Category: Due Process

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

Gary Taylor

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.

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

Gary Taylor

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.

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Ordinance prohibiting lot splits found constitutional

Gary Taylor

by Victoria Heldt

Richard W. Guse and Clara Guse v. City of New Berlin and Common Council of the City of New Berlin
(Wisconsin Court of Appeals, January 18, 2012)

The Guses own a lot in the Hillcrest Terrace Subdivision in the City of New Berlin.  They wanted to divide their existing lot into two lots, with each measuring approximately 29,000 square feet with a width of 147 feet.  The average lot within the subdivision contained approximately 41,000 square feet and measured 181 feet wide.  Both the New Berlin Plan Commission and the New Berlin Common Council denied the Guses’ request based on NBMC §235-23(G).  This ordinance allows the City to prohibit new lots that are smaller than or not as wide as existing lots in the subdivision.  It also allows the city to prohibit the formation of new lots in a subdivision that is more than 25 years old.  The Guses appealed the decision to the district court, arguing that the ordinance was unconstitutionally vague and that the Council’s denial of their request was arbitrary, unreasonable, and discriminatory.  The court agreed and reversed the Council’s decision, ruling in favor of the Guses.  The City appealed.

The Court looked first to the constitutionality of NBMC §235-26(G).  An ordinance is unconstitutionally vague if “it fails to afford proper notice of the conduct it seeks to proscribe or if encourages arbitrary and erratic enforcement.”   The Guses argued it was vague because it did not set forth adequate standards for the City to consider when deciding whether to allow such a lot split.  The Court looked to previous judicial decisions regarding vague statutes and ordinances.  In the case of Humble Oil, the Court struck down an ordinance that allowed a city to prohibit gas filling stations.  In the ordinance in that case, the only factors that were to be considered when deciding on a permit were public health, safety, convenience, prosperity, or general welfare.  The Court deemed those standards to be too vague and concluded there should be some standards to guide the municipality’s actions.

Next the Court looked to cases in which it upheld statutes and ordinances.  In Wadhams Oil Co. v. Delavan the Court upheld an ordinance allowing the city to prohibit a gas station to be placed within 165 of the main street of a city.  In Smith v. Brookfield, the Court upheld an ordinance that required the submission of location and a plan of operation before a board would allow certain types of businesses.  It also contained language in the preamble that required consideration of general welfare objectives.  After analyzing those cases, the Court concluded that “ordinances may vest boards with some (and even significant) discretion without being unconstitutionally vague.”  Turning to the ordinance in question, the Court determined that the New Berlin Municipal Code clearly outlines three considerations for the court to consider when contemplating the issuance of a permit, so it is not unconstitutionally vague.

The Guses further argued that the Council’s decision to deny the request was arbitrary because the lot in question is relatively large compared to those around it, and that the denial was unreasonable because it “lacked a health, safety, or general welfare basis.”  The Court noted that the existence of differences in decisions is not necessarily indicative of arbitrariness.  In making the decision, the Council considered the criteria of the statute and citizen’s opposition to the division, so there was clearly a rational basis for the decision.

The Guses finally argued that the decision was discriminatory because the Council previously approved lot divisions that created lots smaller than the average lot size within the subdivision.  The Court found this claim to be unsupported by the record.  The Guses presented evidence of previous lot divisions, but no evidence of how those lots compared in size to surrounding lots.  The Court reversed the trial court’s decision, ruling in favor of the City.

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Surface water permit holders not entitled to a predeprivation hearing when DNR issues notices to cease witdrawals

Gary Taylor

by Gary Taylor

Keating v. Nebraska Public Power District, Nebraska Department of Resources, et al.
(Federal 8th Circuit Court of Appeals, November 8, 2011)

Due to a decrease in water levels in the Niobrara watershed, in 2006 the Nebraska Public Power District (NPPD) requested that the Nebraska Department of Natural Resources (DNR) issue Closing Notices (notices to cease water withdrawals) to hundreds of farmers and ranchers who held surface water appropriation permits that were junior to those permits held by NPPD. In the summer of 2007, the DNR issued such Closing Notices to junior permit holders without providing them notice or a hearing prior to the issuance of the Closing Notices. The appellants filed suit, arguing that the Closing Notices effected a property deprivation, and accordingly they were entitled to the procedural due process protections of a predeprivation hearing. The district court dismissed the suit, holding that the claim was not ripe and that appellants had not exhausted administrative remedies prior to filing the complaint.  After an initial decision, an appeal to the 8th circuit and a remand, district court determined that although the appellants held a property right that entitled them to use the surface waters of the Niobrara River, that right was qualified and subject to the DNR’s administration of the appropriation system. Also, the district court held that the DNR’s administration of the system did not cause the appellants to suffer a deprivation of their property rights. Accordingly, the district court granted summary judgment in favor of the appellees.

