Delay that doomed wind farm project did not give rise to substantive due process claim

by Rachel Greifenkamp and Gary Taylor

CEnergy-Glenmore Wind Farm #1, LLC v. Town of Glenmore
(Federal 7th Circuit Court of Appeals, August 7, 2014)

In Glenmore, Wisconsin, CEnergy planned to develop a wind farm. CEnergy obtained a conditional use permit from the town but did not obtain the required building permits for the wind turbines. CEnergy had entered into a power purchase agreement with the Wisconsin Public Service Corporation to sell wind energy for 20 years; however, the agreement was contingent upon CEnergy satisfying a variety of requirements, including obtaining all necessary permits, by March 1, 2011.

In September of 2010 the applications for the building permits to build the turbines were submitted to the Town Board.  In December 2010, CEnergy had provided all necessary information for the permits and informed the Chair of the Board that the permits would need to be approved by March 1 for CEnergy to satisfy the power purchase agreement. Over the course of the next three months, public sentiment had turned decidedly against the project, with the Board Chair receiving threats to his physical safety.  The Board did not take up the the issue of the building permits at the January or February meetings, ostensibly because the town’s attorney needed more time to review the documentation submitted by CEnergy.   The applications for building permits were finally considered and granted at a meeting on March 7, but citizens at that meeting became “accusatory and threatening” toward Board members and other town officials.  The Chair reopened the meeting and, after further discussion, the Board voted to rescind the granted permits.  One week later, however, the Board held a special meeting and nullified the rescission, thereby reinstating the granted permits.

When the Wisconsin Public Service Corporation backed out of the power purchase agreement due to CEnergy’s failure to obtain the necessary permits in time, CEnergy filed suit against the Town of Glenmore claiming a denial of its right to substantive due process and a violation of the town’s state law obligation to deal in good faith. The federal district court dismissed the due process claim for failure to state a claim upon which relief can be granted, the district court also declined to retain jurisdiction over the supplemental state law claim. CEnergy appealed the decision to the Seventh Circuit Court of Appeals.

On the issue of the denial to substantive due process, the Court of Appeals noted that while both the Supreme Court and the 7th Circuit Court of Appeals have acknowledged the possibility that a land-use decision could constitute a deprivation of property without substantive due process of the law, neither have definitively concluded such. However, like the district court, the Court of Appeals concluded that the substantive due process claim fails because the Board’s actions were not arbitrary.  “As far as the Constitution is concerned, popular opposition to a proposed land development plan is a rational and legitimate reason for a legislature to delay making a decision….The idea in zoning cases is that the due process clause permits municipalities to use political methods to decide.”  While the courts have stated the substantive due process standard in many ways – decisions must “shock the conscience,” be “egregious,” “arbitrary and capricious,” or “random and irrational” – the Board’s decision making process did not meet any of the tests.

The Court of Appeals further held that CEnergy’s claim must fail because it did not seek recourse under state law. The court has held in the past that a plaintiff who ignores potential state law remedies cannot state a substantive due process claim in federal court.  The standard process for obtaining a building permit in Glenmore involves submitting the request to the Town Zoning Administrator and then, if denied, bringing the request to the Board of Appeals. This typical process does not involve the Town Board at all. Because CEnergy went along with the political process and did not seek another administrative course of action to get their building permits approved, there is no opportunity for them to regain the lost profits from the wind farm.

The 7th Circuit Court of Appeals affirmed the judgment in favor of the Town of Glenmore.

 

Unreasonable-to-repair provision in Brighton (MI) unsafe structure ordinance passes constitutional muster

by Gary Taylor

Bonner v. City of Brighton
(Michigan Supreme Court, April 24, 2014)

Under the City of Brighton, Michigan’s code of ordinances, if a structure is determined to be unsafe and the cost of repairs would exceed 100 percent of the true cash value of the structure when it was deemed unsafe, then the repairs are presumed unreasonable, the structure is presumed to be a public nuisance, and the city may order demolition of the structure without providing the owner an option to repair it.  The unreasonable-to-repair presumption can be overcome by presenting a viable repair plan, evidence from the landowner’s own experts that the repair costs would not exceed 100 percent of the property value, or evidence that the structure has some sort of cultural, historical, familial, or artistic value.

