This post was authored by Amy Lavine, Esq.

Two recent cases from the New York Appellate Division, Second Department addressed the service of process requirements for building code and zoning violations. The property owner in these cases had been issued default violations after he failed to appear for hearings before the New York City Environmental Control Board, but he claimed that service of the violations was improper because the building inspector only made one attempt at personal service prior to using “affix and mail” service. Although the lower court ruled in the property owner’s favor, the Second Department reversed on appeal and declined to vacate the violations. As the court explained, while the appeal in this case was pending, the Court of Appeals held in Matter of Mestecky v City of New York that the New York City Charter only required “a single reasonable attempt by a DOB inspector to personally deliver the [notice of violation] at the premises.” Accordingly, the property owner’s claim that the building inspector was required to make multiple attempts at personal service should have been rejected.

Matter of Tropp v City of N.Y. Envtl. Control Bd., 2020 NY Slip Op 04951 (2d Dept 9/16/20).

In a separate decision the court also reversed the dismissal of another violation issued to the property owner. He had argued that “someone was home on the day of service and [he] would have heard the doorbell ring or a knock on the door” if personal service had been attempted. The administrative law judge did not credit this testimony and instead found that the building inspector made a reasonable attempt to deliver the notice of violation in person, and the lower court had no basis to ignore or disturb these credibility findings. The court also rejected the property owner’s claims that he was denied his right to confront and cross-examine the building inspector because the record showed that he agreed to proceed with the hearing without the building inspector present and he failed to make any request to adjourn the hearing until the building inspector could attend.

Matter of Tropp v City of N.Y. Envtl. Control Bd., 2020 NY Slip Op 04952 (2d Dept 9/16/20).

This post was authored by Amy Lavine, Esq.

The NY Appellate Division, Second Department recently upheld the denial of site plan approval for the addition of a canopy to a gas station located in Montauk. The court first noted that the standard of review was not substantial evidence, because “the Planning Board’s determination was made after informational public hearings, as opposed to a quasi-judicial evidentiary hearing….” Rather, the court’s review was limited to determining whether the planning board’s decision was illegal, arbitrary and capricious, or an abuse of discretion. The court next explained that the Town Law provided authority for the planning board to review site plans and impose reasonable conditions and restrictions. In this case, the planning board exercised this authority appropriately. Considering the size and scale of the proposed gas station canopy, the court could not find that there was no rational basis for determining that the canopy would be inconsistent with the neighborhood and the visual character of the area.

Matter of Empire Import-Export of USA, Inc. v Town of E. Hampton Planning Bd., 2020 NY Slip Op 04941 (2d Dept 9/16/20)

This post was authored by Matthew Loescher, Esq.

Plaintiff Exclusive Brands LLC sought a special use permit to operate a medical marijuana facility in Garden City, Michigan. Plaintiff Exclusive Brands LLC brought this action for injunctive, declaratory, compensatory, and punitive relief pursuant to 42 U.S.C. § 1983 for alleged violations that Defendants Garden City and a number of its municipal entities and employees unlawfully denied it a special use permit to operate a medical marijuana facility in Garden City, Michigan. As it pertains to this case, the State of Michigan’s Medical Marihuana Facilities Licensing Act (“MMFLA”) enables a municipality to decide whether to allow marijuana facilities within the municipality by adopting an ordinance.

Plaintiff first claimed that it suffered from Defendants’ “disparate treatment of plaintiff from similarly situated applicants” because Defendants had not informed Plaintiff of the six-month moratorium prior to the implementation. Despite this, Plaintiff failed to provide any facts explaining how other special use permit applicants were similarly situated to Plaintiff, or explaining who these similarly situated applicants were. Accordingly, the court dismissed Plaintiff’s equal protection claim.

The court next noted that pursuant to Garden City’s ordinance § 154.416, a decision to approve or deny a special use permit application was subject to complete discretion of the Planning Commission and the City Council. Here, the City Council denied Plaintiff’s special use permit application pursuant to this complete discretionary authority. As such, Plaintiff did not have a constitutionally protected property interest with a special use permit for a medical marijuana facility. Accordingly, the court dismissed Plaintiff’s substantive due process claim against Defendants Garden City, City Council, and Sloan.

Lastly, Plaintiff contended that Defendants violated procedural due process under the Fifth Amendment of the U.S. Constitution and Article 1, § 17 of the Michigan Constitution “by denying Plaintiff a public hearing and an opportunity to be heard before defendant Garden City’s Planning Commission and other governmental bodies.” However, the public record of the City Council’s meeting minutes indicated that the City Council heard Plaintiff’s appeal on December 3, 2018. As Plaintiff failed to establish the existence of a protected property interest with regards to the special use permit for a medical marijuana facility, the court also found that Plaintiff failed to plausibly allege a viable procedural due process claim.

