Year: 2012

Overflights from airport should not be examined using regulatory takings standards

by Kaitlin Heinen

Robert E. Brenner v. City of New Richmond
(Wisconsin Supreme Court, July 17, 2012)

The New Richmond Regional Airport is owned and operated by the City of New Richmond. In September 2006, the Airport began a construction project to extend its main runway by 1500 feet, which was completed in June 2007.  To make the runway extension possible, the City had acquired, by direct condemnation, 62 acres of land from the Wickenhausers, whose land bordered the north end of the Airport. Also acquired by the City was a 3.813-acre avigation easement over parts of the remaining 80 acres of the Wickenhausers’ property. (An avigation easement is an “easement permitting unimpeded aircraft flight over the servient estate.”) This 3.813-acre avigation easement covered the airspace above the Wickenhausers’ personal residence and dairy barn.  The Wickenhausers asked the City to condemn the entire 142.5 acres of their property—which the city declined to do. In addition, Robert E. Brenner’s house is 816 feet from the extended runway, and Allan and Susan Seidlings’ home is 1503 feet from the extended runway. Like the Wickenhausers, Brenner and the Seidlings asked the City to condemn their land after learning of the extension—their requests were also declined. As result of their denied condemnation requests, all three parties alleged inverse condemnation under Wis. Stat. §32.10.

Collectively, the landowners’ testimonies complained of noise, dust, dirt, flashing lights, disruptions of sleep, diminished enjoyment of the property, safety concerns, direct over-flights, and decreases in property value. Brenner, the Seidlings, and the Wickenhausers argued that the Airport’s runway extension amounted to a compensable taking of an easement, since they have suffered adverse effects as a result of increased aircraft over-flights. In opposition, the City testified that the Airport had installed a blast pad to control dust and erosion. Additionally, the circuit court found that the medical helicopter and a jet that formerly used the Airport are no longer hangared there. However, the circuit court also found conflicting information that aircraft usage had increased by two-thirds since the runway’s extension. Brenner, who is a licensed pilot himself, testified that some pilots did not follow standard traffic patterns and submitted video evidence of this. The City objected, claiming that they cannot be held responsible for what pilots do illegally. (However, the Wisconsin Supreme Court reasoned that because the Airport is owned by the City, the City is liable for aircraft using the Airport–the City is in a far superior position to enforce FAA flight standards as opposed to neighboring landowners.)

The circuit court relied on the real estate appraiser’s determination that the extended runway reduced the Wickenhausers’ property value, at most, by 20%. Then citing the United States Supreme Court’s decision in United States v. Causby, the circuit court ruled that for a taking to have happened, the property owner must have been deprived of all or practically all beneficial use of the property.  The Wisconsin Court of Appeals reversed, holding that this case is a physical occupation case, and the standard used by the circuit court involves regulatory takings, which does not apply. The case was remanded back to the circuit court, and the Wisconsin Supreme Court accepted the Airport’s petition for review.

The Wisconsin Supreme Court addressed the two conflicting standards at issue here: “(1) whether the over-flights are low enough and frequent enough to have a direct and immediate effect on the use and enjoyment of the property, or (2) whether the over-flights deprive the property owner of all of substantially all beneficial use of property?”

The United States Supreme Court’s previous decisions in Causby and Griggs are the controlling law with respect to takings of private property by aircraft over-flights. Causby involved frequent, regular aircraft over-flights over a personal residence. The aircraft in this case flew so low (even though the altitudes were approved at that time in 1923) that they barely missed the tops of the trees and killed the landowner’s 150 chickens who fatally flew into the walls of their enclosures from fright. The Supreme Court recognized that Congress placed navigable airspace into the public domain; however, The Court also acknowledged that property owners must be allowed to have control of the immediate reaches of enveloping atmosphere above their property, which includes the super-adjacent airspace below the altitude that is set as navigable. The Court thus established a test to determine whether or not a taking had occurred: over-flights by government aircraft do not constitute a taking unless they are so low and so frequent as to be a direct interference in the enjoyment and use of the property. This is the standard that should be applied wherever Causby is cited as the controlling law in a case. The Wisconsin Supreme Court concluded that the Causby standard is the appropriate standard that must be applied in this case. The determination of whether or not the aircraft over-flights have been low enough and frequent enough to have a direct effect on the use and enjoyment of the land should govern fact-findings and rulings of the circuit court. If this standard is satisfied, the government has taken an easement without paying just compensation. The Wisconsin Supreme Court declared that the circuit court had erred in applying a regulatory taking standard, and that the case must be remanded to them to apply this correct Causby standard.