In this case the appellants argue they are entitled to a predeprivation hearing prior to the DNR conducting its administration of the Niobrara Watershed and issuing Closing Notices. Specifically, appellants seek a predeprivation hearing to challenge the validity of the NPPD’s permits on the grounds that the NPPD was not beneficially using its appropriation to produce power and to challenge the DNR’s determination of water scarcity.  In addressing the right to a hearing – due process question – a court must first determine whether state action has deprived an individual of a protected property interest, and only after finding such a deprivation does the court consider whether available procedures for challenging the deprivation satisfy the requirements of due process. The US Supreme Court “usually has held that the Constitution requires some kind of hearing before the State deprives a person of liberty or property.”  The 8th Circuit noted that the parties agreed that a water permit entitling the holder to use surface water within the capacity limits of the Niobrara Watershed represents a property right under Nebraska law. That right, however, is not one of ownership of the surface water prior to capture. Instead, the holder of a permit acquires the rights granted by the permit, and is subject to constraints articulated by the permit. Here, the appellants’ permits allows them to use specific amounts of surface water so long as there is sufficient capacity, subject to the rights of senior appropriators and subject to regulation by the State through the DNR.  Appellants argued that when the DNR administers the Niobrara in a manner that requires permit holders to stop taking water, the state should conduct a hearing to give permit holders an opportunity to challenge the DNR’s determination that there is a scarcity.  The 8th Circuit rejected this argument. On the face of the permits, permit holders are warned that there are periods of time when water supply on the Niobrara River is insufficient to meet the demands of all appropriators and that permit holders are “hereby given notice that [they] may be denied the use of water during times of scarcity.” Thus, when the DNR determines that the watershed no longer has the capacity to supply all permit holders, appellants no longer have a legitimate claim of entitlement to use the surface water and thus do not suffer a deprivation of a property right.  The 8th Circuit affirmed the determination of the district court that appellants did not suffer a deprivation of their property rights by the DNR’s actions.

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Conditional use permit criteria not vague; recusal of board member negates claim of bias

Gary Taylor

by Victoria Heldt

Gage Inc., LLP v. Village of Sister Bay
(Wisconsin Court of Appeals, July 6, 2011)

Gage Inc., LLP wanted to develop a three-story condominium/hotel in downtown Sister Bay.  The district in which they planned to build was zoned “B-3 Downtown Business District” and was adjacent to property owned by the Village president, Denise Bhirdo.  Gage planned to set aside 34 of the units as residential condominiums and utilize the rest of the units as hotel rooms.  While the B-3 district zoning regulations allowed buildings to be used as hotels, a condominium/hotel would require a conditional use permit.  The Village Plan commission recommended denying the permit after several public hearings.  Subsequently, the Village Board voted to deny the conditional use permit.  Gage appealed to the district court, which affirmed the Board’s decision.

Gage first argued that the Village’s conditional use provision in the zoning ordinance was unconstitutionally vague because it failed to describe what factors will influence whether a permit is issued or not issued.  The Court noted that the zoning code defines conditional uses as “uses of a special nature as to make impractical their predetermination as a permitted use in a district…which are designed to cover situations where a particular use, although not inherently inconsistent with the use classification of a particular zoning district, may create special problems and hazards if allowed to develop and locate as a matter of right in a particular zoning district.”  The zoning ordinance also describes the intent of the B-3 Downtown Business District which is to “offer greater flexibility in area requirements and setback requirements than other districts in order to promote the reuse of buildings and lots and the construction of new developments…consistent with the existing scale of development.”  The zoning provision also states that “conditional uses will be reviewed to see if they are in accordance with the purpose and intent of the chapter and is found to be not hazardous, harmful, offensive or otherwise adverse to the environment or the value of the neighborhood or the Village.”  The Court concluded that the conditional use ordinance, in tandem with the B-3 district statement of intent, was sufficiently definite.  The Court noted that general  criteria or standards for conditional uses have previously been accepted by the Court, and that allowing the Board to exercise its discretion is indeed appropriate.  “[For example] an ordinance regulating site development need not be created with a particular degree of specificity other than is necessary to give developers reasonable notice of the areas of inquiry that will be examined in approving or disapproving the development.”  For these reasons, the Court concluded that the conditional use ordinance was sufficiently definite.