Exclusive Brands, LLC v City of Garden City, Michigan, 2020 WL 5367331 (ED MI 9/8/2020)

This post was authored by Matthew Loescher, Esq.

International Outdoor, Inc., an outdoor advertising company, desired to erect billboards in the City of Troy, Michigan. Following the City of Troy’s denial of International Outdoor’s application for a permit, and then for a variance from the limitations imposed by the City’s sign ordinance, International Outdoor brought suit challenging the constitutionality of the City’s ordinance under 42 U.S.C. § 1983, and alleged that the sign ordinance violated International Outdoor’s First Amendment rights.

The record reflected that the original City of Troy Sign Ordinance imposed a prior restraint because the right to display a sign, which did not come within an exception as a flag or as a “temporary sign,” depended on obtaining either a permit from the Troy Zoning Administrator or a variance from the Troy Building Code Board of Appeals. Here, the standards for granting a variance contained multiple vague and undefined criteria, such as “public interest,” “general purpose and intent of this Chapter,” “adversely affecting,” “hardship,” and “practical difficulty.” Moreover, even meeting these criteria did not guarantee grant of a variance, as the Board retained discretion to deny it. Therefore, the variance scheme gave unbridled discretion to the Troy Building Code Board of Appeals and did not meet the “narrow, objective, and definite standards” required for constitutionality.

International Outdoor, Inc. v City of Troy, Michgan, 2020 WL 5269822 (6th Cir CA 9/4/2020)

This post was authored by Matthew Loescher, Esq.

Respondents Brenda M. Bunce, Terry A. Nunez, Dennis R. Ormond, and Dawn Ormond Constantine, owners of an approximately 17-acre parcel of land, entered into an agreement to sell a two-acre section of that parcel to respondent The Broadway Group, LLC. The sale was contingent on the issuance of a use variance allowing Broadway to construct a Dollar General store there. After an environmental review and a public hearing, respondent Town of Poland Zoning Board of Appeals (“ZBA”) granted the use variance, without making any findings of fact regarding whether the application submitted by Broadway and the Ormond respondents established the requisite unnecessary hardship. Petitioners, some of whom own homes near the two-acre parcel and opposed the granting of the use variance, filed a CPLR article 78 petition seeking to annul the ZBA’s determination. The Supreme Court dismissed the petition. On appeal, the case was remitted to the ZBA, which determined that respondents demonstrated “that applicable zoning regulations and restrictions have caused unnecessary hardship.”

In support of their claim, Respondents submitted evidence of the cost of removing a decrepit 19th century house from the two-acre parcel, including the costs of asbestos remediation and air monitoring, which would be required to sell the property as vacant land. Despite this, there was no evidence in the record establishing whether respondents could realize a reasonable return on the parcel if it were used for any other conforming use. Additionally, respondents’ expert did not discuss any possible use of the property other than as vacant land. As respondents’ expert failed to discuss the possible return with respect to all uses permitted within the zoning district, respondents failed to meet their burden of demonstrating that they could not realize a reasonable return on the property without the requested use variance. As the determination was not supported by substantial evidence, and the ZBA’s determination was annulled.

Dean v Town of Poland Zoning Board of Appeals, 2020 WL 4249790 (NYAD 4 Dept. 7/24/2020)

This post was authored by Matthew Loescher, Esq.

Plaintiff Ronald S. Prisley filed this action against the Town of Deep River Planning and Zoning Commission pursuant to 42 U.S.C. §1983 alleging an equal protection “class of one” claim based upon the Commission’s denial of Prisley’s 2014 re-subdivision application for a property located in Deep River, Connecticut. In this case. The court reviewed the Commission’s motion for summary judgment.

The Commission sought summary judgment on Prisley’s equal protection claim on the grounds that there was insufficient evidence for a jury to identify the existence of a similarly situated comparator so as to establish differential treatment. Specifically, the Commission claimed, the two re-subdivision applications were not similarly situated due to the Plaintiff’s requested waivers – which served as acknowledgements “that he was unable to meet” each of the three regulations at issue – that had been met by its alleged comparator, 20 Hemlock Drive.

Additionally, had the application for 20 Hemlock Drive included a non-compliant building rectangle, Prisley failed to offer any evidence to overcome the Commission’s contention that the two properties were dissimilar by virtue of the fact that Prisley’s application would have yielded two rear lots; in doing so, Prisley would be violating two subdivision regulations, while the application at 20 Hemlock Drive yielded two front lots. Accordingly, the Defendant’s motion for summary judgment was granted.

Prisley v Town of Deep River Planning and Zoning Commission, 2020 WL 4505511 (D. Ct. 8/5/2020)

This post was authored by Matthew Loescher, Esq.

