  The Township claimed that, due to the survey error, Cutcher relied on false information when she originally granted the permit.  The Zoning Board of Appeals (ZBA) voted to deny the variance, meaning the Paeths would have to correct the variance by removing portions of the house.

The matter was taken to the circuit court on three different occasions.  The circuit court eventually reversed the decision of the ZBA and granted the variance to the Paeths.  The Township appealed the case to the Michigan Court of Appeals, which dismissed the claim for lack of jurisdiction in July 2007.  In November 2007 Cutcher posted a stop work order on the Paeth’s property until they obtained a new permit.  The Paeths did not receive the required hearing before the order was posted.

Cutcher claimed that, had the Paeths requested a new permit, the matter would have been resolved quickly.  Instead, the Paeths contacted the State of Michigan Office of Local Government and Consumer Services to determine whether their 2003 permit was valid.  It concluded that it was and that the Paeths could continue work so long as their activities complied with code.  Cutcher wrote the Paeths a letter confirming the valid permit but insisting that she be allowed to inspect the property for code compliance before the Paeths complete any more work on their property.  The Paeths failed to contact her and the stop work order remained on the property until October when it was removed pursuant to a district court order.

In September 2008 the Paeths sued the Township in federal district court on four counts:  (1) violation of their First Amendment rights when Cutcher and the Township retaliated against them for appealing the ZBA’s variance decision; (2) violation of the Equal Protection Clause; (3) violation of substantive and procedural due process because of the issuance of the stop work order without notice or an opportunity to respond; and (4) a request for mandamus and superintending control.  After a five day trial, the court ruled in favor of the Paeths on the First Amendment claim.  It ruled in favor of the Township on count two and on the substantive due process claim in count three.  In regards to the procedural due process claim, the court also ruled in favor of the Paeths.  It noted that the Paeths have “a property interest in continuing construction on their home” and that the Township’s stop work order without the necessary prior notice deprived them of it.  It concluded that the stop work order was contrary to state law and constituted a procedural due process violation.  The court determined count four to be moot.  The Paeths were granted a little more than $200,000 in attorneys fees.

The Township appealed the procedural due process violation.  The Court noted that it is not necessary to determine if the Paeths had a property interest in the construction to determine if a procedural due process violation exists.  Procedural due process claims do not answer to local statutes or ordinances; rather a federal framework consisting of three factors must be considered to make the determination.   The Court analyzed (1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used and the probable value, if any, of additional or substitute procedural safeguards; and (3) the Government’s interest.

The Court determined there was not a due process violation.  The Paeths were given sufficient due process since the order came with instructions for how to apply for a new permit.  The process to apply for a new permit is relatively simple and the Paeths would have been only mildly inconvenienced.  In addition, the Government’s interest in the matter was fairly significant.  A fair amount of time had passed since the property was last inspected and evidence existed that the house was not in compliance with code.  The Township had a rightful interest in preventing any work that might further the property’s non-compliance.  The Court reversed the ruling and vacated the damages associated with it.

The Township also appealed the First Amendment ruling, arguing that the evidence was insufficient to prove a violation took place.  It purported that the “adverse action” and “causal connection between the action and protected conduct” requirements of a retaliation claim were not met.  The Court disagreed, concluding that the Township’s issuance of the stop work order and failure to provide notice constituted adverse actions.  Furthermore, sufficient evidence was presented to show a causal connection between the adverse action and the right to appeal the ZBA’s decision.  Testimonies from Cutcher and a member of the ZBA supported the connection.  The Court affirmed the lower court’s ruling on this claim as well as the damages for the violation and the attorneys fees.

Due Process, Federal courts, First Amendment claims, Uncategorized, Zoning enforcement , , , ,

Filling sinkhole not an allowable activity under TNC conservation easement

July 30th, 2012

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 ,

St. Louis’s definition of ‘sign’ unconstitutionally content-based

January 16th, 2012

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 , ,

Consent judgment in TCA case broader than necessary to remedy violation

December 15th, 2011

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 ,