Church entitled to restore prayer trail because denial likely to be proven to be a substantial burden on religious exercise under RLUIPA

Gary Taylor

by Gary Taylor

Catholic Healthcare International v. Genoa Charter Township (MI)

Federal 6th Circuit Court of Appeals, September 11, 2023

Catholic Healthcare International wanted to create a prayer trail with 14 “Stations of the Cross” on a wooded 40-acre property it owns in Genoa Charter Township. No part of the prayer trail would be visible from outside the property. A few miles away, in Fillmore County Park, the Township had created a 15-station reading trail of its own, with large signs telling the tale of “Leopold the Lion.” The Township considered the prayer trail to be a church building, for which the following special use permit application items would be required:

  • Completed Special Land Use Application.
  • Completed Site Plan Review Application.
  • $2,875.00 Special Land Use/Site Application Fee.
  • Four (4) Sets of Site Plans (folded) that comply with the applicable
    requirements found in the Site Plan Review Application.
  • Four (4) copies of an Environmental Impact Assessment.

At considerable expense, Catholic Healthcare submitted two unsuccessful applications. Catholic Healthcare moved forward anyway, creating the prayer trail as designed. The Township demanded the removal of the Stations of the Cross, plus a stone altar and mural. Catholic Healthcare did not comply with that demand; instead, given the Township’s insistence on treating the prayer trail as a church, plaintiffs decided to expedite their longer-term plan to seek approval for an actual church building. The Township Planning Commission approved the plan for a 95-seat, 6,090 square foot church with associated parking lot, lighting and outdoor accessory structures, but the Township Board denied the request and renewed its demand that the prayer trail be removed.

The rest of the facts are unclear even to the Court of Appeals. The salient point is that at some point a group of church volunteers physically removed all the religious displays from the prayer trail, and at some later point Catholic Healthcare sought a preliminary injunction to restore the Stations of the Cross, altar, and mural, claiming that, as applied to them, the Township’s zoning ordinance violated the federal Constitution, the Religious Land Use and Institutionalized Persons Act (RLUIPA), and the Michigan Constitution. The district court twice denied that request, holding that its free-exercise and statutory claims are unripe.

The Sixth Circuit reversed, stating that in land-use cases, claims are “ripe” when the government has adopted a “definitive position” as to “how the regulations at issue apply to the particular land in question.” Here, the Township has uniformly insisted that Catholic Healthcare obtain a special land-use permit and has twice refused to grant a permit. Those events have “inflicted an actual, concrete injury” because the Township has actually forced them to remove the religious displays. Catholic Healthcare showed that it can likely prove that the Township has imposed a “substantial burden” on its religious exercise, and that the Township failed to use the “least restrictive means of furthering a compelling interest” as required by RLUIPA. Because Catholic Healthcare is likely to succeed on the merits of its claim under RLUIPA, the preliminary injunction requested by Catholic Healthcare should be granted.

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Plaintiffs’ inverse condemnation claim survives summary judgment on allegations that state control of water levels behind private dam that collapsed constitutes public use

Gary Taylor

by Gary Taylor

David Krieger, et al., v. Department of Environment, Great Lakes, and Energy

Michigan Court of Appeals, September 7, 2023

In this 37-page opinion, 20 pages of which were dedicated to simply listing all the litigants, the Michigan Court of Appeals addressed the question of whether plaintiffs’ adequately stated a claim in their pleadings for inverse condemnation against the Michigan Department of Environment, Great Lakes, and Energy (DEGLE) for the failure of the Edenville Dam in 2020. Plaintiffs’ alleged that the actions of DEGLE in the years prior contributed to the failure. The court’s opinion simply dealt with the adequacy of plaintiffs’ pleadings, but provides

The Edenville dam was built in 1924 to hold back water from the Tittabawassee and Tobacco Rivers for hydroelectric power. Boyce Hydro Power, LLC (Boyce) purchased the dam in 2004 and acquired a license from the Federal Energy Regulatory Commission (FERC) to operate the dam to generate hydroelectric power. FERC made repeated requests of Boyce to ubgrade the dam because it was not structurally adequate and its spillway capacity was inadequate in the event of a “Probable Maximum Flood,” defined as the flood that may be expected from the most severe combination of critical meteorologic and hydrologic conditions reasonably possible in the drainage basin in question. After years of unaddressed regulatory violations, FERC revoked Boyce’s federal license in September 2018, at which point the dam fell under the oversight of DEGLE and the Michigan Department of Natural Resources (DNR). Within days experts conducted a cursory inspection and found the Edenville dam to be in fair structural condition, but that inspection was not intended to determine whether the dam met safety standards. A group called Four Lakes Task Force petitioned the circuit court to establish a legal water level for the lake formed by the dam (Wixom Lake), and the court set the lake level at that previously required by FERC. Despite the establishment of this level, and the rejection by DEGLE of a request by Boyce to draw down the lake level, Boyce lowered the lake level anyway. in April 2020, DEGLE issued Boyce a permit to restore the lake to its previous level, and conditioned the permit on Boyce maintaining high water levels even though, as plaintiffs’ alleged, Michigan regulators knew about the dam’s inadequate spillway, overall deterioration, and need for repairs. Then on May 19, 2020 the Edenville dam failed, resulting in the failure of the Sanford dam and damage to two other dams, forcing the evacuation of thousands of residents, and resulting in devastating flooding and property damage to nearby residents.