The City ordered Leon and Marilyn Bonner to demolish three unoccupied residential structures on their property after determining that repairs would exceed 100 percent of the true cash value of each of the structures (thereby providing the Bonner’s no option to repair).  The Bonners sued the City, and the circuit court and Michigan Court of Appeals determined that the above-discussed provisions of the Brighton Code of Ordinances violated property owners’ substantive and procedural due process rights.  The City appealed to the Michigan Supreme Court.

The Supreme Court determined that the Court of Appeals erred by failing to separately analyze the Bonners’ substantive and procedural due process claims. The substantive component of due process protects against the arbitrary exercise of governmental power, whereas the procedural component ensures constitutionally sufficient procedures for the protection of life, liberty, and property interests.

Substantive Due Process.  Because property owners do not have a fundamental right to repair a structure deemed unsafe by a municipality before that structure can be demolished, the government’s interference with that right need only be reasonably related to a legitimate governmental interest. The Brighton ordinance did not constitute an unconstitutional deprivation of substantive due process because the ordinance’s unreasonable-to-repair presumption was reasonably related to the city’s legitimate interest in promoting the health, safety, and welfare of its citizens. Nuisance abatement is a legitimate exercise of police power, and demolition is a permissible method of achieving that end. The ordinance was not an arbitrary and unreasonable restriction on a property owner’s use of his or her property because the ordinances provided for circumstances under which the unreasonable-to-repair presumption could be overcome and repairs permitted.

Procedural Due Process.  The Supreme Court further determined that the  demolition procedures provided property owners with procedural due process by providing the right to appeal an adverse decision to the city council, as well as the right to subsequent judicial review. The City is not required to afford a property owner an option to repair as a matter of right before an unsafe structure could be demolished, nor is the City required to provide for a reasonable opportunity to repair the unsafe structure in order for the ordinance to pass constitutional muster.

Limiting percentage of rental units allowed per block was valid exercise of police power

by Rachel Greifenkamp and Gary Taylor

Dean v. City of Winona

(Minnesota Court of Appeals, February 24, 2014)

In the City of Winona, MN, there exists an ordinance that limits, in certain districts of the city, the number of lots on a block that are eligible to obtain certification as a rental property. Based on the findings from the city’s planning commission and a Parking Advisory Task Force that was formed to consider the issues of increased parking demands, the City found that rental-housing units comprised about 39% of the City’s total housing units, but that these rental properties comprised 52% of the complaints received by the Community Development Department. Based on data from 2004, the planning commission found that 95 of the 99 calls for police service based on noise and party-related complaints involved rental properties. They also found that 52% of the zoning violations that resulted in written violations were for rental properties. In 2005, the idea of restricting the number of rental properties per block was suggested. The Parking Advisory Task Force suggested that the number of rental units be restricted to 30% of the total properties on any given block. The task force adopted a motion to forward a “30% rule” to the planning commission for its consideration. The planning commission voted to recommend the 30% rule to city council, and the council subsequently passed the 30% rule.  The three appellants challenging the 30% rule in this case were the owners of three houses that were purchased after the 30% rule was adopted. In January of 2013 the district court denied the appellants’ motion that the 30% rule was an invalid exercise of the City’s broad police power, and that it violated their Equal Protection, Substantive Due Process, and Procedural Due Process rights under the Minnesota Constitution, and granted summary judgment to the city. The appellants then took their case to the Minnesota Court of Appeals.

Police Powers. The Court of Appeals determined that the 30% rule was, in fact, an authorized exercise of police power. The term “police power” means simply the power to impose such restrictions upon private rights as are practically necessary for the general welfare of all. “The development of the law relating to the proper exercise of the police power of the state clearly demonstrates that it is very broad and comprehensive, and is exercised to promote the general welfare of the state….[T]he public has a sufficient interest in rental housing to justify a municipality’s use of police power as a means of regulating such housing.”