Gage also claimed that the Board’s decision was arbitrary and without sufficient evidence.  He argued that the very same building he was proposing would be acceptable if all of the rooms were used as hotel rooms, so the only relevant issue is the intended use of 34 of the rooms.  Therefore, he reasoned that the entire project could not be denied based only one aspect of the project.  The Court noted that Gage cited no authority for this argument and disregarded it.  In any case, the Court ruled that the Board based its decision on protecting the intent of the downtown district.  It was meant to remain a primarily commercial area and to encourage business for the surrounding restaurants and shops.  Residential condominiums have a lower turn-over rate and house residents who are more likely to eat in and not do as much business in the downtown area.  In addition, condominium owners in a vacation area such Sister Bay usually reside more permanently elsewhere, so the condominiums could sit vacant for a good portion of the year.  Therefore, the Court reasoned that the Board correctly based its decision on protecting the welfare of the surrounding area.

Gage also contended that there was a high risk of bias in the decision since Denise Bhirdo (adjacent property owner) sat on both the Village Plan Commission and on the Village Board.  Gage claimed he negotiated with Bhirdo prior to his request for a permit regarding the project and agreed to purchase her property.  He testified that, after his plans changed and he did not need her property, she opposed the plan and influenced the Board.  The Court ruled that there was no impermissible risk of bias since Bhirdo excused herself from all public hearings of both the Planning Commission and the Village Board and did not case any votes regarding the case.

The Court affirmed the district court’s ruling in favor of the Village.

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Rezoning in compliance with court order not a taking

by Melanie Thwing

Bettendorf v. St. Croix County
(Federal 7th Circuit Court of Appeals, January 20, 2011)

John Bettendorf owns property in St. Croix County, WI. Although the property was originally zoned agricultural-residential in 1972 he began to run a carpet business out of his basement. Then in 1974 he began to run an excavating company from the property. In 1984 Bettendorf applied to the County to re-zone a portion of his land to commercial.  The the application was approved with the stipulation that the rezoning was not transferable to any subsequent landowner, and upon such a transfer, or Bettendorf’s death,  the zoning classification of the property will revert to agricultural-residential. Bettendorf used the property in a commercial manner after the ordinance was enacted, but fully knowing that the language of the permit would not allow him to regain any commercial investment when he went to sell the property Bettendorf petitioned to make the re-zoning permanent. In 2004, Bettendorf filed an action in the Circuit Court for St. Croix County seeking a declaratory judgment that the conditional language was void and should be stricken from the ordinance. The circuit court found in favor of Bettendorf, but on appeal the Wisconsin Court of Appeals held the ordinance void in its entirety. In July 2007, the circuit court entered a revised judgment and order rescinding the commercial zoning of the disputed parcel in accordance with the Court of Appeals’ decision. The County complied with the order by rescinding the commercial zoning designation.  Bettendorf then sued in federal court.

Bettendorf argued that the County’s rescission of the commercial zoning designation following the court’s decision constituted a taking. He also argued that he was not given appropriate substantive and procedural due process protections. The Federal 7th Circuit observes that to prove a regulatory taking the government action must deprive the landowner of “all or substantially all practical uses of the property.” Bettendorf argued that the court did not adequately consider his anticipated and distinct investment opportunities. The court disagreed, stating that Bettendorf made improvements to his property with full knowledge that the commercial zoning classification was not going to be permanent.  When he began litigation he fully assumed the risk that the scope of the ordinance could be reinterpreted. Bettendorf still maintains full use of his property for agricultural and residential purposes, which simply restores the land to its original use.

Bettendorf argued he was “denied the protection of the substantive legal standards that would have been applied to a change in zoning….” The court found this argument to be without merit. The County’s decision to remove the commercial zoning designation was simply in accordance with the Court of Appeals decision. Therefore it could not be “conscious-shocking or arbitrary,” the showing needed to prove a substantive due process claim. 

As for Bettendorf’s procedural due process claim, Bettendorf was afforded the the opportunity to avail himself of due process protections through the state court system, yet he chose to bypass the state court appeals process. This seriously “undermines his argument that the state court process was deficient.” The Seventh Circuit ruled for the County on all claims.

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City fails to demonstrate rational basis for prohibition of billboard extensions

by Melanie Thwing

Clear Channel Outdoor v. City of St. Paul
(Federal 8th Circuit Court of Appeals, August 25, 2010)

Clear Channel Outdoor has owned and operated billboards in the City of St. Paul, MN since 1925. They regularly use billboard extensions when the customer’s needs require them. In St. Paul billboards until November 2000 were regulated with the zoning code, but were allowed. Then St. Paul, Minnesota Code §64.420 was passed which does not allow for any new billboards to be constructed. Effectively, the standing billboards were allowed as nonconforming uses. St. Paul Code §66.301(g) at the time still regulated the size and length of time for all extensions.