We will jump straight to the discussion concerning inverse condemnation. Citing previous precedent, the Court of Appeals stated that “a plaintiff alleging a de facto taking or inverse condemnation must establish (1) that the government’s actions were a substantial cause of the decline of the property’s value, and (2) that the government abused its powers in affirmative actions directly aimed at the property.” Although the state departments challenged element (1) on summary disposition, they did not renew that argument on appeal.

Affirmative actions directed at plaintiffs’ properties. The court looked at several past cases to determine what constitutes “affirmative actions” in this context. Common among these cases was a holding that “inaction and omissions by the state” could not sustain a takings claim. For example, the court in 2004 found the state did not take “affirmative action” when a fire that spread from an abandoned house that the state acquired through tax delinquency proceedings damaged a neighboring property. “At most, the state failed to abate a fire-hazard nuisance.” The court concluded, however, that in the present case the plaintiffs’ sufficiently pleaded affirmative actions taken by the state that were aimed directly at plaintiffs’ properties. First, plaintiffs’ alleged that the state knew about the dams inability to withstand significant rainfall and that its deteriorated condition posed a danger to downstream owners. Second, plaintiffs’ alleged that the state actively prevented repair efforts and threatened enforcement action if the lake levels were drawn down. Finally plaintiffs’ claimed that the state concealed risks posed by the dam and acted to raised the lake to dangerous levels in disregard of those risks in order to improve environmental conditions in the lake. If proven at trial, these allegations would constitute affirmative actions; they would demonstrate “more than mere regulatory actions such as issuing or denying a permit.” Contrary to the state’s assertion that Boyce was responsible for raising lake levels, the court found that the state’s action in authorizing and requiring Boyce to raise lake levels was, if proven true, sufficient affirmative action to sustain a taking claim.

Public use. The state agencies also argued that plaintiffs’ inverse condemnation claims fail because the state did not put plaintiffs’ property to a public use. In contrast, plaintiffs alleged that defendants exercised control over the Edenville Dam so much so that their use of the dam constituted a public use. The court determined the relevant question to be “whether defendants took plaintiffs’ property by controlling the operation of the dam for a public use, not whether plaintiffs’ property—once taken—would be put to a public use.” If proven to be true at trial, by pressuring Boyce to keep water levels high to protect aquatic life, prioritizing that interest at the expense of the safety of people and property, the state agencies through their operational control of the dam, put the dam to a public use in their pursuit of environmental protection. When allegations are made that the government—acting along with a privately owned dam operator—took affirmative steps that caused the dam to fail and damaged downstream property owners, Michigan’s takings clause provides a remedy.

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Active extraction of aggregate required to prove continuance of nonconforming quarry

Gary Taylor

by Gary Taylor

Dakota Constructors, Inc., v. Hanson County Board of Adjustment

South Dakota Supreme Court, July 26, 2023

Hanson County, adopted its first (it appears from the opinion) zoning ordinance in April 2000. In 2021, Dakota Constructors, Inc. (Dakota) purchased a quarry located in Hanson County that had operated since 1986 under a state license to mine sand, gravel, and rock. After the purchase, the Hanson County Zoning Administrator advised Dakota Constructors that because the quarry is located in a district that is currently zoned as agricultural, it would need a conditional use permit (CUP) in order to extract sand, gravel, and rock from the site. Dakota submitted a CUP application but argued before the Hanson County Board of Adjustment (Board) that it did not need a CUP because the operation of the quarry was a continuing prior nonconforming use. Dakota provided documents and statements concerning the operation at the quarry dating back to 1986; specifically, that material had been hauled from the site continuously since 1986. The submissions also showed, however, that all the materials hauled from the site since 2004 had been extracted from the ground prior to 2004; that is, no aggregate had been mined from the quarry from 2004-2021. A scientist from the South Dakota Department of Agriculture and Natural Resources Mineral and Mining Program explained in a February 2022 email exchange with the county zoning administrator that “[m]ining is not defined in statute under [SDCL chapter 45-6 (addressing sand, gravel and construction aggregate mining)]. We have always gone with the extraction of sand, gravel, or rock from the ground as mining. Thus the removal of stockpiled material is not considered mining.” Based on this evidence, the Board concluded that the previous mining operation had ceased for more than one year, and that as a result a CUP would be necessary for Dakota to proceed with its operation.

As part of the fact finding related to the CUP hearing, the Board received a report from an engineering firm providing recommendations for stabilizing a portion of the quarry that was impacting the integrity of a nearby County road. A slump undermining the fence had come within fifteen feet of the guardrail, and the ground was eroded up to the fence in four other locations. The estimated cost of the repairs to prevent damage to the County road was $620,500.

The Board approved the CUP and established conditions for use of the quarry, including repair of the erosion near the road, before commencing blasting. Dakota filed a petition for writ of certiorari with the circuit court, which the circuit court denied, stating that Dakota “did not meet its burden in showing the Board acted fraudulently or in an arbitrary or willful disregard of undisputed and indisputable proof in its determination that Dakota Constructors needed a [CUP] . . . .”

