Category: Preemption

Village junk vehicle ordinance broader than state traffic regulations, but validity of ordinance could not be determined

by Kaitlin Heinen

Village of North Hudson v. Randy J. Krongard
(Wisconsin Court of Appeals, March 12, 2013)

In November of 2011, the Village of North Hudson issued 2 citations to Randy Krongard for having 2 junk vehicles in plain view on his property, which was contrary to North Hudson Village Ordinance §§ 90-41 and 90-44. The vehicles were considered junk vehicles because they had expired registrations. In December, Krongard pleaded not guilty in municipal court; however, he did not appear at the scheduled trial, so the court entered default judgment against him. In March of 2012, Krongard moved to vacate the municipal court’s judgment because “90-44 is void, unlawful, and invalid as preempted, contrary to, and inconsistent with” Wisconsin state law.  His motion was denied. Krongard appealed to the circuit court, which also denied his motion, and then to the Wisconsin Court of Appeals. The Village argued that Krongard’s appeal was an improper one because Krongard should be prohibited from appealing a default judgment. However, Krongard appealed the order denying his motion to vacate the default judgment. So Krongard’s appeal was properly before the circuit court and the Wisconsin Court of Appeals.

Before the court, Krongard argued that the circuit court wrongly denied his motion because the judgment against him was void, since the Village’s junk vehicle ordinance was invalid based on its conflict with state traffic regulations. An ordinance regarding traffic regulation “must be in strict conformity with state law,” otherwise it will be preempted. Krongard asserted the conflict stemmed from the ordinance’s defining unregistered vehicles as junk vehicles and regulating unregistered vehicles on private property. Wis. Stat. § 340.01(25j) does not include unregistered vehicles in its definition of a “junk vehicle.” Instead it defines a “junk vehicle” as a “vehicle which is incapable of operation or use upon a highway and which has no resale value except as a source of parts or scrap” and a “vehicle for which an insurance company has taken possession of or title to if the estimated cost of repairing the vehicle exceeds its fair market value.” Also, state traffic regulations allow for vehicles to be parked on private property with the owner’s consent and only permit municipalities to regulate unregistered vehicles on highways. So Krongard held that the Wisconsin Court of Appeals must conclude the ordinance is invalid, rendering his judgment void.

The Village counter-argued that the state traffic regulations are concerned “with the licensing, regulation of, outfitting and operation of vehicles” and its ordinance is “concerned with the upkeep of private property,” which are “two completely different issues.” The Village also contended that its junk vehicle ordinance is not inconsistent with or contrary to the state’s definition of a junk vehicle.  The Village argued that, under Wis. Stat. § 340.01(25j), a vehicle is junk if it is not capable of legal operation on the highway, and an unregistered vehicle is incapable of legal operation on the highway and therefore constitutes a junk vehicle.  Finally, the Village contended that parking motor vehicles is different than storing vehicles on private property.

The Wisconsin Court of Appeals concluded that nothing in the state traffic regulations provides that a municipality can regulate unregistered vehicles on private property and that Wis. Stat. § 340.01(25j) defines a junk vehicle as one that is inoperable, not legally inoperable.  Therefore, the Village’s definition was broader than the traffic regulation. The ordinance requires owners of junk vehicles to notify and return the vehicle’s certificate of title to the Department of Transportation, but requires owners of unlicensed vehicles to keep their vehicles out of the public’s view. As such, the Village’s argument regarding the purpose of the ordinance and the ordinance’s language itself suggest that the ordinance is not a traffic regulation and the Village did not enact it pursuant to the power granted under the state traffic regulations.  Instead, it appears the ordinance may have been enacted using a different power, such as its zoning authority. However, because it could not be determined from the record whether the ordinance in question was a traffic regulation or part of a different regulatory scheme, the Wisconsin Court of Appeals reversed and remanded the order to the circuit court to determine the validity of the Village’s ordinance.