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40-foot “rear yard” requirement is a setback requirement

by Kaitlin Heinen and Gary Taylor

Quin R. Feuerstein v. Sawyer County Board of Appeals
(Wisconsin Court of Appeals, August 14, 2012)

In 2008, the Feuersteins presented a certified survey map (CSM) to Sawyer County (WI) for approval. The CSM was denied by the Sawyer County zoning administrator, however, because a boat house on the lot was only 10 feet from the rear lot line, which the zoning administrator identified as such because it roughly paralleled the shoreline.  As a result, the administrator concluded that the 40 foot rear yard setback found in the zoning ordinance was required to the rear of the boat house (not the principal residence as urged by the Feuersteins). The Sawyer County Zoning Board of Appeals upheld the administrator’s decision.  The Feuersteins appealed.

The Feuersteins’ argument was that the zoning ordinance is ambiguous, and therefore must be construed in favor of private property owners. The Feuersteins argued that the ordinance is ambiguous because it does not define “rear lot line,” and that the Board could not reasonably conclude that the lot line behind the boat house was the rear lot line.  However, “rear yard” is defined as an “open[,] unoccupied space on the same lot with the building between the rear line of the building and the rear line of the lot and extending the full width of the lot,” according to SAWYER COUNTY, WI, ZONING ORDINANCE § 2.1(106). Additionally, SAWYER COUNTY, WI, ZONING ORDINANCE § 18.4(a) states that 40 feet of yard is required in areas zoned as RR-1. The Feuersteins’ argument that the ordinance’s use of the phrase “yard required” instead of “setback” created ambiguity was rejected by the court.

The Feuersteins also argued that § 2.1(106)’s reference to building in the singular adds to the ordinance’s ambiguity; asserting that since their cabin is the principal building on their lot, then it is sufficiently distant from the lot line for their proposed CSM to comply with the ordinance.  However, The Wisconsin Court of Appeals disagreed, The ordinance clearly states in § 2.1 that references made in the singular include the plural. Additionally, SAWYER COUNTY, WI, ZONING ORDINANCE § 4.26(1) states that a permanent, roofed structure not attached to the principal building shall conform to the setback requirements.

The Court of Appeals stated that the setback requirements unambiguously apply to the Feuerstein’s boat house: “The ordinance is evidently clear when read as a whole in its requirement of a 40 foot setback from even the accessory buildings on the lot in question.”  The Wisconsin Court of Appeals affirmed the Board’s decision in upholding the order for the Feuersteins to comply with the 40 foot setback of the rear lot line from their boat house.

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Fargo’s method for determining special assessments was appropriate

Gary Taylor

by Kaitlin Heinen

D & P Terminal v. City of Fargo
(North Dakota Supreme Court, July 18, 2012)

D&P Terminal (D&P) and others appealed to the North Dakota Supreme Court after the district court upheld the decision of the Board of City Commissioners of Fargo to approve special assessments against their properties along 12th Ave. N, where the North Dakota Department of Transportation and City of Fargo planned reconstruction. The district court held that the Board did not violate D&P’s due process rights, nor had the Board been shown to be arbitrary, capricious, or unreasonable in its decision.

North Dakota Supreme Court addressed the standard of review applied to special assessments decisions: the Courts cannot try special assessment cases anew; the Court begins with the presumption that the assessments are valid; and the burden lies with the challenging party to demonstrate that the assessments are invalid. As a result, the Court must affirm the decision of the local governing body unless it acted arbitrarily, capriciously, or unreasonably, or if there is not enough evidence to support its decision. Arbitrary, capricious, or unreasonable conduct consists of incorrect interpretation and application of the controlling law at the time of the decision.

The Commission is governed by N.D.C.C. §40-23-07 to determine the amount assessed to each property in an improvement district.  The Board adopted Fargo’s Infrastructure Funding Policy to make assessments uniform across varying improvements projects. This Policy uses “caps,” that is, maximums, of the amount of listed items assessed based on front footage or square footage of the property. The suggested benefit amount is usually less than the actual cost of improvements, which is then sent to the Commission as a recommendation for its final decision in the final assessments. D&P argued that the use of a “formula” – like the use of front footage or square footage to determine the benefits to property – is barred by the North Dakota Supreme Court’s previous decision in Robertson. The North Dakota Supreme Court rejected D&P’s arguments that the front footage or square footage used in this policy constitutes a “formula.” The Court previously rejected similar arguments in Hector, so the Commission did not fail to properly determine the benefits to each of their properties based on this precedent. The Supreme Court reiterated its rationale, first expressed in Hector:

A municipality has broad discretion to choose the method used to decide what benefits a property receives from an improvement and to apportion the costs to individual properties. A municipality may adopt any method to apportion benefits that is fair and legal and secures an assessment that is in proportion to the benefits as nearly as possible when no rule of apportionment prescribed by statute or charter exists. The process of quantifying benefits accruing to each lot inevitably rests on the judgment and discretion of the special assessment commission. There simply is no precise formula for quantifying benefits. Assessments may be apportioned according to frontage, area, value of, or estimated benefits to, the property assessed, or according to districts or zones, or on any other reasonable basis that is fair, just, and equitable. However, the method used to apportion the assessment cannot be arbitrary and must have some relation to the benefits. [citations omitted]

D&P’s arguments based on Robertson were lacking because they failed to acknowledge the Court’s multiple decisions after Robertson that have previously upheld the use of “formulas,” including front footage, area, and even value to determine benefits to assessed property. In addition, §2801 of the 1905 Revised Codes, which was the primary statute in question in Robertson, required the Commission to personally inspect each lot in the improvement district. That has since been amended by the legislature (1999 N.D. Sess. Laws ch. 366), which has effectively eliminated this requirement of personal inspections, which would be “wholly impractical and unmanageable” today, as compared to the year 1914 when Robertson was decided. The Court concluded then that Robertson is no longer precedent, having been decided nearly 100 years ago. The evolved case law on special assessments in North Dakota since Robertson has changed enough to include a much more limited standard of review such as the use of front footage or square footage to determine the benefits to assessed property.

The North Dakota Supreme Court affirmed, concluding that the Commission did not use an inappropriate method to determine the benefits to D&P Terminal, Inc. and Potter Enterprises’ properties included in the improvement district. “Formulas” in use by special assessment Commission are permissible.

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Village’s extraterritorial zoning valid and applicable to condominium development

by Kaitlin Heinen

Village of Newburg v. Deerprint Enterprises, LLC
(Wisconsin Court of Appeals, August 15, 2012)

Deerprint Enterprises, LLC filed a motion for summary judgment seeking declaration that its condominium plat the Town of Trenton approved in 2007 is not subject to the Village of Newburg’s extraterritorial plat approval ordinances. The Village also filed a motion for summary judgment seeking declaration that the Town’s earlier approval is void, so as to require that Deerprint’s development be reapproved. The circuit court granted the Village’s motion and denied Deerprint’s.

The case was previously before the Court of Appeals on a related question.  Deerprint proposed a 6-unit condominium that sits on a 35-acre parcel of land zoned as CES-5 Country Estates under the Town’s zoning ordinance. This zoning allows one single-family unit per a minimum of 5 acres in a residential development; however one of the condominium units was initially commercial. The Village objected to the Town’s approval of the mixed-use development, designated as a Planned Development Overlay (PDO) and sought a declaration that it was invalid under the Village’s extraterritorial zoning authority that was in place at the time. The Wisconsin Court of Appeals agreed and remanded the case to the trial court.

On remand, the trial court held the Town’s approval was null and void and granted the Village’s motion for a summary judgment. Deerprint then simply amended their condominium declaration to make all units residential. The Village objected, arguing that no valid condominium plat existed that could be amended, since the Town’s approval had since been invalidated, and was never re-submitted to the Village for approval. The trial court found that amending the rejected declaration was insufficient and granted the Village’s request for summary judgment. Deerprint appealed again, or as Judge Todd K. Martens cleverly remarked, Deerprint “essentially [tried] for a second kick at the same old cat.”

Deerprint argued that the circuit court erred in that neither the Town nor the Village can prohibit the condominium form of ownership according to WIS. STAT. §703.27(1), but the Wisconsin Court of Appeals disagreed. The trial court did not require Deerprint to get approval for condominium ownership but to be approved for a multi-family residential development on land zoned for single-family residence per five acres. Additionally, WIS. STAT. §703.27(1) does not exempt condominiums from zoning regulations. Rezoning via another PDO is required then since the first PDO designation was invalidated.

