Contempt of Court Holding Affirmed in Minnesota Wind Turbine Case

by Andrea Vaage and Gary Taylor

City of Orono v Nygard
Minnesota Court of Appeals, June 1, 2015

Jay and Kendall Nygard constructed a wind turbine in their backyard in Orono, Minnesota in violation of the City’s zoning code, and after they were denied a permit to do so.  The Nygards challenged the denial in district court and lost; however, in a 2012 decision the Minnesota Court of Appeals reversed and remanded the district court’s decision, finding that list of permitted uses in the zoning code – which did not include wind turbines – was not exhaustive.  On remand the city sent the Nygards a series of questions designed to help the city determine the relevant provisions of the zoning code, which the Nygards refused to answer.  The city thus denied the permit again. The district court supported the denial and ordered the Nygards to remove the wind turbine, pole, and concrete pad supporting the structure. The Nygards refused to comply, whereupon the district court found them in constructive civil contempt of court. The Nygards attempted to stay the contempt proceedings, which the district court denied, leading to this appeal. The Nygards first argued the court lacked subject matter jurisdiction to find them in contempt because contempt proceedings arose from their failure to comply with the district court’s order in their permit dispute, and the district court lacked subject matter jurisdiction over that permit dispute.

Subject matter jurisdiction refers to the ability of a court to adjudicate a class of actions and the questions in those actions. In Minnesota, the party attacking subject matter jurisdiction must show the court lacked authority as well as prove one of three factors:  (1) The subject matter of the action was so plainly beyond the court’s jurisdiction that its entertaining the action was a manifest abuse of authority; (2) Allowing the judgment to stand would substantially infringe the authority of another tribunal or agency of government; or (3) The judgment was rendered by a court lacking capability to make an adequately informed determination of a question concerning its own jurisdiction and as a matter of procedural fairness the party seeking to avoid the judgment should have opportunity belatedly to attack the court’s subject matter jurisdiction.

The Court of Appeals found the Nygards never presented the district court with any evidence or argument to support the existence of any of the three factors, and the Court of Appeals therefore refused to consider the arguments for the first time on appeal.  The Nygards then argued the district court lacked subject matter jurisdiction because the Nygards failed to exhaust all administrative remedies by making an administrative appeal. However, Minnesota law only allows municipalities to make that defense, not the applicant.

The Court affirmed the district court’s judgment and ordered the Nygards to comply with the earlier order to remove the wind turbine and its components.

Federal district court should not decide state law claims associated with nude dancing establishment suit

by Andrea Vaage

Green Valley Investments v Winnebago County
Federal 7th Circuit Court of Appeals, July 27, 2015

Stars Cabaret, a nude dancing establishment owned by Green Valley Investments, opened in Winnebago County, Wisconsin in 2006. At that time, Winnebago County regulated adult entertainment establishments under Ordinance 17.13, which required the establishment of an “adult entertainment overlay [AEO] district.” The AEO district was to be located within an at-the-time undefined “B-3 Highway Business District.” A conditional-use permit issued by the county to the operator of the business was also needed, which, among other things, required that no alcoholic beverages be sold in the AEO district.

The cabaret offered nude dancing and also served alcoholic beverages. The cabaret never sought a permit to operate the business under Ordinance 17.13; instead, Green Valley sued for declaratory and injunctive relief, arguing the ordinance was an unconstitutional First Amendment restriction on expression. The case was dismissed without prejudice when the County amended the ordinance during the suit. Another series of suits and subsequent modifications to the ordinance ensued. Finally, in 2012, Green Valley requested that Stars Cabaret be allowed to operate as a nonconforming use. The County did not agree to this request, leading to this suit.

Green Valley asserted that since the initial ordinance was unconstitutional, and Stars Cabaret was established and in operation before the invalid ordinance was amended, it was legal from the outset, “reasoning that anything is legal that is not forbidden.”  As a part of this position Green Valley filed a supplemental claim under state law seeking a declaration that the use was lawful in 2006 and should now be considered a nonconforming use. The district court found that parts of the 2006 ordinance were unconstitutional, but these could be severed from the rest of the ordinance, leaving the setback and alcohol provisions intact. The federal district court found that Stars Cabaret would not have been legal if these provisions were kept in place. Green Valley appealed.