Equal Protection. In order for an equal protection challenge to be valid the appellant must show that “similarly situated persons have been treated differently.” Similarly situated means that the two groups in question are alike in all relevant respects. The Court concluded that the 30% rule is not invalid on its face:

The ordinance is facially neutral and applies equally to all property owners in the regulated districts. The ordinance sets a 30% cap, but it does not define or predetermine which lots will be certified. That determination is made based on the changing facts and circumstances on each block, and not based on the ordinance or the characteristics of lot owners. The fact that the number of lots that may be certified might be less than the number of property owners who desire certification is not a class-based distinction between two groups of property owners.

The Court also concluded that the 30% rule was not discriminatory in the manner it was being applied by the city.  The Appellant did not show that the city “has done anything other than apply the mathematical formula on a first-come, first-served basis. Appellants’ real complaint is about the effect of an otherwise neutral ordinance on their particular circumstances, which does not give rise to an equal protection claim.”

Substantive and Procedural Due Process.  The substantive due process and procedural due process claims were also considered invalid. The appellants argued the the 30% rule violated their right to rent their property, but such a right is not a “fundamental right” protected by the Minnesota Constitution.  Unless a fundamental right is at stake, substantive due process requires only that the statute not be arbitrary or capricious.  The Court concluded that the 30% rule was adopted after a long, deliberate information-gathering process that considered public input, data, and expert review, and was thus not arbitrary or capricious.

As for procedural due process, the appellant’s argued that the 30% rule improperly delegates the power of deciding whether or not they may receive a license to their neighbors, but the Court reasoned otherwise because the “neighbors” (owners of certified rental properties) do not determine which other lots may be certified. “The certified-property owners’ views regarding whether a particular lot should be certified as a rental property are irrelevant; they can neither grant certification by consenting to it nor prevent certification by denying consent.”

The Minnesota Court of Appeals affirmed the district court’s award of summary judgment in favor of the city because the adoption of the ordinance was an authorized exercise of its police power and because the appellants did not met the burden to show that the ordinance is unconstitutional.

No constitutional right to operate a mobile vending cart

by Gary Taylor

Anthony Browne v. City of Iowa City
(Iowa Court of Appeals, February 19, 2014)

The city of Iowa City denied Anthony Browne’s application for a mobile vending cart permit.  He was one of eight applicants vying for six available permits to operate downtown.  The city created a matrix to score the applications.  One of the criterion in the matrix was past satisfactory experience working with Iowa City.  Because Browne had no prior experience with the city he received a low score on that criterion.  He ultimately finished seventh out of the eight applicants.  Browne requested and was granted a licensing hearing before the city council.  In the process he was provided with all emails and other communications concerning the permitting process.  The city council affirmed the denial.

Browne argued that the city violated his due process rights by, among other things, including what he referred to as a “seniority criterion” into the matrix and not giving him credit for successful experience working in other communities.  The district court ruled in favor of the city and the Court of Appeals affirmed.  Reviewing multiple federal and state cases, the court found that Browne has no constitutionally protected liberty or property interest in his unilateral expectation to receive a mobile vending permit.

Any right plaintiff has to earn a living through a food cart, like other intangible employment rights, arises from state law and does not spring from the fundamental guarantees of the Constitution. Municipalities in the United States have a history of stringently regulating or even prohibiting food cart vendors; thus, the right to freely operate a food cart is not “deeply rooted” in our Nation’s history and traditions. Nor is the right to freely operate a food cart implicit in our concept of ordered liberty. Therefore, the court finds that plaintiff fails to allege a property right that is protected by the Constitution and does not state a substantive due process cause of action as a matter of law.

The court went further to state that even if he had such an interest, he was afforded appropriate process, including notice, full disclosure, of all city communications regarding the permitting process, and the opportunity to be heard.