Dakota appealed to the South Dakota Supreme Court. As the court stated it, “[Dakota’s] argument is essentially that the nonconforming use of the property is being a ‘quarry,’ and because the property was never reclaimed it never ceased to meet the definition of quarry.” On the other hand, the Board focused on the term in the zoning ordinance that permitted “extraction of sand, gravel, or minerals” in the agricultural district with a CUP. The Board contended that the operation had clearly ceased to extract aggregate for more than one year.

State law provides in relevant part that “[t]he court shall give deference to the decision of the approving authority in interpreting the authority’s ordinances.” Even before this statutory language became effective in 2018, the court had employed a judicially-created deference: “[i]n passing on the meaning of a zoning ordinance, the courts will consider and give weight to the construction of the ordinance by those administering the ordinance.” The court found no fault with the Board’s focus on the term “extraction” in interpreting its own ordinance, and concluding that mere hauling away of previously extracted aggregate did not constitute the continuance of the mining operation. Furthermore, continuing to hold a mining permit does not, in itself, establish that a prior nonconforming use was continuing; it merely “provided the authority to conduct mining activities if it chose to do so.”

Conditional Uses/Special Uses, Non-Conforming Uses, Quarrying/Non-metallic mining, South Dakota courts , , ,
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Local historic preservation commission does not have discretion to decide appropriate permit for demolition of non-historic building in historic district

Gary Taylor

by Gary Taylor

Lehman Investment Co., LLC, v. City of the Village of Clarkston and Clarkston Historical District Commission

Michigan Court of Appeals, August 17, 2023

In June 2017, Lehman Investment Company, LLC (Lehman) requested permission to demolish a residential structure in the historic district of the city of the Village of Clarkston (city). The structure is a vacant home and detached garage in the city’s historic district. The historic district where the home is situated was listed on the National Register of Historical Places in 1980. It is comprised of over 100 buildings dating from approximately 1825 to 1949. This time period, when the core of the town grew to accommodate lumber mills and the processing of grain from surrounding farms, is considered a “period of significance” for historical purposes. The homesite was purchased by local business owner Ethan Hawkin 1949, and the home and garage were constructed in 1953. Because the buildings were constructed after 1949, which was the tail end of the district’s period of significance, they are considered nonhistorical, or a “non-contributing resource,” for purposes of the historic district. Although the property is a non-contributing resource it is nonetheless subject to the Commission’s oversight because it is within the boundaries of a historic district, and anyone seeking to work on the property must go through the permitting process set forth in Michigan’s local historic districts act (LHDA), M.C.L. 399.201 et seq. Specifically, M.C.L. 399.205 provides in part (with emphasis added):

(1) A permit shall be obtained before any work affecting the exterior appearance of a resource is performed within a historic district…. The person…proposing to do that work shall file an application for a permit with the…commission….A permit shall not be issued and proposed work shall not proceed until the commission has acted on the application by issuing a certificate of appropriateness or a notice to proceed as prescribed in this act.

….

(3) In reviewing plans, the commission shall follow the United States secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, as set forth in 36 C.F.R. part 67. Design review standards and guidelines that address special design characteristics of historic districts administered by the commission may be followed if they are equivalent in guidance to the secretary of interior’s standards and guidelines and are established or approved by the department. The commission shall also consider all of the following:

(a) The historic or architectural value and significance of the resource and its relationship to the historic value of the surrounding area.

(b) The relationship of any architectural features of the resource to the rest of the resource and to the surrounding area.

(c) The general compatibility of the design, arrangement, texture, and materials proposed to be used.

(d) Other factors, such as aesthetic value, that the commission finds relevant….

….

(6) Work within a historic district shall be permitted through the issuance of a notice to proceed by the commission if any of the following conditions prevail and if the proposed work can be demonstrated by a finding of the commission to be necessary to substantially improve or correct any of the following conditions:

(a) The resource constitutes a hazard to the safety of the public or to the structure’s occupants.

(b) The resource is a deterrent to a major improvement program that will be of substantial benefit to the community and the applicant proposing the work has obtained all necessary planning and zoning approvals, financing, and environmental clearances.

(c) Retaining the resource will cause undue financial hardship to the owner when a governmental action, an act of God, or other events beyond the owner’s control created the hardship, and all feasible alternatives to eliminate the financial hardship, which may include offering the resource for sale at its fair market value or moving the resource to a vacant site within the historic district, have been attempted and exhausted by the owner.

(d) Retaining the resource is not in the interest of the majority of the community.

Lehman’s application listed “redevelopment” as the reason for the proposed project. The Clarkston Historic District Commission (Commission) held three hearings on the project, and on August 29, 2017 issued a formal denial indicating that the application did not meet the secretary of the interior’s standards for issuance of a certificate of appropriateness under M.C.L. 399.205(3). Lehman appealed the decision to the Review Board, which assigned the matter to an Administrative Law Judge (ALJ). The ALJ reversed the Commission’s decision because “no testimony was provided…to support any claim that the instant property had any relationship to the historic value of the surrounding area or…any independent historic value….” Then the Review Board, who had final say on whether demolition could move forward, adopted the ALJ decision in part but remanded for further examination because the ALJ “failed to address that a commission can also review a request for work in an historic district on a non-historic, non-contributing resource….”