Thus the 7th Circuit Court of Appeals was faced with two questions: the federal question of the constitutionality of the original ordinance, and the state law questions of nonconforming uses and severability. On the first issue, the Court found the 2006 ordinance was an impermissible prior restraint on speech because it left it up to the discretion of a local body, using ambiguous standards, to allow or deny the the speech.

The state law questions were more complex.  The district court had to determine if the remainder of the ordinance could be modified under the power of severance or if this remainder could function as a standalone law if additions or modifications were necessary to make it a valid freestanding zoning provision. These questions are considered by a federal court under supplemental jurisdiction since such claims are a matter of state law. The Court found no precedent set by Wisconsin which would answer either question. Although the district court had the ability to exercise supplemental jurisdiction, it need not have done so. In this case, the state law claims “substantially predominate over the claim or claims over which the [federal] district court has original jurisdiction.” The federal district court was not properly equipped to answer the state law questions brought up in this case, and should not have exercised supplement jurisdiction.

The Court found that, once the district court determined part of the 2006 ordinance was unconstitutional, they should have relinquished jurisdiction over the supplemental state claims and dismissed them without prejudice. The federal district court’s decision was reversed and remanded.

Winona, MN rental ordinance case dismissed as moot by Minnesota Supreme Court

by Andrea Vaage and Gary Taylor

Dean v City of Winona
Minnesota Supreme Court, August 5, 2015

This is an update on the Winona, MN case from last year, which can be found here. To recap, homeowners wishing to obtain a rental license in Winona cannot do so if 30% of the properties on their block are already rental properties. The question before the court was whether the 30% rental rule was a valid exercise of the city’s police power, and whether the ordinance was a violation of their equal protection rights under the Minnesota Constitution. The district court granted summary judgment to the City of Winona and the court of appeals affirmed. The applicants then filed a petition for review, which was granted in May 2014.

The City moved to dismiss the appeal for lack of jurisdiction, arguing that the case was moot. Minnesota courts have established “an appeal should be dismissed as moot when a decision on the merits is no longer necessary or an award of effective relief is no longer possible.”  Of the three original plaintiffs in the lawsuit, two no longer owned their properties, and the third received a rental license from the city.  While acknowledging that their claims were technically moot, they nevertheless argued that they fell within either or both of two narrow exceptions to the mootness doctrine: (1) that the issue being litigated is capable of repetition, yet likely to evade review, and/or that the case is “functionally justiciable” and of “statewide significance.”

The first argument was quickly dispatched by the court since the ordinance, which is continuing to be enforced by the city, is open to challenge at another time.  The claims against the ordinance, therefore, are still capable of being reviewed by the courts.

As for the second argument, the Court concluded that the case is not of statewide significance.  Although other cities do have rental ordinances they do not all operate in the same manner as the Winona ordinance. While the right to rent is an important property interest, the only population affected in this case was the homeowner’s pursuing a rental license in this one municipality, hardly an urgent or impactful case calling for the application of a narrow exception to the mootness rule.

The appellants’ claims were considered moot and the case was dismissed.

Wisconsin town zoning board has no jurisdiction in shoreland zoning area regulated by county

by Kaitlin Heinen

Stephen Hegwood v. Town of Eagle Zoning Board of Appeals
(Wisconsin Court of Appeals, September 25, 2013)

Stephen Hegwood owns shoreline property in the town of Eagle upon which he built an outdoor fireplace and pergola…located, respectively, fourteen and eight feet from the lot line.  The property was in an area under the jurisdiction of the Waukesha County shoreland zoning ordinance. Hegwood applied for variances from the county’s twenty-foot setback requirement after these structures were built. Waukesha County conditionally approved both. Then Hegwood applied for variances from the town of Eagle’s twenty-foot setback requirement, but the Town Zoning Board Appeals denied his application. Hegwood filed for certiorari in circuit court. The court reversed the Board’s decision, so the Board appealed to the Wisconsin Court of Appeals.