Then in March 2005 concerns about billboard extensions were brought to the city’s Planning Commission. The options of banning extensions altogether and allowing extensions through a permiting process were both discussed.  A resolution in support of the permitting scheme was ultimately adopted and transmitted to the city council. 

In August 2005 at a public hearing the City Council discussed the billboard extension issue, but laid the discussion over until November. During this time the Planning commission again took up the issue and again rejected the outright prohibition of billboard extensions.  Dispite this, in March 2006 the City Council adopted Ordinance 06-160, which prohibited all billboard extensions. The minutes did not reflect any discussion of costs or benefits of the ordinance.

Clear Channel filed a complaint in federal district court claiming (1) unconstitutional and unreasonable use of police power and (2) violation of Clear Channel’s due process and equal protection laws. After two years of mediation the parties were not able to reach an agreement. In January 2009 the district court ultimately found the ordinance arbitrary and capricious and therefore void because no rationale for the City Council’s decision was presented.

The City appealed the district court decision to the 8th Circuit Court of Appeals, arguing that the district court applied the wrong standard. Honn v. City of Coon Rapids was the precedent cited by the district court. Honn declares, “…[t]he municipal body need not necessarily prepare formal findings of fact, but it must, at a minimum, have the reasons for its decision recorded or reduced to writing and in more than just a conclusory fashion…” Clear Channel countered that the city was originally in favor of using the Honn standard, and originally argued it was controlling.

The 8th Circuit agreed with Clear Channel’s argument, citing specific instances where the city said Honn was controlling. Also, the 8th Circuit concurred that Honn was applicable because the procedure it announced should be followed in ‘any zoning matter, whether legislative or quasi-judicial…” Honn has legislative authority fromMinn. Stat. §462.357, subd 1, which gives a municipality the authority to regulate buildings and structures, which is the core of this case. It is concluded that Honn is applicable.

Secondly, the city argues that even if Honn is applicable, the district court was in err because it did not allow a trial that would have allowed the City to demonstrate the rational basis for its decision. The 8th Circuit noted, however, that the City had assured the district court that the record was complete and that a decision could be made. Honn does state that a trial may be allowed, but not required.  A trial is not made available simply “…to provide local governments with a routinized opportunity for a second bite at the apple by neglecting to provide and adequate record for review.” As long as the record is complete, as was the case here, no trial is necessary. The City failed to prove a rational basis for the ordinance prohibiting billboard extensions in any documents provided. The court refused to remand the case and affirmed the district court decision.

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County attorney serving multiple roles in condemnation case creates impermissible likelihood of bias

by Melanie Thwing

Davenport v. Morris County Board of County Commissioners
(Kansas Supreme Court, September 10, 2010)

In February of 2000, the Morris County Board of County Commissioners in Kansas decided to vacate 2 roads. Davenport Pastures, LP filed a written application for damages because these roads accessed a ranch they leased. Without a hearing the Assistant County Attorney drafted a letter on the Boards behalf, rejecting the application. The matter was brought before the district court, which awarded Davenport $30,000.

The County Board appealed and the Court of Appeals remanded the case back to the County Board for further proceedings. After the remand the Assistant County Attorney pressed the Board to have a hearing, and on separate occasions took two commissioners to view the roads. At the attorney’s recommendation appraiser David Sundgren was hired. A hearing was held and the attorney acted as legal council for the Board, and cross-examined Davenport Pastures’ experts as well as Sundgren, who appraised damages of $4,050. The Assistant County Attorney also ultimately wrote the final decision of the Board.

Arguing that the Assistant County Attorney’s multiple roles violated due process, Davenport Pastures appealed. Neither the district court nor the Court of Appeals found sufficient evidence that his dual roles, “actually affected the Commission’s decision.”

Before the Kansas Supreme Court, Davenport Pastures argued that the multiple roles played by the attorney deprived them of their Fourteen Amendment right to due process. The Court cites Powers v. State Department of Social Welfare where the Department appointed its own attorney to preside over a “fair hearing,” and where the lawyer later represented the Department in the appeal. The Court in Powers found the double roles, “highly improper,” and a clear conflict of interest.”  Further, in Coats v. U.S.D. a similar situation occurred where a school’s selection board choose one of its own attorneys to serve on a hearing committee. The Court in Coats found, “[T]he school board’s appointment of its own attorney to the hearing committee violated the rule of fundamental fairness… Such a blatant defiance of due process cannot be countenanced…”

The Kansas Supreme Court concluded that having the Assistant County Attorney represent the Board on almost all matters in this proceeding caused a risk of bias that is too high to be constitutional. He first played a role of legal advisor, second as the sole advocate for the Board, and third as an adjudicator because he had advised the Board to hire Sundgren, brought the commissioners to see the road, and drafted the decision. The Court observed that “…due process is violated when, under all the circumstances of the case, the ‘probable risk of actual bias [is] too high to be constitutionally tolerable.” The case was remanded back to the Board County Commissioners for reconsideration.