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Hamburg (IA) adult business licensing scheme preempted by state law

Gary Taylor

by Gary Taylor

Mall Real Estate, LLC v. City of Hamburg
(Iowa Supreme Court, July 27, 2012)

In 2008, the Hamburg city council passed its “Sexually Oriented Business Ordinance.” It contains provisions relating to licensing and zoning and imposes a range of regulations upon sexually oriented businesses.  Businesses subject to the terms of the ordinance include adult cabarets, which the ordinance defines, among other things, as any “business or entity that is with the emphasis on observation or viewing of nude or semi-nude performances whether the performers receive compensation or not, that regularly features persons who appear nude or semi-nude.” The ordinance requires a sexually oriented business to have a valid sexually oriented business license and an employee of a sexually oriented business to have a valid sexually oriented business employee license. Further, the ordinance regulates many aspects and activities of sexually oriented businesses, including the consumption of alcohol on the premises, exterior design aspects of the businesses including signage, hours of operation, the exhibition of sexually explicit films, live nudity, and siting. For example, the ordinance prohibits any person from intentionally or knowingly appearing in a state of nudity or from intentionally or knowingly violating Iowa Code section 728.5. The ordinance contains requirements that seminude employees remain more than six feet away from customers and on a stage at least two-feet high. It also prohibits the exchange of gratuities between customers and seminude employees and prohibits intentional contact between customers and seminude employees.  If a sexually oriented business licensee violates the ordinance or knowingly allows an employee to violate the ordinance, then the City may suspend or revoke the license of the business and the employee.

Mall Real Estate (MRE) leases space in Hamburg to the Hamburg Theatre for the Performing Arts, aka Shotgun Geniez.  Performers at the Hamburg Theatre perform nude, seminude, and fully clothed. At times during performances, performers physically contact customers, often by sitting in their laps. The performers also spend time talking to customers. The Hamburg Theatre does not have a liquor license or sell alcohol, but it does allow customers to supply their own alcohol.  Shortly after the City adopted the ordinance MRE filed a lawsuit seeking to declare the ordinance unconstitutional, and also that the ordinance is in conflict with, and is therefore preempted by state law. The district court upheld the validity of the Hamburg ordinance, and MRE appealed.  The Iowa Supreme Court decided the case on the preemption issue and did not address MRE’s constitutional claims.

MRE argued that because Iowa Code 728.5(3) creates a “theater exception” to the regulation of obscenity and the Hamburg ordinance did not, the ordinance is therefore in conflict with and preempted by state law.  The City argued that the final sentence of 728.11 – also in the state code chapter pertaining to obscenity – allows local governments to pass ordinances related to zoning and licensing of businesses dealing in obscene materials.

Iowa Code 728.5 provides in part:

1.  An owner, manager, or person who exercises direct control over a place of business required to obtain a sales tax permit shall be guilty of a serious misdemeanor under any of the following circumstances:
a.  If such person allows or permits the actual or simulated public performance of any sex act upon or in such place of business.
b.  If such person allows or permits the exposure of the genitals or buttocks or female breast of any person who acts as a waiter or waitress.
[c.  through f. contain more such circumstances]
2.  However, if such person allows or permits a minor to participate in any act included in subsection 1, paragraphs “a” through “d”, the person shall be guilty of an aggravated misdemeanor.
3.  Except for subsection 1, paragraph “f”, the provisions of this section shall not apply to a theater, concert hall, art center, museum, or similar establishment which is primarily devoted to the arts or theatrical performances and in which any of the circumstances contained in this section were permitted or allowed as part of such art exhibits or performances.
Iowa Code 728.11 is a “uniform application” (preemption) provision. It states:
In order to provide for the uniform application of the provisions of this chapter relating to obscene material applicable to minors within this state, it is intended that the sole and only regulation of obscene material shall be under the provisions of this chapter, and no municipality, county or other governmental unit within this state shall make any law, ordinance or regulation relating to the availability of obscene materials.  All such laws, ordinances or regulations shall be or become void, unenforceable and of no effect on January 1, 1978.  Nothing in this section shall restrict the zoning authority of cities and counties.
The Iowa Supreme Court looked to its previous cases construing these provisions and concluded that Hamburg’s ordinance is preempted by the Iowa Code.  In Chelsea Theater Corp v. Burlington the Court determined that chapter 728 was not limited to the dissemination of obscene materials to minors, but rather restricted local governments from enacting any local ordinances regulating obscene materials.  This led the Court to examine whether live nude dancing constituted “obscene materials” as the term is used in 728.11.  “Materials” is defined in 728.(3) as “any book, magazine, newspaper or other printed or written material or any picture, drawing, photograph, motion picture, or other pictorial representation or any statue or other figure, or any recording, transcription or mechanical, chemical or electrical reproduction or any other articles, equipment, machines or materials.”  “Obscene materials” is defined in 728.(5) as “any material depicting or describing the genitals, sex acts, masturbation, excretory functions or sadomasochistic abuse which the average person, taking the material as a whole and applying contemporary community standards with respect to what is suitable material for minors, would find appeals to the prurient interest and is patently offensive; and the material, taken as a whole, lacks serious literary, scientific, political or artistic value.” The Court looked to legislative history to conclude that the legislature intended to include live nude dancing within the meaning of obscene materials in the code.  As a result, Hamburg’s attempt to regulate live nude dancing through its licensing ordinance was preempted by chapter 728 of the Iowa Code.

The Court noted that, contrary to the City’s assertion, the last sentence of 728.11 only creates an exception to the preemption for local zoning authority, not for licensing or permitting authority.  “Accordingly, unless a local ordinance is a zoning ordinance it is preempted to the extent it regulates material regulated by chapter 728.”

Chief Justice Cady and Justice Waterman each filed separate dissenting opinions.  Chief Justice Cady took issue with the reasoning the majority followed to find that “obscene materials” included live nude dancing.  “In the judgement of the majority, ‘materials’ means a dancer to our legislature.  This conclusion not only defies common sense, it defies our accepted rules of [statutory] construction….Thus, for the majority to conclude it would be absurd for our legislature to have left nude dancing out of its preemption scheme is itself absurd.”

Justice Waterman joined in the preemption analysis of Justice Cady, and wrote further to express his opinion that not only is the Hamburg ordinance not preempted, it passes constitutional muster under well-settled precedent.

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Wisconsin county allowed to regulate billboards under general zoning authority, even when town specifically regulated billboards

Gary Taylor

by Victoria Heldt

Adams Outdoor Advertising, L.P., and Town of Madison v. County of Dane
(Wisconsin Court of Appeals, February 2, 2012)

Adams Outdoor Advertising, L.P. (Adams) wanted to construct a billboard on a highway located in the Town of Madison (Town) and within Dane County (County).  Adams obtained permits to build the billboard from the Town and from the Wisconsin Department of Transportation, but not from Dane County.  In order to clarify whether a permit from the County was also necessary, Adams brought a declaratory judgment action in circuit court.  The trial court concluded that the Town’s billboard ordinance preempts the County’s billboard ordinance, so a permit from the County was unnecessary.  The County appealed.

The Court analyzed the various layers of zoning laws governing the area in order to decide whether a billboard in the Town of Madison is subject to both the Town’s zoning ordinance regulating billboards and to Dane County’s similar ordinance.   The County claims it has the authority to regulate billboards pursuant to Wis. Stat. §59.69 (4), which is a broad, general county zoning enabling act.  Wis. Stat. §59.70 (22) is a more specific statute stating that the County has the authority to regulate billboards built next to highways that the County maintains.  Since the highway next to the billboard in question is maintained by the Town, it does not apply to this case.  Wis. Stat. § 60.23 (29) grants authority to the Town to regulate billboards located along highways maintained by the Town or by the County in which the town resides.  The Court identified two issues:  whether the Court has authority to regulate billboards under its general zoning authority (Wis. Stat. §59.69) and, if so, does a Town ordinance preempt any such authority.