The Board argued the circuit court erred when it reviewed Hegwood’s appeal as a certiorari action. However, both Hegwood and the Board agreed that Wis. Stat. § 62.23(7)(e)10 governed an appeal of a board of appeals’ decision, which states that “[a]ny person … aggrieved by any decision of the board of appeals … may … commence an action seeking the remedy available by certiorari.” On certiorari review, the court must presume the correctness of the board of appeals’ decision and review the board’s decision to determine whether it “(1) kept within its jurisdiction; (2) proceeded on a correct theory of law; (3) acted in an arbitrary, oppressive or unreasonable manner that represented its will and not its judgment; and (4) ‘might reasonably make the order or determination in question based on the evidence.’” Hegwood was an “aggrieved person” and was “specifically authorized…to seek relief by means of a certiorari action,” according to Wis. Stat. § 62.23(7)(e)10. The statute also allowed the court to determine whether the Board proceeded under a correct theory of law. Thus Hegwood’s action was appropriately brought as a certiorari action.

In addition, the Board argued the court erred in concluding that the Board proceeded on an incorrect theory of law when it applied the town’s zoning code to the fireplace and pergola. Hegwood argued that “Wis. Stat. § 59.692 vests counties with the exclusive authority to zone shorelands.” However, the Board countered that “there is no specific statutory language prohibiting towns from adopting and enforcing zoning ordinances affecting shorelands and that it is permitted to do so pursuant to its village powers.”

The court has previously held that the “legislature has given shoreland zoning authority to counties.” The court concluded that towns do not have zoning authority over the same shorelands, except for limited circumstances, and proceeded to examine the possibilities for town jurisdiction over shorelands asserted by the town.

Wis. Stat. § 281.31 (the “Navigable waters protection law”) subsection (1) “authorize[s] municipal shoreland zoning regulations.” Subsection 2(c) of that statute defines a “municipality” as “a county, village, or city”—towns are not included. Furthermore, Wis. Stat. § 281.31(2)(e) provides that “‘Regulation’ means ordinances enacted… pursuant to any of the zoning…powers delegated by law to cities, villages and counties.” The court reasoned that “[h]ad the legislature intended to generally permit towns to regulate shorelands, we would expect to see a reference to such authority in § 281.31; but no such reference is made.”

The court also considered Wis. Stat. § 59.692 (“Zoning of shorelands on navigable waters”). Subsection 59.692(1m) states that “each county shall zone by ordinance all shorelands in its unincorporated area.” Subsection (2)(a) states that “ordinances…related to shorelands and enacted under § 59.692 ‘shall not require approval or be subject to disapproval by any town or town board.’” The legislature “specifically prohibited towns from having authority to approve or disapprove of county shoreland ordinances operating within the town.” Additionally, subsection (2)(b) established that town regulations in regards to shorelands would have effect only “if they were in existence before enactment of the county ordinance and were more restrictive than the county provisions affecting the same shorelands.” In this case, the town ordinance was adopted after the county ordinance. Even in regards to the DNR’s shoreland zoning standards (Wis. Stat. § 59.692(4)(a)), “the legislature did not include a reference to towns.”

The Board also claimed that it acted appropriately because the town had concurrent zoning authority with the county over shorelands and that it had the authority to reject Hegwood’s application for a variance, since the town passed the zoning ordinance pursuant to village powers. The statute the Board points to (Wis. Stat. § 60.22(3)), however, clearly indicates that “permitting general town regulation of shorelands under village powers does conflict with the statutory scheme of Wis. Stat. §§ 281.31 and 59.692…[and] deliberately excludes towns from having shoreland zoning authority.” The court concluded that from “[t]he plain language of…Wis. Stat. §§ 281.31 and 59.692, the legislature intended that towns would not have authority to regulate shorelands.” Thus, the Board’s claim of authority failed.

The Wisconsin Court of Appeals concluded that the Board had no authority to consider Hegwood’s application for variances. “Had the Board proceeded on a correct theory of law, it would have recognized that Hegwood’s property was subject only to the county’s shoreland zoning ordinance and dismissed his application for the variances as unnecessary.”  The circuit court’s reversal of the Board’s decision was affirmed.

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