Investigations by zoning board member outside the hearing process did not give rise to due process violation

by Kaitlin Heinen and Gary Taylor

Timothy Hutchinson v. Wayne Township Board of Zoning Appeals
(Ohio Court of Appeals, 12th Appellate District, September 10, 2012)

Tim Hutchinson filed an application for a conditional use permit from Wayne Township Board of Zoning Appeals (BZA) to operate a Halloween-themed nature walk on part of Jana Hutchinson’s farm, which was zoned A-1, agricultural district. The BZA held a hearing for Tim Hutchinson’s application in July of 2008. At this hearing, it was found that the nature walk would be open 6-8 weekends per year during the Halloween season from 5pm-midnight. Traffic would come from Wayne-Madison Road using two unpaved roads, while parking would be provided in nearby open fields. The BZA  found that Wayne-Madison Road is a narrow, two-lane, dead-end road with no lighting and with narrow berms that steeply slope into drainage ditches, although Hutchinson presented expert testimony from a traffic engineer that Wayne-Madison Road would be able to handle the additional traffic. The BZA also heard complaints from residents in the area, which addressed safety issues arising from the use of Wayne-Madison Road by drivers who are inexperienced with gravel roads as well as the peace and the security of the residents in area that may be affected by the increased traffic. The BZA adjourned the hearing in progress, expressing concern that Tim Hutchinson was not a proper applicant since he was only a tenant on the property and not the landowner. Jana Hutchinson was then joined on the application for a conditional use permit, and when the hearing resumed she provided additional information to BZA about security, traffic, road maintenance, and insurance for the nature walk.

In December of 2008, the hearing was reconvened. Tim Hutchinson testified that he estimated 500 cars would be expected at the nature walk each evening. However, BZA member Carleen Yeager stated that she had researched attendance at other Halloween-themed events and, to the contrary, 500 cars would be a “light night” and that nearly 1500 cars would be expected on a “good night.” Tim Hutchinson countered that the nature walk was new and that he was “starting off small.” At the end of the hearing, BZA member Jerry Gerber moved to deny the Hutchinsons’ application.  The vote was unanimous against the application. The Hutchinsons appealed the BZA’s oral denial of the application to the Butler County Court of Common Pleas and the case was remanded to the BZA for the issuance of a written decision.

In March of 2010, the BZA issued its written decision, which found that the Hutchinsons’ nature walk would be inconsistent and incompatible with the current uses of the surrounding area and would adversely affect the general welfare of neighboring residents in the area. The Hutchinsons’ appealed. In January of 2012, the common pleas court issued its decision that affirmed the BZA’s denial of the Hutchinsons’ application for a conditional use permit.

The issue before the Ohio Court of Appeals in this decision then is that “the common pleas court erred to the prejudice of the [appellants] by affirming the BZA’s decision.” The Hutchinsons claimed that the trial court erred in its affirmation of the BZA’s decision, even though the appellants had satisfied all requirements of the zoning resolution, and that the trial court erred in finding that their due process rights were not violated by BZA member Yeager’s outside investigation.

In regards to the Hutchinsons’ first claim, the township’s zoning code requires that conditional uses must meet several criteria, such as not adversely affecting the health, safety, comfort and general welfare of the surrounding area by threats of traffic hazards, noise disturbances, night lighting, fire hazards, etc. (Section 25.053). However, citing prior case law the court stated that satisfaction of these requirements does not make approval automatic, and that the township zoning code also requires the BZA to “give due regard to the nature and condition of all adjacent uses and structures” surrounding the proposed conditional use. After reviewing the record, the court found that the Hutchinsons did not satisfy all the requirements in the code. Despite the Hutchinsons’ presentation of an expert witness, the BZA had reason to find that the increased traffic would be incompatible with the surrounding area. Thus the trial court did not err in their decision to affirm the BZA’s denial on this count.

As for the due process violation alleged, “[t]he essence of due process dictates, at the very least, that an individual have an opportunity to be heard and to defend, enforce and protect his rights before an administrative body in an orderly proceeding.” Here, Yeager admitted to making “some calls” inquiring into the reasonable number of cars to be expected for a Halloween-themed event. The Hutchinsons argued that her statement negatively affected their ability to have a fair hearing, since they were not able to cross-examine Yeager’s informants as well as Yeager herself, at the risk of losing her vote. Again citing previous caselaw, the court stated that “[t]he combination of investigative, executive and adjudicative functions does not necessarily create a risk of bias or unfairness in an administrative adjudication.” The court noted that the BZA’s decision stated, in part, that it was denying appellants’ application because the Nature Walk “would significantly increase traffic flow, according to applicant’s testimony, by hundreds of cars each evening.” From this statement, according to the court, “it is clear that the BZA did not rely on Yeager’s view that as many as 1,500 cars would be traveling Wayne-Madison Road, but only that 500 cars would be on the road, as indicated by Tim Hutchinson.”