Within Wis. Stat. §59.69 the County points to Section 4, which authorizes it to regulate “the location of buildings and structures.”  The Court looked to the Webster’s Dictionary definition of a structure as “something constructed or built…something made up of more or less interdependent elements or parts.”  It also cited the phrase “billboards and other similar structures” which can be found in several zoning statutes as evidence that a billboard is considered as structure.  The court confirmed that a billboard fit the definition of a structure.  Consequently, the County does indeed have the authority to regulate the construction and maintenance of billboards under Wis. Stat. §59.69.

As to the question of preemption, the Court concluded that the Town ordinance does not preempt the County ordinance.  It noted that the Town had indeed approved the County’s ordinance and, therefore, it was in effect within the Town’s boundaries.  Additionally, nothing within the Town’s ordinance explicitly prohibits County regulation of billboards.   Although preemptive languages does exist within the statutory scheme for regulating billboards, it applies only to ordinances pursuant to Wis Stat. §59.70(22).  Dane County draws its billboard regulation power from Wis. Stat. §59.69.  The Court concluded that the Town’s ordinance does not preempt the County’s ordinance and acknowledged that “the County and the Town share regulatory authority over billboards located on property that abuts the subject highway maintained by the Town.”

The Court addressed Adams’ main arguments and rejected them all.  First, Adams claims that the County does not have authority to regulate billboards under Wis. Stat. §59.69 because the statute makes no mention of signs or advertisement of any kind.  The Court referred to its previous discussion of the definition of a structure.  Next, Adams argues that, since Wis. Stat. §59.70 and Wis. Stat. § 60.23 are more specific to billboards, they should prevail over the general zoning enabling statutes.  The Court replied by noting that this rule of statutory construction normally applies when two statutes conflict.  Here, the two statutes do not conflict, but rather allow for shared regulatory authority.  Third, Adams purports that the County manipulated its general zoning ordinance in order to avoid regulating billboards under the more specific Wis Stat. §59.70.  The Court dismissed that claim for lack of evidence.  Lastly, Adams argued that “the County’s interest in promoting aesthetics is not sufficient to warrant its exercise of authority over billboards.”  In response, the Court notes that the statute provides more concerns than simply aesthetic concerns, mainly public health and the safety of structures.  The Court concluded that the County does have authority under Wis. Stat. §59.69 to regulate billboards and that the Town’s billboard regulation ordinance does not preempt that authority.  It reversed the circuit court’s decision and ruled in favor of Dane County.

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Development agreements may be reached prior to public utility commission (MN) decision on permits

Gary Taylor

by Victoria Heldt

Concerned River Valley Citizens, Inc., et al. v. Chisago County, Lent Township, Sunrise River Energy, LLC
(Minnesota Court of Appeals, December 19, 2011)

Concerned River Valley Citizens, Inc. is a non-profit organization that works to promote the development of the St. Croix River Valley while protecting the environmental interests of the area.  Sunrise River Energy, LLC (SRE) is an affiliate of LS Power Group, a company that develops, manages, and operates power-generation facilities.  In 2008, LS Power voiced its desire to construct a power plant next to an existing one in the area and submitted a request to the Midwest Independent Transmission System Operator.  A power plant may not be constructed without a certificate of need and a site permit from the Minnesota Public Utilities Commission (MPUC).  It preempts all local zoning laws.