WIS. STAT. §703.27(1) “(1) prohibits zoning ordinances from either outlawing the condominium form of ownership or imposing on condominiums requirements not imposed on other forms of ownership; and (2) requires a municipality to pass an ordinance if it wants to apply subdivision ordinances to condominiums.”  WIS. STAT. §236.10(1)(b) requires approval by both the town and the governing municipality for the property within the overall jurisdiction of both. The Village’s extraterritorial plat approval encompasses the condominium plat by VILLAGE OF NEWBURG,WIS., ORDINANCES ch. 18, § 18.04(6)(b) (2007), which expressly states that platting regulations are applicable to condominiums. Also, WIS. STAT. §236.45 authorizes a municipality to regulate subdivisions, which are applicable outside city and village boundaries. And WIS. STAT. § 703.27(1) authorizes the inclusion of condominiums under these regulations. Since the Village’s ordinance expressly refers to condominiums, it is applicable to Deerprint’s parcel.

The Court held that all zoning provisions have to be met for a condominium to be valid. Deerprint’s parcel clearly lies within the Village’s jurisdiction, and Deerprint has never sought approval from the Village. So the judgment of the circuit court was affirmed.

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

Gary Taylor

by Gary Taylor

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

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

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

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

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

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

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

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The BLUZ welcomes Kaitlin Heinen

Gary Taylor

I am glad to be able to introduce our newest student contributor, Kaitlin Heinen.  Kaitlin is from Eldridge, Iowa pursuing a double degree in Chemistry and Political Science at Iowa State University. She plans to attend law school after graduation and study patents and intellectual property rights law (a much more lucrative legal career than planning and zoning law, I must say).  Kaitlin is a junior.  I’m excited by the prospect of keeping one of these high-achieving students on the blog for two years!  I’ll try not to annoy her.  Welcome Kaitlin!

And congratulations to Tori Heldt, who graduated in May and accepted a position with Wells Fargo Financial in Philadelphia, PA.  She has a bright future ahead of her!

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City granted new trial after being found liable for wrongful building demolition

by Kaitlin Heinen and Gary Taylor

Dave McNeill v. City of Kansas City, Missouri
(Missouri Court of Appeals, August 7, 2012)

In summer 2008, McNeill purchased property, containing a building that had been on the City of Kansas City’s dangerous buildings list since August 2001. McNeill notified the City of his plans to renovate the building into a multi-tenant residential building. He began various renovations, but the work on the building stagnated when McNeill’s bank backed out of a construction loan.

In June 2009, the City sent a letter to McNeill instructing him to remove some debris sitting on the property and some weeds  The city requested a meeting with him. McNeill complied with the cleanup request. On June 24, 2009, McNeill met with City Inspector Smith and Codes Enforcement Supervisor Parks, who was filling in for Crider, the Codes Enforcement Supervisor regularly assigned to that file. McNeill explained his plans for continued renovation and that he would obtain more funding soon. Smith and Parks agreed to allow McNeill more time. They also ordered McNeill to remove more debris from the side of the building, so McNeill hired a contractor to remove the debris and grade the yard in July 2009. McNeill notified Smith and Parks of the completed work on July 20. On July 31, McNeill received preliminary commitment for another construction loan.

On August 8, 2009, the City demolished the building without contacting McNeill, disregarding the policy of the Dangerous Buildings Division to send the property owner a pre-demolition notice. Crider had recommended the demolition based on records on file, which included neither Smith and Parks’ notes from June 24 indicating their promise to McNeill for more time, nor a record of McNeill’s July 20 phone call.  The City subsequently sent McNeill a bill for the demolition.

On August 7, 2010, McNeill filed a petition, claiming the city wrongfully demolished his building. The trial’s jury returned a verdict in favor of McNeill’s claim for $150,000. The City then claimed that the trial court had erroneously submitted to the jury an instruction containing a roving commission. (A ‘roving commission’ is “an abstract instruction…in such broad language as to permit the jury to find a verdict without being limited to any issues of fact or law developed in the case.”) The trial court agreed and granted the City a new trial.  McNeill appealed to the Missouri Court of Appeals.

The Missouri Court of Appeals agreed with the trial court’s conclusion that its jury instruction created a roving commission.  The Court of Appeals agreed that the instruction given to the jury as to finding whether the building was “wrongfully demolished” was too general because it did not identify the acts or omissions of the City that might be considered “wrongful.”  The Court of Appeals noted that there are no Missouri Approved [Jury] Instructions -nor is there any case law interpreting – the state statute (Section 67.450) regarding wrongful demolition. Without precedent, the protocol then is to apply the word’s “plain and ordinary meaning,” which can be appropriately found in the dictionary. The Court of Appeals found that the term “wrongful” does not need to be defined; rather the instruction should simply request the jury to find that (a) plaintiff owned a building, (b) the City demolished it, (c) that the City‟s demolition of the structure was wrongful in one or more specified ways, and (d) plaintiff was damaged as a direct result thereof. In its simplest context, the word “wrongful” or “wrongfully” “only requires the result to be incorrect, regardless of whether the City’s conduct was mistaken, careless, negligent, reckless or intentional.” The submission of the way or ways in which the demolition was wrongful will differ from case to case.

