Tag: procedural due process

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

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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.

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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.

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

Gary Taylor

by Victoria Heldt

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

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

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

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

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

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

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

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

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

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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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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.

Due Process, Federal courts, Rezoning, Takings , , ,
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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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Yes, we’re back, and with a case on …. spot zoning

Gary Taylor

by Gary Taylor

Ely v. City of Ames
(Iowa Court of Appeals, June 30, 2010)

The Elys own a tire and automotive service center on Lincoln Way.  Next door is the Martin House.  From approximately 1920 to the late forties the Martins provided room and board to African-American students attending Iowa State University when the students were denied housing elsewhere.  George Washington Carver, distinguished botanist and the first African American to graduate from Iowa State University, often visited the Martin’s home when he returned to Ames.  The house is also an example of the Craftsman architectural style, and is one of the few remaining houses on Lincoln Way, which has become a major commercial arterial.  The property is zoned “Highway-Oriented Commercial” but exists as a legal nonconforming residential use. 

The Archie and Nancy Martin Foundation submitted an application for Ames to designate the home as an historic landmark.  Over objections by the Elys, the Ames city council approved the designation and rezoned the Martin property as a “Historic Preservation Overlay District.”  The Elys sued, raising issues of (1) procedural due process, (2) equal protection, and (3) spot zoning.  The district court found in favor of the city on all three issues, and the Elys appealed.

Procedural due process.  On the procedural due process claim the Iowa Court of Appeals started by stating the well-settled legal principle that “a person is only entitled to procedural due process when a state action threatens to deprive a person of a protected property or liberty interest.”  The Elys argued that they have a protected interest in maintaining the value of their land, but the Court of Appeals disagreed.  “An abstract desire or expectation of a benefit is not sufficient,” but rather “a property interest is only protected if there is a legitimate claim of entitlement.”  The Court further ventured to state that even if it could somehow be shown that the Elys had protected property interests that were implicated by the historic landmark zoning of the neighboring property, the public hearing at which the rezoning was discussed and decided by the city council gave the Elys sufficient opportunity to be heard to satisfy procedural due process.

Equal protection.  The Elys next claimed that because the historic landmark designation fails to require the Martins to adequately maintain the property, it results in differing treatment between historic landmarks and surrounding properties and thus violates the Ely’s right to equal protection of the law.  The Court dismissed this argument by first recognizing that differing treatment under the law is permissible if parties are not similarly situated.  The Court concluded that promoting preservation of historical and cultural landmarks is a legitimate governmental interest sufficient to support differing treatment of properties.  Further, the Court observed that the Martin property was, in fact, held to a higher standard of maintenance than the Ely’s because the Martin property was subject to Ames’s rental code. 

Spot zoning.  The Court dismissed the Ely’s final issue of spot zoning by observing that illegal spot zoning results when “like tracts or similar lots are subject to reclassification” without reasonable grounds for treating the subject property differently.  “If a [city council or county board] could determine the subject property is distinguishable from the surrounding area [the court] will uphold its decision.”  The facts that the property had historical and cultural significance to Ames, and that it was a legal nonconforming residence in a residential structure were sufficient grounds for a zoning classification different from its surrounding properties.

Due Process, Equal Protection claims, Iowa Court of Appeals, Spot Zoning , , ,
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