I could write another 1,000 words explaining the procedural boomeranging and torturous statutory interpretation prior to the Court of Appeals getting jurisdiction over the case, but instead I will focus on how the court sorted it out. You just need to know at this point that Lehman appealed because he was denied the permit to demolish.

Lehman contended it was inappropriate to require it to proceed under the notice to proceed standard (note: under which it would be tougher for Lehman to get permission to demolish) because it sought to demolish a building of non-significance; however, the court interpreted several sections of the LHDA to conclude otherwise. MCL 399.201a specifically defines “certificate of appropriateness” and “notice to proceed.” Subsection (b) of the statute defines “certificate of appropriateness” as “the written approval of a permit application for work that is appropriate and that does not adversely affect a resource[,]” whereas Subsection (n) defines “notice to proceed” as “the written permission to issue a permit for work that is inappropriate and that adversely affects a resource, pursuant to a finding under [MCL 399.205(6)].” In addition, a “resource” includes “1 or more publicly or privately owned historic or nonhistoric buildings, structures, sites, objects, features, or open spaces located within a historic district, while “work” encompasses “construction, addition, alteration, repair, moving, excavation, or demolition.” Complete destruction of a “resource” (defined to include nonhistoric buildings) is by definition harmful to the resource, according to the court. Consequently, it is plain that the Commission does not have absolute discretion to decide whether to issue a certificate of appropriateness or a notice to proceed, and Lehman’s work falls under the requirement for a notice to proceed.

With that decided, the court addressed Lehman’s argument that the Administrative Law Judge (ALJ) who heard the appeal from the Commission need not remand the matter to the Commission for reconsideration of Lehman’s application (note that previously the ALJ ruled in Lehman’s favor). The court disagreed, noting that the Commission failed to consider the specific criteria applicable to a notice to proceed, and thus the evidence collected would be insufficient for the ALJ to make a determination based on those criteria. Specifically, despite Lehman’s contention that the community’s interest in retaining the property had been “fully vetted” by the Commission, the record provided no evidence as to the the community’s interest in retaining the structure; in fact, at least three citizens made public comments opposed to demolition of the structures. Accordingly, Lehman failed to show error requiring reversal of the ALJ’s ruling against him, and moreover, did not show that the circuit court abused its discretion in affirming that ruling.

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Rural water district could not prove ability to provide or make available water service in disputed area

Gary Taylor

by Gary Taylor

Washington County Water Co., v. City of Sparta, Illinois

Federal 7th Circuit Court of Appeals, August 8, 2023

The Agriculture Act of 1961 authorized the United States Department of Agriculture (USDA) to provide loans to rural water associations to decrease the cost and ensure an adequate supply of safe water for farmers and other rural residents. To ensure that these associations could repay their loans, Congress enacted 7 U.S.C. § 1926(b), which prohibits municipalities and others from selling water in an area that a USDA-indebted rural water association has “provided or made available” its service. To be entitled to protection under § 1926(b), the rural water association must have the physical capability to provide service to the disputed area and a legal right to do so under state law.

Washington County Water Company (WCWC) is a rural water association that sells potable water to several counties in southern Illinois. The Village of Coulterville is adjacent to these counties. In 2019, due to the deteriorating state of its water treatment facility, Coulterville explored the possibility of buying water from either WCWC or the City of Sparta. Coulterville ultimately decided to buy water from Sparta because it was not convinced that WCWC could provide enough water to satisfy its residents’ demands. When WCWC learned of this decision, it filed a complaint in federal district court alleging that § 1926(b) prohibited Sparta from selling water to Coulterville because WCWC had “made its service available” to Coulterville. The district court granted summary judgment in favor of Sparta, holding that WCWC was not entitled to § 1926(b) protection because WCWC did not have a legal entitlement to provide water to Coulterville under Illinois state law. WCWC appealed to the Seventh Circuit.

Because the Seventh Circuit had not explicitly addressed the question of how to determine when an association has “provided or made available” service to a certain area, it looked to other federal circuits’ opinions. Every other circuit has adopted some variation of the “physical capability” test: a two-pronged test that asks (1) whether the association had “water pipes either within or adjacent to the disputed area before the allegedly encroaching association begins providing service to customers in the disputed area,” and (2) whether the association has the “legal right under state law to provide water to the disputed area. In this case the Seventh Circuit focused on the “legal right under state law” question. The Illinois Environmental Protection Agency (IEPA) – the state agency regulating water service – mandates that a water service provider’s system “must be designed to produce at least 20 percent greater than [its] maximum average daily demand ….” in order to establish a right to provide service to a given area. The district court calculated WCWC’s maximum average daily demand to be 1,608,297 gallons per day. After adding the required 20 percent reserve WCWC needed to be “designed to produce” at least 1,929,956 gallons per day, and the district court concluded WCWC could not meet this standard.

