Year: 2012

Michigan Right-to-Farm Act does not protect horses kept for personal use

by Kaitlin Heinen

Peggy Sue Brown v. Summerfield Township
(Michigan Court of Appeals,  August 23, 2012)

Peggy Sure Brown claimed that the Right to Farm Act (MCL 286.471) “preempts a township ordinance that prohibits her from keeping her horses on property less than one and a half acres.” The trial court, disagreed, finding that Brown was not engaged in a commercial farming operation.  She appealed.

The Right to Farm Act “states that a farm or farm operation must not be found to be a public or private nuisance if it conforms to ‘generally accepted agricultural and management practices’ (GAAMPs), according to policy determined by the state commission on agriculture. Local government may not enact or enforce an ordinance that conflicts with the Right to Farm Act or the GAAMPs.” (MCL 286.474(6)) So “any township ordinance, including a zoning ordinance, is unenforceable to the extent that it would prohibit conduct protected by the [Right to Farm Act],” which includes ordinances requiring minimum lot sizes.

The Right to Farm Act “preempts ordinances only to the extent that they impose restrictions on commercial farming operations,” which means that the Act does not apply to property owners who are not engaged in commercial operations for profit. A farm operation is defined “as activity conducted ‘in connection with the commercial production, harvesting, and storage of farm products.'” Brown referenced the subsection (MCL 286.472(b)) that mentions “the care of farm animals.” However, this subsection is listed in connection with possible farm activities conducted in a commercial operation. It is not an exception to the commercial requirement.

Brown offered no evidence that she kept her horses for profit (breeding, boarding, horse rides for fee, etc.). The Michigan Court of Appeals did not have to address  whether the farm operation provision creates a cause of action or provides a defense because the Right to Farm Act does not apply to Brown. The court  also did not have to address whether the farm operation provision applies to a new farming operation in property zoned as residential. The trial court rightly found it unnecessary to address the issues.

The Michigan Court of Appeals also held that the trial court rightly granted summary disposition on Brown’s substantive due process claim because the ordinance was not unreasonable.  The Court of Appeals affirmed the trial court on Brown’s equal protection claim as well, since she offered no evidence that she had been treated differently than any other person. The trial court’s decision was thus affirmed.

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

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.

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Time is now to register for the 2012 APA-Iowa Conference

Gary Taylor

The Iowa Chapter of the American Planning Association is pleased to announce this year’s annual conference.  It will be held October 31 – November 2 at the Gateway Hotel and Conference Center in Ames, Iowa.  This year’s conference theme, Emerging Planning Paradigms, will focus on the latest trends in planning practice.  Some of the tipics will include regional planning and cooperation, energy planning, sustainability, and politics in planning.  With nearly 20 sessions, the conference will provide many opportunities for AICP-certified planners to earn CM credits, including those elusive law and ethics credits.

For a full description of the conference educational opportunities, and to register on-line, go to http://www.iowa-apa.org.

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

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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.

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Greyhounds are dogs “normally associated with domestic enjoyment” under Dubuque County zoning code

Gary Taylor

by Gary Taylor

Zenner v. Dubuque County Board of Adjustment
(Iowa Court of Appeals, October 3, 2012)

In July 2003 when the Zenners planned to purchase property in Dubuque County, they requested a variance from the 500-foot setback requirement for kennels. They wanted to build the kennels with a 200-foot setback from the surrounding residences.  After consulting with the county attorney, the Dubuque County Zoning Administrator advised the Zenners that the Kennel would not be allowed in the A-1, Agriculture district.  The district allows kennels, except that “no kennel shall be allowed to harbor, breed, train, buy, sell, exchange or offer for sale any animal to be used solely for attack purposes nor any animal not normally associated with domestic enjoyment.”  The ordinance also lists examples of the types of animals prohibited: “Such ban shall include but shall not be limited to jungle cats, venomous snakes or other reptiles larger than four feet in length, pit bulls, coyotes, wolves, foxes, skunks, deer or other similar wild animals.”  Undaunted, the Zenners went ahead with their plans, purchased the property, and built a kennel that violated the setback requirements for kennels.  Learning of this, the zoning administrator notified the Zenners that they were in violation of the ordinance.  The Zenners appealed the violation to the Dubuque County Zoning Board of Adjustment, which upheld the zoning administrator’s violation.  The district court upheld the decision. An appeal to the Iowa Court of Appeals resulted.