Conflict of interests and/or bias, Due Process, Kansas courts , , ,
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Developer had protected property interest in commercial designation of development plan

by Melanie Thwing

Wedgewood v. Township of Liberty, OH
(Federal 6th Circuit Court of Appeals, June 28, 2010)

In 2003, Wedgewood Limited Partnership entered into agreements to build a Wal-Mart and a gas station in Subarea 3 of the Planned Unit Development (PUD)  of the Wedgewood Commerce Center (WCC) in Liberty Township, OH.  The Trustees had rezoned the land to PUD in 1991, and the WCC Development Plan (WCCDP) was approved in 1992.  Subarea 3 totaled 220, 857 square feet. The WCCDP specified that only areas 3, 8, and 9 (a total of 499,930 square feet) were to be used for commercial development, although Subareas 4, 5, 6 and 10 had obtained permits from 1992 to 2003 to develop approximately 390,611 of commercial space.

In October of 2003, Wedgewood filed an application to amend the WCCDP to increase the land in area 3 to 227,825 square feet for the Wal-Mart project.  The project met significant opposition from the community, and the amendment was denied.  After months of increasing opposition, the Trustees in 2004 issued a set of “Zoning Instructions” meant to clarify the current WCCDP. These Instructions indicated a “floating cap” of 500,000 square feet of commercial zoning covering the entire WCC, unless a “major” modification plan was submitted and approved.  The Trustees issued a public statement indicating that “analysis reveals that the commercial development completed to date, and substantially through the approval process, has consumed most of the square footage imposed by the development plan as an overall cap,” and that “we are instructing our zoning department to refrain from issuing any zoning certificates for additional commercial development” unless the proposal goes through the major modification process.

Later that year, Wedgewood again applied for a zoning certificate, but this time to build a smaller 220.597 square foot structure that would fit entirely within Subarea 3. It was not submitted as a major modification plan, and the Commission for Zoning cited this as the reason for denial. Wedgewood countered, filing a claim with the district court for the Southern District of Ohio under 42 U.S.C. § 1983. They argued that the Township’s adoption of the new Zoning Instructions violated Wedgewood’s procedural due process rights, and that the Zoning Instructions were void for vagueness. Summary judgment was granted in favor of Wedgewood, creating a permanent injunction preventing the Township from enforcing the new Zoning Instructions.  The Township immediately appealed to the Court of Appeals for the 6th Circuit.

§519.12 of the Revised Code of Ohio requires notice and a hearing before a zoning ordinance can be adopted or amended.  The Township argues this occurred in 1991 with the adoption of the PUD and the WCCDP, and that the document specifies a 500,000 square foot floating cap. Wedgewood counters that a floating cap had never entered discussion, and is not set forth anywhere in the WCCDP. The Court points out that if a floating cap was meant to exist, then it would be arbitrary to assign subareas 3,8, and 9 as commercial, and that it would ignore the strong correlation between the 500,000 square foot floating cap, and the 499,930 square foot total area for subareas 3, 8, and 9. The Court concludes that the Instructions, for these reasons, changed the WCCDP, which requires a hearing.

The Township then argues that Wedgewood had no protected property interest in the previous amendment procedures, while Wedgewood maintains it did. In Ohio a vested interest in property is given when an application for a building or zoning certificate is filed. Although Wedgewood did this, the Township counters that it was after the Instructions, meaning there was no interest prior. In Stile v. Copley Twp., the district court held a “protectable interest can arise under Ohio law when a government entity restricts a landowner’s ability to use his property.” Using this as a standard, the Court states that Wedgewood justifiably expected to use its land commercially up to 220,857 square feet, unless a proper amendment was passed.

The last issue is whether enacting the instruction without a hearing or providing prior notice to Wedgewood violated Wedgewood’s due process property interest. In Nasierowski Bros. Inv. Co. v. City of Sterling Heights the Court found that not providing notice has a severe and detrimental impact on how the owner can expect to use the land. This standard leads the Court to conclude that Wedgewood was singled out, that prior notice was mandatory, and that Wedgewood had the right to voice concerns.  The summary judgment for a permanent injunction was upheld.

Due Process, Federal courts, Procedural Issues, PUDs , , ,
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