The trial court’s grant of a new trial was affirmed.  The Court of Appeals recommended that on retrial the trial court refer to Section 67.450 to establish the criteria on which the jury should be specifically instructed, and that the jury be instructed that any demonstrations of wrongful demolition must be supported by evidence.

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

Gary Taylor

by Victoria Heldt

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

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

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

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

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

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

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

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

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

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Ohio Township’s impact fees constituted impermissible tax

Gary Taylor

by Victoria Heldt

Drees Company et al., v. Hamilton Township et al.
(Supreme Court of Ohio, May 31, 2012)

In the last twenty years, Hamilton Township in Ohio has experienced significant growth in its population and development.  In response to the growth, the Township adopted a resolution that required potential developers to pay impact fees in order to apply for and acquire a zoning certificate to develop in an unincorporated area.  The stated purpose of the impact fee was “to benefit the property by providing the Township with adequate funds to provide the same level of service to that property that the Township currently affords previously developed properties.”

The fee included four categories:  a road-impact fee, a fire-protection impact fee, a police-protection-impact fee, and a park-impact fee.  The amount assessed to each property was determined by its use.  Properties to be used for single-family dwellings were assessed a total of $6,153 while those being developed for retail/commercial purposes were assessed a $7,962.  The money received was placed into separate accounts (one for each category) not put into the general fund.  The funds in each account may be used only for the purpose of each account.

Drees Company, among others, alleged that the impact fees are contrary to Ohio law and are unconstitutional.  Hamilton Township is a limited-home-rule township that may “exercise all powers of local self-government within the unincorporated area of the township…and shall enact no other taxes other than those authorized by general law.”  Drees Company argued that the impact fee is really a tax and, therefore, the Township was not authorized to enact the resolution.  The trial court ruled in favor of the Township.  It stated that Hamilton Township “may make and fund improvements to benefit new development by use of its system of impact fees, because the resolution is not in conflict with any other Ohio statute, and because it is sufficiently narrowly tailored to provide services to the class of fee payers in exchange for the fees.”  The Court of Appeals affirmed, noting that the impact fee did not constitute a prohibited form of taxation.  Drees further appealed the case.

In this case, the Supreme Court of Ohio had to distinguish a fee from a tax.  It looked to precedent in its analysis to note how the two have been historically contrasted.  In State ex rel. Petroleum Underground Storage Tank Release comp. Bd. V. Withrow, the Court looked to “the substance of the assessments and not merely their form.”  It had to determine whether assessments imposed on owners and operators of underground storage tanks (“USTs”) were taxes.  The stated purpose of the fees was “to reimburse owners and operators of USTs for the costs of corrective actions in the event of a release of petroleum into the environment and to compensate third parties for bodily injury and/or property damage resulting from such occurrences.”

In Withrow, the Court determined the assessments to be fees for four reasons: (1) the fees were imposed to further regulatory measures to address environmental problems caused by leaking USTs; (2) the funds were never placed in general funds and were to be used strictly for problems related to USTs; (3) the fee was in exchange for protection from UST leaks; and (4) if the fund exceeded a certain amount, no assessment would be charged that year.  The Court noted that, when applying the factors from Withrow to this case, the impact fees seem to constitute taxes.  The fees lack any sort of regulatory function, can be spent on typical township expenses, are not in exchange for any particular service, and are not responsive to need.

The Court next looked to Am. Landfill, Inc. v. Stark/Tuscarawas/Wayne Joint Solid Waste Mgt. Dist., where the Sixth Circuit Court of Appeals was faced with a similar situation.  It had to determine wither assessments imposed by Ohio solid-waste-management districts on people disposing of waste were fees or taxes.  The fees were to be used for various things pertaining to the county’s waste management plan.  The court employed a three-factor analysis that considered (1) the entity that imposes the assessment; (2) the parties upon whom the assessment is imposed; and (3) whether the assessment is expended for general public purposes, or sued for the regulation or benefit of the parties upon whom the assessment is imposed.