Prior to seeking the two documents from the MPUC, LS Power and SRE requested legislation to allow a personal-property-tax exemption for the power plant, which it received.  The statute included the conditions that SRE must receive approval from the county board and the township board.  SRE also submitted a development agreement to the county and township boards, both of which approved the proposal.  The agreement contained language that explicitly stated that the document did not serve as a substitute for the two necessary permits from the MPUC.  Concerned River Valley Citizens argued that the county and the township are prohibited from entering into an agreement with SRE until the two permits from the MPUC are obtained.  The district court dismissed the complaint based on failure to state a claim.

On appeal, Concerned River Valley Citizens argued that, because local zoning laws are not preempted until permits from the MPUC have been granted, the development agreement is unlawful since it violates local zoning laws.  The Court disagreed, finding that statute did not require MPUC permits to be obtained before entering into a development agreement.  It only required MPUC permits to be granted before the actual development of the property.  The Court also stated that the township did not act outside of its authority by entering into the development agreement since the agreement is contingent upon SRE getting the necessary permits.

Concerned River Valley Citizens further alleged that the development agreement violated their due process rights because it may have prejudiced future opinions of the project.  The agreement might have been perceived as governmental endorsement of the development before any permits were obtained.  They also claimed that it prevented the public from having a say in discussions regarding the location of the power plant.  The Court disregarded this claim, finding that Concerned River Valley Citizens’ assertions about the prejudicial effect of the development agreements were simply speculation unsupported by facts.  The Court affirmed the district court’s decision in favor of SRE and LS Power.

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Local ordinance permitted to define “available public sanitary sewer system” more broadly than state statute

Gary Taylor

by Victoria Heldt and Gary Taylor

Roger Newell and Arelene Newell v. Village of Otter Lake, County of Lapeer
(Michigan Court of Appeals, November 15, 2011)

The Newells own property in the Village of Otter Lake on which sits a structure with a working septic system.  In 2004, the Village created a special assessment for its public sanitary sewage system.  The Newells were assessed $10,475; however, they were of the opinion that the assessment should not be applied to them so they filed a complaint with the Michigan Tax Tribunal.  During the time between when the Newells filed their complaint and the time of their hearing, the Village enacted an ordinance that changed the definition of an “available public sanitary sewer system.”  Under the new definition any public sewer system that “crosses, adjoins, or abuts a parcel upon which a structure is located” is considered an “available public sewer system” regardless of how many feet the system was from the structure it services or could potentially service.  This ordinance differed from the previously governing state statute (MCL 333.12751 (c)), which “available public sanitary sewer system as  “a public sanitary sewer system located in a right of way, easement, highway, street, or public way which crosses, adjoins, or abuts upon the property and passing not more than 200 feet at the nearest point from a structure in which sanitary sewage originates.”

At the Tax Tribunal trial, the Newells argued that the assessment was unjust because they received no benefit from the sewer system (they did not connect to it, nor did they need to connect to it).  The tribunal upheld the assessment and the Newells paid it.   Since they did not connect to the system, however, they refused to pay the operation and maintenance fees that were due each quarter thereafter.  When they were notified of their delinquency on the operation and maintenance fees, the Newells filed a claim in circuit court arguing that the ordinance was preempted by the previously governing state statute, that the fee violated the Headlee Amendment, and that the assessment violated the right to equal protection under the Michigan Constitution.  The court ruled in favor of the Village, finding that the preemption claim could have been resolved in the tax tribunal hearing so the court was prohibited from ruling on it.  Additionally it found that, although a municipality is not allowed to enact ordinances that conflict with state statutes, it is free to make ordinances that expand on them.

On appeal, the Newells again made a preemption claim arguing that the state statute preempted the Village’s ordinance.  They were of the opinion that they were not required to connect to the public sewer system (per the state statute MCL 333.12751 (c)) because their structure was located more than 200 feet from it.  The Court disagreed, finding that the Village’s ordinance was not in conflict with the state statute but merely expanded on it, which is allowable.  Thus, the Village’s ordinance was not preempted by the state statue.  The Court further noted that, in matters of public health such as a sewer system, municipalities act as an agent of the state in the regulation of such systems.