Further, the court noted that the BZA unanimously denied appellants’ application. Thus, even if Yeager’s statements demonstrated her own bias and prejudice toward the Nature Walk, the exclusion of her vote would not have altered the result.   No due process rights were violated.

The judgment of the trial court was affirmed, maintaining the denial of the Hutchinsons’ application for a conditional use permit to operate a Halloween-themed nature walk.

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

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.

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.

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

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.

Refusal to rezone to multi-family not a due process violation; did not constitute exclusionary zoning

by Victoria Heldt

DF Land Development, LLC v. Charter Township of Ann Arbor
(Michigan Court of Appeals, November 17, 2011)

DF Land Development owned a 54-acre piece of property within Ann Arbor Charter Township (Township) that was zoned “A-1”.  This zoning classification allowed farming and agricultural use or one residential unit per every ten acres.  DF Land wanted the property rezoned to “R-7” so it could build multi-family residential units.  Its request was denied.  DF filed a substantive due process claim in court alleging that the denial to rezone the property constituted exclusionary zoning and a taking of the property.  The trial court granted summary judgment in favor of the Township and dismissed DF Land’s substantive due process and takings claims.

DF Land appealed, arguing that the refusal to rezone is arbitrary and capricious and that the current zoning was unreasonably restrictive.  They were of the opinion that it violated their substantive due process rights and was an “inverse condemnation of the property through regulation.”  The Court first noted that, in a review of a city ordinance, 1) the ordinance is presumed valid, 2) the challenger has the burden of proof to prove unreasonableness, and 3) the Court gives heavy weight to the trial court’s findings.  Additionally, in order to be successful in its claim, DF Land must show that no reasonable governmental interest is advanced by the zoning classification and that the ordinance is unreasonable “because of the purely arbitrary, capricious, and unfounded exclusion of other types of legitimate land use from the area in question.”

As to the question of whether the zoning ordinance serves a legitimate governmental interest, the Court found that it did.  The evidence presented showed that the ordinance worked to “preserve the rural character, natural features, and availability of open areas by limiting residential development on the property through density restrictions.”  According to precedent, this purpose constitutes a legitimate governmental interest.  It further found that the ruling was consistent with the historical use of the property, so it was not an arbitrary decision.  DF Land argued that the statute was too restrictive because it disallowed the property’s most economically viable use.  The Court dismissed that argument as irrelevant because a property does not, by law, need to be zoned for its most profitable use.

DF Land argued that the zoning ordinance was unlawfully exclusionary because it prohibited an R-7 zoning classification on the property.  The Court noted that an ordinance would only be considered exclusionary if it prohibited that zoning throughout the entire township.  Evidence demonstrated that 28-37% of the residential units in the township consisted of multi-family housing, so the R-7 zoning classification was not forbidden in the entire Township.  Therefore, the ordinance was not unjustly exclusionary.   The Court affirmed the trial court’s decision.

Consideration of photos only on remand, without testimony or arguments, did not violate due process

by Victoria Heldt

Russell Leffel and Paula Leffel v. City of Mission Hills, City of Mission Hills Board of Zoning Appeals
(Kansas Court of Appeals, February 6, 2012)

This appeal was submitted subsequent to a remand by the same Court.   The Leffels applied for a permit in July 2006 to construct a home on an empty lot they own in the City of Mission Hills.  The city’s architectural review board (ARB) initially approved the construction plans, but the City of Mission Hills Board of Zoning Appeals (BZA) reversed the approval.  On appeal by the Leffels, the trial court found that the BZA’s reliance on public opinion amounted to an impermissible plebiscite (i.e., that it amounted to a decision reached through direct vote of the public, rather than a decision by the BZA).  It also found the BZA’s comparison of the proposed structure to surrounding structures was unreasonable, and also that the BZA conducted an improper de novo review of the ARB’s decision.  Then on the city’s appeal of the trial court’s decision, this Court of Appeals affirmed the trial court’s decision regarding the plebiscite, but rejected the court’s other grounds for reversing the BZA’s decision.  It reversed the ruling in part and remanded the case to the trial court for it to be remanded to the BZA.