The Court noted that an assessment imposed by a legislature is more likely to be a tax than one imposed by an administrative agency.  Furthermore, an assessment imposed upon a broad class of parties is more likely to be a tax than one imposed on a narrow class.  The third factor, the use of the assessment, is the predominant factor.  Applying the Am. Landfill test to this case points to the fact that the impact assessments constitute taxes.  They were imposed by a legislative body, not an administrative one.  They were also imposed on a fairly large group of people.  Furthermore, the funds were to be used for public benefit, not solely for the benefit of those property owners.

The Court noted that an essential question was whether the assessments were for public or private benefit.  It noted that the goal of the assessment was “for the township to have the necessary funds to allow all properties in the township to maintain their same level of service despite recent, rapid growth.”  The resolution itself stated it was for “the protection of the health, safety, and general welfare of the citizens and property owners of the Township.”  Consequently, the Court concluded that the assessments constituted a tax and were therefore not authorized.  It reversed the decision and remanded it to trial court.

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Property did not qualify for Minneapolis vacant building registration program because conditions did not constitute nuisance

Gary Taylor

by Victoria Heldt

Larry Naber v. City of Minneapolis
(Minnesota Court of Appeals, May 29, 2012)

Larry Naber owns a home in the City of Minneapolis that he vacated in 1996.  In 2001 the City sent a letter to Naber requesting him to apply to the City’s vacant building registration (VBR) program.  Naber paid the $400 registration fee annually and took part in the VBR program from 2001 until 2008.  During those years, the property incurred several minor zoning code violations, all of which Naber remedied in a timely fashion.

In 2009 the City cited three code violations (brush/branches, tall grass/weeds, and an inoperable vehicle) which Naber timely remedied.  In September 2009 Naber received a letter from the City requesting he pay a $6,360 registration fee for the VBR program that year.  He refused to pay and the Minneapolis City Council levied the sum as a special assessment against the property.  In district court, the special assessment was affirmed.  The court determined the property qualified for the VBR program since it was unoccupied for 365 days and incurred zoning code violations.  Naber appealed to the Court of Appeals.

The City’s VBR program operates pursuant to MCO §249.10 and works “to enhance the livability and preserve the tax base and property values of buildings within the city.”  The ordinance states that a building is vacant if (among other factors) it is “unoccupied for a period of time over three hundred sixty-five (365) days and during which time an order has been issued to correct a nuisance condition pursuant to section 227.90.”  First, the parties disagreed as to who bears the burden of proof to show the property qualified for the VBR program.  After analyzing precedent, the Court determined that the City bears that burden and that it failed to satisfy it.

Naber argued the fact that his property qualified for the VBR program in 2009 because it was vacant for 365 days and incurred zoning code violations.  He did not deny its vacancy, but rather that the zoning code violations did not meed the code’s nuisance definitions.  According to the code, in order for tall grass to constitute a nuisance condition it must measure eight inches tall or have gone (or about to go) to seed.  Naber noted there was no evidence in the record that the grass measured eight inches tall or that it was about to go to seed.  The picture provided in the record does not indicate the height of the grass.  The Court agreed with Naber and concluded the district court’s finding that the grass was a nuisance condition was not supported by the record.

Naber next argued the violation for fallen branches.  The existence of a branch in a yard is not a nuisance condition and the district court did not find the branch was a health, safety, or fire hazard.  The City’s only witness did not testify about the branch and the picture provided in the record shows only a small branch in the back yard.  The Court determined the district court’s finding that the fallen branch was a nuisance condition was erroneous.

Naber finally argued that the vehicle placed on his property was not a nuisance condition.  He admits that it was parked on the property without current license plates or registration, but asserts that it was not on the property in such a way as to constitute a nuisance.  It was parked on a designated parking pad similar to that of a neighbor.  The City argued that, regardless of the manner in which it was parked, an inoperable vehicle on the property is in itself a nuisance.  The Court disagreed.  It looked to the language of the statute.  An “inoperable vehicle” was listed within a sentence as one of several nuisance conditions separated by a comma.  The sentence ended with the phrase “in such a manner as to constitute a nuisance.”  The Court found that this phrase applied to the entire sentence, so an inoperable vehicle must be parked “in such a manner as to constitute a nuisance” in order to be a nuisance condition.  The Court rejected as erroneous the district court’s finding that the vehicle was a nuisance.

Since the Court of Appeals found that Naber’s property did not qualify for the VBR program it reversed the district court’s decision.

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