Citing People v. Llewellyn, the Newells additionally argued that this area of regulation was one in which state law has exclusive jurisdiction.  This argument rested on the fact that MCL 333.12751 was not included in the list of sections that the statute specified as being expandable by municipalities.  The Court rejected this argument, finding that the statute clearly anticipated changes by local governments.  It further found that the fact that the section was not listed did not equal a declaration that the state’s statutes were the exclusive governing power in that area.

The Newells also argued that the fee violated the Headlee Act, which prohibits municipalities from enacting a tax that was not authorized by state law, and from increasing an already authorized tax without a majority vote.  The Court found that since the fee is “serving a regulatory and not a revenue-raising purpose,” it is not considered a tax.  Consequently, the Headlee Act does not apply to it.  The Court affirmed the lower court’s decision in favor of the Village.

Fees, Michigan courts, Preemption, Public sewer and/or water services, special assessments, Taxes , , ,
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Wisconsin wind energy facility law preempts county ordinance

Gary Taylor

by Allison Arends

Ecker Brothers v. Calumet County
(Wisconsin Court of Appeals, July 15th, 2009)

Wisconsin state statute concerning wind energy systems preempts county permitting scheme. 

The Ecker Brothers, who had one working wind turbine on their farm already, wanted to build more wind turbines on their farm property in order to generate energy to sell back to the power company. In order to do so, the brothers needed to obtain a grant. The grant required the Calumet County and the Town of Stockbridge to provide an acknowledgement letter stating that the Ecker Brothers did not need a permit to build wind turbines.  The Town sent a letter but the County did not.  The County instead passed a wind turbine ordinance which categorized wind turbines as either small or large systems, and established across the board regulations for each.  Under this ordinance the Ecker Brothers were required to apply for a permit illustrating that their wind turbine projects met the ordinance’s restrictions.  The Ecker Brothers filed a declatory judgment action in which they stated that the county exceeded its authority under Wis. Stat. 66.0401.  The circuit court agreed with the county, and the Ecker Brothers appealed.

The issue before the Wisconsin Court of Appeals was the extent to which political subdivisions in Wisconsin have the authority to regulate wind energy systems.  Wis. Stat. 66.0401 specifically states that no city, county, town or village may place any restriction on a solar or wind energy system unless the restriction satisfies one of the three following conditions: (1) it serves to preserve or protect the public health or safety; (2) it does not significantly increase the cost of the system or significantly decrease its efficiency; or (3) it allows for an alternative system of comparable cost and efficiency.  The statute also specifically states that political subdivisions can grant permission to trim vegetation causing interference with wind or solar systems, as long as the vegetation was planted after the placement of the energy collection unit.  Calumet County’s ordinance set minimum setback, height and noise requirements for any wind system locating in Calumet County. 

Noting that the intent of the state statute was to favor wind energy systems, the Court of Appeals considered Calumet County’s across the board regulation of all wind energy systems to be a “one size fits all” method of control that was preempted by state statute.  Although the county argued that its ordinance did not violate the state statute because all of its restrictions conform with the three exceptions stated within Wis. Stat. 66.0401, the Court instead viewed the county’s determination that in all cases setback, height and noise limitations were necessary to preserve public health, safety and welfare to be an impermissible intrusion into legislative policy-making.  Wis. Stat. 66.0401 instead contemplates that cities, counties, towns and villages “must look at each wind system on its own merits and decide, in each specific case, whether the wind system conflicts with public health or safety.”  The Court took the view that the state statute thus contemplated local regulation in the form of a conditional use permit procedure that restricts systems as needed on a case-by-case basis, rather than a local ordinance creating a permit system with across-the-board regulations based on legislative policy-making. 

The Court of Appeals reversed and remanded the case to the circuit court for reconsideration, in light of the fact that the county exceeded its authority under Wis. Stat. 66.0401 when it adopted its wind energy ordinance.

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