On remand, the BZA discussed the possible procedures to be undertaken on reconsideration of the proposal.  The BZA’s counsel recommended only a review of the record with no new evidence submitted.  Doug McKenna, the Leffel’s counsel, objected to that and requested an opportunity to submit new evidence.  The BZA’s chairman, Tom Roszak, expressed a desire to receive input from the ARB regarding the proposal’s conformance in style and size to surrounding structures.  It defined “surrounding structures” to be an area extending 500 feet from the proposal site.  The rest of the Board agreed and the matter was sent to the ARB for further review.

The ARB received 75 photos by city staff members of the homes within a 500 foot radius and asked each board member to review them for a quasi-judicial deliberative session in June 2009.  No arguments, testimonies, or evidence would be accepted except for the 75 photographs and board members’ personal observation of the area.  In July 2009 the ARB voted that the proposal did not conform to surrounding structures and passed this recommendation to the BZA.  The BZA affirmed its previous denial of the Leffel’s building application.  The Leffels appealed, but the trial court affirmed the BZA.  Leffels then appealed once again to the Court of Appeals.

On second appeal, the Court of Appeals looked at whether the BZA’s decision to affirm the denial of the Leffel’s permit was lawful and reasonable.   The Leffel’s first major argument was that the Court should not give deference to the BZA’s decision because it was not reasonable.  The BZA applied a standard of “good faith and fair play” rather than reasonableness when making the decision.  The Court dismissed this claim because it found “no principled reason to believe that a presumption of reasonableness does not encompass a presumption that the government officials acted fairly with good faith.”  It noted that the error in language was harmless because the Court conducts an independent review of the BZA’s conduct.  The Leffels next argued against giving deference to the BZA because the BZA’s initial decision was ruled illegal by the trial court in the first appeal, so the BZA lost its presumption of reasonableness.  The Court dismissed this claim because to so hold would contradict the limited role court’s have in zoning decisions.  It cited previous Kansas caselaw which warned the Court against substituting its decisions for those of public officials in regards to zoning matters.  The Leffels further argued that because the case was presented to the BZA in documents only that the court was in as good a position as the BZA to rule on the matter.  The Court rejected that claim, pointing out that most zoning decisions are made strictly on documentary evidence.

The Leffel’s second major claim was that the BZA decision did not comply with the Court of Appeals’ orders on remand in two ways.  First, the Leffels believed that the BZA took a “new look” at the case rather than reconsider it.  The Court began its analysis by noting that, absent specific instructions, a trial court has discretion in how to implement a remand.  The same goes for the BZA in this case since it was given the duty of reconsideration.  The Leffels took issue with the fact that the ARB accepted new photographs of the surrounding area.  The Court found it to be in compliance with the remand because one of the factors the BZA used to reverse the ARB’s recommendation was that it had improperly considered the proposal’s conformity with the surrounding structures.  Consequently, it was consistent with the remand to reconsider the conformance to surrounding structures.  Additionally, the Leffel’s counsel explicitly requested the BZA to send the case back to the ARB for reconsideration during the hearing.

Next the Leffels argued that the BZA failed to comply with the Court’s mandate by not addressing the extent to which the impermissible plebiscite affected its decision.  The Court clarified that it did not ask the BZA to determine the effect of the plebiscite, but rather asked it to reconsider its opinion without it.  The BZA did this when it (and the ARB) disregarded  public opinion regarding the proposal and reconsidered the matter based on the proposed home’s conformance to surrounding structures, without listening to arguments, or taking testimony or other evidence.

The Leffel’s third and final claim contended that the reconsideration process violated due process.  The Court found that this argument was poorly constructed and that the Leffels failed to show how their due process rights were violated.  They tried to argue that the submission of the 75 photographs was new evidence that the Leffels were not given due opportunity to challenge or respond to.  The Court ruled that it was not new evidence, only reconsideration with a redefinition of scope.  Any effects of the photographs were neutralized by the fact that each ARB board member personally visited the site uninfluenced by either party.  The remainder of the Leffel’s arguments were poorly articulated and the Court dismissed them.  The Court affirmed the trial court’s decision.

Archives

Categories