Starting its analysis by noting that a court “construes zoning restrictions strictly in order to favor the free use of property,” the Court of Appeals concluded that the county attorney misinterpreted the county’s zoning ordinance.  The county attorney based his conclusion that the kennel was raising greyhounds  “not normally associated with domestic enjoyment” on the fact that the dogs were for commercial sale. However, the Court pointed out that the zoning ordinance identifies another type of kennel – “kennel, hobby” – that does not include commercial activity or breeding or sale for a consideration.  The implication is that use of the word “kennel” by itself could not be meant to exclude commercial kennels.  “Following the county attorney’s analysis could lead to a determination that any kennel raising dogs for show instead of as pets would not be permitted because it would be ‘a non-exempt commercial use.'”

To further support this conclusion the Court pointed to the existence of Iowa Code 99D.27 – which requires dog tracks to maintain a racing dog adoption program – as “evidence public policy and law in Iowa considers greyhounds to be normally associated with domestic enjoyment.”  The Court also noted that the only dog listed in the banned animals is “pit bull.”  According to the Court greyhounds “possess [none] of the characteristics associated with the litany of prohibited animals.”

The Court of Appeals found in favor of the Zenners, reversing the district court.

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US Supreme Court declines to hear Des Moines franchise fee case

Gary Taylor

Yesterday the US Supreme Court declined to hear the appeal of the city of Des Moines in its franchise fee case, blogged here.  The Iowa Supreme Court ruled in March that the city’s 5-percent fee on utility bills was beyond that allowable as reasonably related to the administration of electric and gas franchises, and that the excess must be returned to the people who paid it.

You can read the Des Moines Register article concerning yesterday’s action here.

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Covenants on homeowners in PUD are lawful and binding

Gary Taylor

by Gary Taylor

Wheeler v. Southport Seven PUD
(North Dakota Supreme Court, September 28, 2012)

In August 1997, the Southport Development Limited Liability Company filed an amended declaration for the Southport Development PUD Project I in south Bismarck.  The amended declaration states “[n]o portion of the subject project may be removed from the project by vacation or partition, except by the unanimous consent of all record title owners of all of the PUD lots and the holders of all mortgages which constitute mortgage liens upon the subject PUD lots and tracts.” The amended declaration also provides for a Southport association of owners, with each unit owner deemed a member of the association.

In September 2005, Wheeler purchased a home in Southport by warranty deed.   In 2005 and 2006, Wheeler paid Southport fees, dues, and assessments, including fees for snow removal and lawn care. Wheeler, however, was not satisfied with either the snow removal or the lawn care provided by Southport, and in about 2006, she sent a letter to the Southport association, indicating she no longer wanted, and would not pay for, snow removal or lawn care. Wheeler paid for snow removal on one occasion in 2007. In 2007, the Southport association initially filed a lien against Wheeler’s property for unpaid assessments, but later withdrew the lien because of a failure to send notice to Wheeler by certified mail. In 2008, Southport filed another lien on her property after notice was given by certified mail. That lien later was released when Wheeler paid funds into escrow.  In 2009, Wheeler commenced this action against Southport seeking relief from the imposition of dues, fines, and liens filed by Southport against her property and seeking damages for slander to title. Southport answered and counterclaimed for unpaid assessments. The district court ruled that Wheeler was obligated to pay assessments set by the association because her lot was within Southport PUD Project I and awarded Southport a judgment for $2,124.22. Wheeler appealed.

The North Dakota Supreme Court observed that a planned unit development or PUD is a specialized form of zoning ordinance.  Although zoning ordinances are not the same as restrictive covenants running with the land and binding subsequent purchasers, the court explained there is little real difference:

A covenant is a contract and an ordinance isn’t–though a PUD is very close to being a covenant because . . . it is the product of a deal between a developer and a municipality. No matter; a zoning ordinance has the same effect as a covenant because, unless worded to bind only the current owner, it limits the use of the land by whoever owns it, not just whoever owned it when the ordinance was enacted. . . . [A] zoning variance creates a restriction that runs with the land, just like a covenant; and there is no relevant difference between a variance and a PUD.