The case eventually turned on the meaning of “designed to produce” under Illinois administrative regulations. The Seventh Circuit concluded that “designed to produce” must refer to the water association’s ability to furnish sufficient water to residents, whether it treats its own water or purchases it from others. For WCWC, this meant that the Court looked at its pumping capacity as limited by its contractual capacity, “after all, WCWC cannot pump what it cannot buy.” To interpret “designed to produce” as referring only to pumping capacity, a water association would be entitled to § 1926(b) protection even if they cannot purchase sufficient water to pump through those systems to meet demand. After reviewing the parties’ disagreements about WCWC’s pumping and contractual capacities, the Court concluded that WCWC could not meet the “20 percent greater than [its] maximum average daily demand” requirement. In doing so the Court dismissed WCWC’s contention that it could buy more water from its contractual suppliers within a reasonable time because WCWC provided no tangible evidence of this during discovery.

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Plaintiff cannot establish Section 1983 claim for erroneous application of solid waste ordinance

Gary Taylor

by Gary Taylor

Kiefer v. Isanti County, Minnesota

Federal 8th Circuit Court of Appeals, June 29, 2023

Kieth Kiefer moved onto a 53-acre parcel in Isanti County in 1992, and purchased the property in 1996. Shortly after moving onto the property he began to use approximately one acre to store scrap and other unwanted items, including “unlicensed vehicles, piles of scrap metal, tin, old furniture, old building material….” and many other items of junk. After receiving a citizen complaint, the County sent Kiefer several letters notifying him that his use of the property violated local law. Kiefer did not respond. Eventually, on November 19, 2008 the County cited Kiefer with a zoning code violation. Then, on December 22, 2008 the County filed a two-count criminal complaint charging Kiefer with (1) violating the county zoning code, and (2) violating the county solid waste ordinance. The county eventually dropped the zoning violation charge and proceeded to trial on the violation of the solid waste ordinance. A jury convicted Kiefer, and he was sentenced to 90 days in jail, 60 of which he served.

In March 2011, the County filed a civil action in Minnesota state court alleging that Kiefer was again violating the County’s zoning and solid waste ordinances. Kiefer responded, this time asserting the County had misinterpreted and misapplied the law. Following a bench trial, the state district court ruled in favor of the County. The Minnesota Court of Appeals reversed, concluding that the solid waste ordinance only applies to commercial or industrial operations. The Court of Appeals recognized that Kiefer’s current use of the property was not permitted under the zoning code but remanded for a determination on whether Kiefer’s use was a permissible preexisting nonconforming use, as the property was zoned as agricultural at the time of his purchase in 1996. On remand, the Minnesota district court found Kiefer in violation of the zoning code. The Minnesota Court of Appeals affirmed.

On July 31, 2018, Kiefer petitioned in state court for postconviction relief, seeking to vacate his criminal conviction after the Court of Appeals found the solid waste ordinance inapplicable. On October 8, 2018, Kiefer’s petition was granted. His conviction was vacated, and the clerk was ordered to refund the fine, court costs, and court fees imposed and paid by Kiefer. Two years later, Kiefer filed this federal lawsuit under 42 U.S.C. § 1983, claiming unlawful seizure and violations of his due process rights, along with state law claims for false imprisonment, malicious prosecution, and abuse of process. The district court dismissed the case after determining Kiefer failed to sufficiently plead the County had violated his rights. Kiefer appealed.

A plaintiff may establish municipal liability under 42 U.S.C. § 1983 if the violation resulted from (1) an official municipal policy, (2) an unofficial custom, or (3) a deliberately indifferent failure to train or supervise. Kiefer raised claims related to official policy and unofficial custom.

Official policy. The Sixth Circuit dispatched with Kiefer’s “official policy” claim because he only argued that the solid waste ordinance was the official policy of the county for the first time on appeal, and further that the county prosecutor was the official with policymaking authority when in fact it is the County Board of Supervisors.

Unofficial custom. To demonstrate the County violated his rights through an “unofficial custom,” Kiefer must show: “(1) the existence of a continuing, widespread, persistent pattern of unconstitutional misconduct by the governmental entity’s employees; (2) deliberate indifference to or tacit authorization of such conduct by the governmental entity’s policymaking officials after notice to the officials of that misconduct; and (3) that plaintiff was injured by acts pursuant to the governmental entity’s custom, i.e., that the custom was a moving force behind the constitutional violation. Kiefer asserted that the County used the solid waste ordinance to allege criminal violations against individual the county knew the statute did not apply to. The Sixth Circuit found the claim to be nothing more than “threadbare recitals” supported by “mere conclusory statements” and not enough to raise a right to relief. Even if Kiefer sufficiently alleged a “continuing, widespread, persistent pattern,” the complain did not allege the County was in some manner deliberately indifferent after notice of a possible violation. Even after it was established that Kiefer should not have been prosecuted under the solid waste ordinance “the doctrine of substantive due process is reserved for truly extraordinary and egregious case; it does not forbid reasonable, though possibly erroneous, legal interpretation.” Without a constitutional violation, there can be no § 1983 liability.

