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

by Victoria Heldt

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

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

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

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

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

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

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

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

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

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