“As a matter of law, covenants for payment of annual assessments for operation of property owners associations are covenants running with the land,” which “may be enforced by subsequent assignees or successors in title to the original parties.” Deed restrictions and covenants are vital to the existence and viability of PUDs, and “if clearly established by proper instruments, are favored by definite public policy.”  The Court ruled that Wheeler could not opt out of payment of Southport’s annual assessments.  The Court also dismissed Wheeler’s claim that the amended declaration is a “contract of adhesion and contains oppressive and unconscionable terms, and that, as interpreted by the association and the district court, there is no enforcement of the duty on the part of Southport to provide any services.”  The Court reiterated that Wheeler’s obligations to Southport are imposed by the covenants running with the land and she is bound by the amended declaration’s relevant provisions by the purchase of her property within the development.

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Warrenton (MO) city building code applies to Warren County building

Gary Taylor

by Gary Taylor

Arden Engelage and Commissioners of Warren County v. City of Warrenton
(Missouri Court of Appeals, Eastern District, September 18, 2012)

The city of Warrenton is located within Warren County, Missouri.  Warren County decided to build a new county administration building on property located within the city limits of Warrenton. In 2009, when the county learned of the city’s plan, the city notified the county that, pursuant to the city code, the county must obtain and pay for various building permits from the city before commencing construction of the new administrative building. The county objected, informing the city that it would not be applying for or obtaining a building permit because it was not legally required to do so. The parties then exchanged a series of communications. Without applying for or obtaining any permits, the county commenced construction by having its contractor mobilize its equipment at the site and begin to grade the building site. The city building inspector went to the site on October 15, 2010, and issued a stop-work order because the county had begun construction and grading in violation of the city’s building and safety code. Construction did not stop.  Another stop work order was issued.  The county applied for a building permit, but also sought a declaratory judgment holding that the city did not have the authority from the legislature to require a county to comply with the city’s building code.

The Missouri Court of Appeals stated that the dispute must be resolved by looking to the intent of the legislature.  The court must construe the provisions delegating power together and harmonize them if reasonably possible to do so, looking at the plain and ordinary meaning of the language used and to give effect to that intent, if possible.  The county relied on two sections of Chapter 49 of the Missouri Revised Statutes.  Section 49.270 states, in part, that the county commission “shall have control and management of the property, real and personal, belonging to the county….”  Section 49.470 provides, in part, that the county commission has the power “to build any county buildings….”  The county argues that the city may not interfere with or regulate the duly-authorized activities of the State or any of its other subdivisions unless the state constitution or a state statute specifically and expressly grants such power or authority.

The city, in contrast, relies on the police powers granted to municipalities by Section 79.110, which reads in part “The mayor and board of aldermen of each city … shall have power to enact and ordain any and all ordinances … as they shall deem expedient for the good government of the city, the preservation of peace and good order….”  It also relies on Section 79.450.4 which gives fourth-class cities (like Warrenton) the authority to  “regulate and control the construction of buildings…and may provide for the inspection of the same.”  Under these provisions the city enacted its building code.

The Court determined that these statutes gave the city the authority to regulate the county administration building through its building code.  It found that through Section 79.450.4 “the legislature has granted cities broad authority to regulate construction of buildings generally, without qualification as to whether the building or owner is ‘private’ or ‘public.'”  The provisions cited by the county, in contrast, are “merely a mechanism to ensure that a county building is built according to the contract and the approved plans. The authority here does not speak to protecting the public’s safety.”  The court found it important that Chapter 64 of Missouri Revised Statutes gives first and second class counties control of construction by county commissions “[fo]r the purpose of promoting the public safety, health and general welfare, to protect life and property and to prevent the construction of fire hazardous buildings….”  Warren county is a third class county, which has no such general power to regulate to protect public health and safety.

The court dismissed as inapplicable five prior cases cited by the county for the proposition that cities do not have the authority to regulate counties in matters such as these.  “[In these cases the] courts were not applying some broad over-arching proposition that a city may not regulate a county absent an express grant of such authority over a county entity. Instead, the courts carefully considered the legislature’s competing delegations of authority in order to determine the scope of power one political subdivision had to regulate another.”

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

Gary Taylor

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

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 , ,
Leave a Comment on Court must consider evidence of non-receipt of certified letters in due process claim

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