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Agreement between Town and Village that dissolved Village board did not exceed authorization of Wisconsin boundary agreement statute

Gary Taylor

by Gary Taylor

City of Mayville, Wisconsin v. Village of Kekoskee and Town of Williamstown, Wisconsin (per curiam**)

Wisconsin Court of Appeals, July 20, 2023

**In Wisconsin, per curiam opinions may not be cited in any Wisconsin court as precedent or authority.

The Village of Kekoskee was incorporated in 1958 from territory that had previously been part of the Town of Williamstown. In 2015, the Village notified the Town that it was having difficulty seating a full Village board, and as a result, was considering dissolution. Representatives from the Town and Village met several times to explore their options and ultimately determined that the appropriate approach was to consolidate the territories of the Town and Village through a Cooperative Plan under Wis. Stat. sec. 66.0307, and in 2018, they did so. The plan was approved by the Wisconsin Department of Administration, but The City of Mayville filed suit challenging the approval because the plan purported to change the city’s boundary line. After the court sided with the City, the Village and Town went back to the drawing board and entered into a new agreement under a different statute, Wis. Stat. sec. 66.0301(6). Under their new agreement, when the Village adopts a “triggering ordinance” the boundary line between the Village and Town would be adjusted and a “major portion” of the Town’s territory would become part of the Village except for a remnant of four parcels totaling 163 acres. These four parcels had no residents and no public improvements, but after the adoption of the “triggering ordinance” the owners would be given 60 days to pursue procedures to annex to the City, to the Village, or to “demonstrate a willingness and ability to remain [an] independent [Town].” If “in the opinion of the Village” the owners have not demonstrated the willingness and ability to remain an independent Town then the Village would be entitled to annex the remnant parcels. The agreement also provided that after adoption of the triggering ordinance:

  • all real, personal, and intangible property of the Town, and all its assets and liabilities, become those of the Village.
  • the Town’s governing body transitions into the governing body of the Village, which would involve the sequential resignation of Village board members and the appointment of Town officials to fill these vacancies.

When, in 2021, the Village adopted a triggering ordinance, the City challenged the agreement, taking the position that the agreement effectuated a consolidation which was not authorized by Wis. Stat. 66.0301. The trial court sided with the Town and Village, and the City appealed.

The City made several arguments to the Wisconsin Court of Appeals. First, the agreement, rather than “determining” a common boundary line between two municipalities, in fact eliminated all boundary lines and thus effected a consolidation of the Town and Village. This, so argued the City, can only be accomplished through Wis. Stat. sec. 66.0229 or Wis. Stat. sec. 66.0230. The Court declined to address whether Wis. Stat. 66.0301 authorizes a complete consolidation of municipalities. Rather, it concluded that because four remnant parcels remained in the Town, a boundary line between the Town and Village also remains. It noted that Wisconsin courts have recognized that Wis. Stat. 66.0301 allows “major” boundary changes to occur via agreement. “The plain language of [the statute]… does not limit the scope of boundary changes to only ‘modest’ changes.”

Second, the City argued that just because the eventual absorption of the remnant parcels of the Town into the Village is set to occur in stages it does not alter the conclusion that a consolidation will eventually occur. The Court disagreed, noting that consolidation is not, in fact, a foregone conclusion, noting that the owners of the four parcels will still have the option to remain a Town.

Third, the City asserted that the physical transfer of territory is not the only indicator of municipal consolidation; rather, the Town and Village effectively consolidated through the resignation of Village board members and appointment of Town board members to fill their seats. The Court, however, noted that the agreement provided for the change in boundaries allowed under Wis. Stat. 66.0301, and it did not see how the changing of municipal governance in any way impacted this fact.

The Court dismissed other arguments made by the City as either being underdeveloped, or being raised for the first time at the Court of Appeals level (a no-no), and concluded that the City failed to show that the agreement was contrary to Wis. Stat. 66.0301.

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The duty to provide “reasonable accommodations” under the Fair Housing Act Amendments does not extended to alleviating downstream economic effects of a handicap.

Gary Taylor

by Gary Taylor

Klossner v. IADU Table Mound MHP, LLC and Impact MHC Management, LLC

Federal 8th Circuit Court of Appeals, April 10, 2023

Suellen Klossner has lived in a mobile-home park in Dubuque, Iowa, since 2009. The park is owned by IADU Table Mound MHP, LLC, which is controlled by Impact MHC Management, LLC (Impact). Tenants in the park pay rent for a lot where they can situate a mobile home. Klossner receives income from government programs that she used to pay her rent for ten years. She is unable to work full-time due to psychiatric and physical disabilities.

In 2019, the City of Dubuque approved a measure allowing the local public housing authority to provide residents of mobile-home parks with housing choice vouchers that could be used to supplement their rent payments. Under this voucher program, the federal government provides funds to local public housing agencies, which in turn may distribute them to low-income tenants. As the rent on Klossner’s lot increased, she received a voucher and sought to use it to supplement her rent payments, but the companies declined to accept the voucher. Federal law does not require landlords to accept housing choice vouchers, and Impact declines to do so except (1) where state law requires acceptance, or (2) where the company has purchased property where a prior owner accepted vouchers from a holdover tenant—a total of approximately forty tenants out of more than twenty thousand under Impact’s management. Impact cited the administrative burdens of accepting vouchers.

The FHAA makes it unlawful to discriminate in housing or make unavailable a dwelling “because of a handicap of [a] buyer or renter.” “Handicap” is a “physical or mental impairment which substantially limits one or more of such person’s major life activities.” “Major life activities” means “functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working.” The statute prohibits “a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford [a handicapped] person equal opportunity to use and enjoy a dwelling.” Klossner sued Impact and IADU Table Mound, alleging that the companies violated the Fair Housing Amendments Act by refusing to accept her voucher. Her theory was that she is a person with a “handicap” under the FHAA, and that the law required the companies to accept the housing voucher as a “reasonable accommodation” that was “necessary” to afford her “equal opportunity to use and enjoy a dwelling.”

The companies argued that although the FHAA calls for reasonable accommodations that directly ameliorate the effect of a handicap, the statute does not require a landlord to accommodate a tenant’s economic circumstances by accepting housing vouchers, and cited similar cases from the Federal 2nd and 7th Circuits in support of their defense. In the 2nd Circuit case the court reasoned that “the duty to make reasonable accommodations is framed by the nature of the particular handicap,” for example, providing a preferred parking space for tenants with difficulty walking, or lifting a no-pets rule to allow the use of a service dog by a blind person. The court concluded, however, that economic discrimination “… is practiced without regard to handicap,” and that the accommodation sought was not “necessary” to afford handicapped persons an “equal opportunity” to use and enjoy a dwelling. The court emphasized that the FHAA “does not elevate the rights of the handicapped poor over the non-handicapped poor,” and that “economic discrimination” is “not cognizable as a failure to make a reasonable accommodation” under the FHAA. In the 7th Circuit case a developer of a community designed for tenants using wheelchairs asked a municipality to grant a zoning variance to allow the construction of more structures on a plot of land, arguing that the proposed variance was necessary as a “reasonable accommodation” under the FHAA because it would reduce the cost of each housing unit, and thereby alleviate the economic impact of handicaps on prospective tenants who needed inexpensive housing. In rejecting the developer’s argument the 7th Circuit pointed out that if the reasonable accommodation provision required consideration of a tenant’s financial situation, then the statute would allow developers not only to ignore zoning laws, but also to obtain a “reasonable accommodation” that suspended a local building code that increased the cost of construction, or a minimum wage law, or regulations for the safety of construction workers. The statute did not call for these results, the court explained, because the duty of “reasonable accommodation” is limited to modifying rules or policies that hurt handicapped people by reason of their handicap, rather than by virtue of circumstances that they share with others, such as limited economic means.

The 8th Circuit found these cases persuasive in the present situation and ruled against Klossner. In interpreting the predecesor statute to the FHAA courts called for accommodations that provided the “direct amelioration of a disability’s effect,” but nothing in the law suggested that the duty of “reasonable accommodation” “extended to … alleviating downstream economic effects of a handicap.”

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SCOTUS narrows interpretation of “waters of the United States” subject to the Clean Water Act

Gary Taylor

By Gary Taylor

Sackett v. U.S. Environmental Protection Agency

United States Supreme Court, May 25, 2023

The Sacketts purchased property near Priest Lake, Idaho and began backfilling the lot with dirt to prepare for building a home. The Environmental Protection Agency (EPA) informed the Sacketts that their property contained wetlands, and that their backfilling violated the Clean Water Act (CWA). The CWA prohibits discharging pollutants into “the waters of the United States,” and the EPA classified the wetlands on the Sacketts’ lot as waters of the United States because they were adjacent to a ditch that fed into a creek, which fed into Priest Lake, a navigable, intrastate lake. The EPA ordered the Sacketts to restore the site, threatening penalties of over $40,000 per day. The Sacketts sued, alleging that the wetlands they were backfilling were not “waters of the United States.” The District Court entered summary judgment for the EPA, and the Ninth Circuit affirmed, finding that the CWA covers wetlands with an ecologically significant nexus to traditional navigable waters and that the Sacketts’ wetlands satisfy that standard.

The Supreme Court began with a recognition of the “persistent problem” federal agencies and courts have had in defining “the waters of the United States.” During the period relevant to this case, the two federal agencies charged with enforcement of the CWA—the EPA and the Army Corps of Engineers—similarly defined “the waters of the United States” to include “all . . . waters” that “could affect interstate or foreign commerce,” as well as “wetlands adjacent” to those waters. “Adjacent” was defined to mean not just “bordering” or “contiguous,” but also “neighboring.” Agency guidance instructed officials to assert jurisdiction over wetlands “adjacent” to non-navigable tributaries when those wetlands had “a significant nexus to a traditional navigable water.” A “significant nexus” was said to exist when “ ‘wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity’ ” of those waters. Field agents were told to consider a wide range of open-ended hydrological and ecological factors.

In the interest of preserving your patience I will cut to the chase. After a lengthy review of the history of the CWA, agency rule-making on the Act, and Supreme Court interpretations thereof, the Court rejected the agencies’ “significant nexus” test as including more than was the understood scope of the CWA. Under the agencies’ current rule, traditional navigable waters, interstate waters, and the territorial seas, as well as their tributaries and adjacent wetlands, are waters of the United States. Finding a significant nexus continues to require consideration of a list of open-ended factors. By the EPA’s own admission, nearly all waters and wetlands are potentially susceptible to regulation under this test, putting a staggering array of landowners at risk of criminal prosecution for such mundane activities as moving dirt.

The Court held that an interpretation of “navigable waters” that accords with how Congress has employed the term “waters” elsewhere in the CWA and in other laws is “only those relatively permanent, standing or continuously flowing bodies of water ‘forming geographic[al] features’ that are described in ordinary parlance as ‘streams, oceans, rivers, and lakes.’ ” The EPA’s insistence that “water” is “naturally read to encompass wetlands” because the “presence of water is ‘universally regarded as the most basic feature of wetlands’ ” proves too much. This does not mean that no wetlands could ever qualify as “waters of the United States.” Interpreting section 1344(g)(1) of the CWA, the Court concludes that for wetlands to be “included” within “waters of the United States,” these wetlands must qualify as “waters of the United States” in their own right, i.e., be indistinguishably part of a body of water that itself constitutes “waters” under the CWA, rather than be “adjacent to” “waters of the United States. Thus to be included the wetlands must have “a continuous surface connection to bodies that are ‘waters of the United States’ in their own right, so that there is no clear demarcation between where the waters end and the wetlands begin.

Because the Sacketts’ wetlands were merely “adjacent to” (in the sense that they are in the same neighborhood as) what is described as an “unnamed tributary” (on the other side of a 30-foot road) which feeds into a non-navigable creek, which, in turn, feeds into Priest Lake, a navigable water body, those wetlands are clearly distinguishable from any waters covered by the CWA.

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Seizure of proceeds of tax sale in excess of taxes owed constitutes a taking

Gary Taylor

by Gary Taylor

Tyler v. Hennepin County, Minnesota

United States Supreme Court, May 25, 2023

Ninety-four-year old Geraldine Tyler owned a condominium in Hennepin County, Minnesota, that accumulated $15,000 in unpaid real estate taxes, interest and penalties. Under Minnesota state law, the the County was allowed to seize the condo after three years because of the unpaid taxes. Hennepin County sold the condo for $40,000, and under Minn. Stat. sec. 282.08 the proceeds in excess of the tax debt and the costs of the sale ($25,000) were allowed to be kept by the county and split between the county, the town and the school district. Tyler filed suit, alleging that the County had unconstitutionally retained the excess value of her home above her tax debt in violation of the Takings Clause of the Fifth Amendment and the Excessive Fines Clause of the Eighth Amendment. The District Court dismissed the suit for failure to state a claim, and the Eighth Circuit affirmed. She appealed to the United States Supreme Court.

Standing to sue. The County alleged that Tyler lacked standing to bring the claim because she did not “disclaim the existence of other debts or encumbrances” on her home, namely, a $49,000 mortgage and a lean of $12,000 for unpaid homeowners’ association dues. The County argued that these encumbrances exceeded $25,000 and therefore she had no interest in, and suffered no real financial harm form the sale by the County. The Supreme Court disagreed, observing that in Minnesota a tax sale extinguishes all other liens on a property, so Tyler could have retained the excess and used it to reduce any such remaining liabilities.

Taking. Whether Tyler could claim a taking hinges on whether she had a property interest in the excess value of the condo. To answer this question the Court draws on “existing rules or understandings” about property rights, which includes state law, “traditional property law principles,” “historical practice” and Courts’ precedents. The County reasoned that Tyler had no property interest protected by the Takings Clause because in 1935, the State purported to extinguish that property interest by enacting a law providing that an owner forfeits her interest in her home when she falls behind on her property taxes. However, citing an 1884 Minnesota Supreme Court case, the Court noted that prior to 1935 Minnesota recognized that a homeowner whose property has been sold to satisfy delinquent property taxes had an interest in the excess value of her home above the debt owed. “Though state law is an important source of property rights, it cannot be the only one because otherwise a State could ‘sidestep the Takings Clause by disavowing traditional property interests’ in assets it wishes to appropriate.”

The Court went all the way back to the Magna Carta for “the principle that a government may not take from a taxpayer more than she owes.” “From the founding, the new Government of the United States could seize and sell only ‘so much of [a] tract of land . . . as may be necessary to satisfy the taxes due thereon.’” The Court noted that Minnesota was in the minority in seizing excess tax sale proceeds; most states and the federal government require excess value to be returned to the taxpayer whose property is sold to satisfy outstanding tax debt. The Court also noted that Minnesota law recognizes in many other contexts that a property owner is entitled to the surplus in excess of her debt, citing bank foreclosure on a mortgage and the collection of past due taxes on income or personal property as two examples.

The Court rejected the County’s argument that Tyler had no property interest in the surplus because she constructively abandoned her home by failing to pay her taxes. The Court stated that no precedent exists for concluding that a failure to pay taxes is itself sufficient to prove abandonment. “Abandonment requires the ‘surrender or relinquishment or disclaimer of’ all rights in the property.” “It is the owner’s failure to make any use of the property—and for a lengthy period of time—that causes the lapse of the property right…..The County cannot frame [the failure to pay property taxes] as abandonment to avoid the demands of the Takings Clause.”

The Court concluded that history and precedent dictate that, while the County had the power to sell Tyler’s home to recover the unpaid property taxes, it could not use the tax debt to confiscate more property than was due. Doing so effected a “classic taking in which the government directly appropriates private property for its own use.”

Property taxation, Takings, United States Supreme Court ,
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