This appeal arose from the denial of Ernest Communities’ application for a land development permit to build town homes on its property in Rincon, Georgia. Ernest sued the city of Rincon, the city council, the mayor, the council members in their individual and official capacities, and the city planner, stating claims for declaratory judgment that the applicable city ordinance was void; permanent injunction; mandamus relief; and damages, pursuant to 42 USC § 1983. The trial court denied summary judgment to the City, granted partial summary judgment to Ernest, declared the ordinance void, and permanently enjoined the regulation of Ernest’s property under the ordinance. The City appealed that order in this case.

On appeal, the City argued that the trial court erred by denying its motion for summary judgment because Ernest’s claims for declaratory judgment and injunction were barred by the doctrine of sovereign immunity. OCGA § 9-4-7 (b) set forth: “In any proceeding involving the validity of a municipal ordinance or franchise, the municipality shall be made a party and shall be entitled to be heard as a party.” Thus, the court found that a municipality would be subject to a declaratory judgment action where, as in this case, the validity of its ordinance was challenged. While the court held that the claim for declaratory judgment was not barred by sovereign immunity, pursuant to OCGA § 9-4-7 (b), it found there was no waiver of sovereign immunity as to the claim for injunctive relief.

The City’s next claimed that the trial court erred by granting summary judgment to Ernest and declaring the city’s growth management code (“GMC”) void because it was not properly adopted. The court noted that there was no applicable statute requiring the City to place an ordinance on its minutes or otherwise incorporate it by reference therein as a condition precedent to adopting it. As such, the trial court was required to review the City’s charter at the outset. Here, however, the charter was not entered in the record, nor did the trial court indicate that it took judicial notice of the charter in making its determination that the adoption was invalid. Without reviewing the charter, the trial court was unable to determine what process the council was required to follow in order to properly adopt the GMC. Accordingly, the court reversed the trial court’s holding that the GMC was improperly adopted and therefore void on that ground.

Next, the City contended the trial court’s declaration that the GMC was void on “right for any reason” grounds should be reversed. The court found that because the trial court did not reach the issue of whether the adoption of the GMC violated the hearing and notice requirements set forth in the ZPL, this issue was beyond the proper scope of its appellate review. The court therefore vacated the trial court’s order, and remanded the case for consideration of this issue.

Lastly, the court noted that the decision-making process of the council involved an evaluation of the relevant facts from the evidence presented and the application of standards as set forth in the GMC. Additionally, the denial was effective immediately, and was “final, binding, and conclusive” of Ernest’s rights to develop the town homes on its property. Accordingly, the denial of the application was deemed a quasi-judicial act. As such, Ernest was required to challenge the denial of its application by writ of certiorari, pursuant to OCGA § 5-4-1. The trial court’s denial of summary judgment to the City as to Ernest’s mandamus claims, was therefore reversed.

City of Rincon v Ernest Communities, LLC, 846 S.E. 2d 250 (GA App. 6/30/2020)

This post was authored by Matthew Loescher, Esq.

Plaintiff-Appellant Amitkumar Shah was the owner and director of Akshar Global Investments Corp. (“AGI”), which owned and operated the 108 Motel Inn in Los Angeles, California. The Second Amended Complaint (“SAC”) included allegations that in 2018, the City of Los Angeles formally revoked the conditional use permit (“CUP”) that allowed the Motel to operate. In this case, appellants claimed that that the actions taken in connection with the revocation of the CUP were actionable under the Civil Rights Act, 42 U.S.C. § 1983, and the Fair Housing Act, 42 U.S.C. § 3604. The district court dismissed the SAC with prejudice.

On appeal, the court first found that the allegations in the SAC did not plausibly suggest Appellants’ Fifth Amendment right to be free from unconstitutional takings was violated. Additionally, to the extent the City’s decision to revoke the CUP was based on concerns about nuisance caused by Appellants’ Motel, the Takings Clause was not implicated because a locality may act in response to criminal activity – which it did so here.

The SAC also failed to present any facts supporting the inference that Appellants’ rights under the Equal Protection Clause of the Fourteenth Amendment were violated. The equal protection challenge was presumably a “class of one” claim since Appellants claimed that similarly situated properties had not been subjected to the actions taken by the City. The court determined that the SAC’s allegations of differential treatment were conclusory, and the SAC failed to plead facts showing that “there is no rational basis for any difference in treatment,.” As to Appellants’ contention that they did not receive sufficient actual notice of the subsequent City Council hearings on their appeal of the revocation, the SAC did not adequately allege that any such deficiency was caused by an official policy, custom, or practice.

For the aforementioned reasons, the factual allegations in the SAC related to claim were not sufficient to give rise to a Fourth Amendment claim. On remand, Appellants were permitted to amend their complaint to supplement the allegations related to the City’s alleged search of the Motel’s registration records.

Akshar Global Investment Corp v City of Los Angeles, 817 Fed. Appx. 301 (9th Cir. CA 5/29/2020)

This post was authored by Matthew Loescher, Esq.

In this case, Reynier Village Neighborhood Association appealled the district court’s order denying its motion for intervention as of right and for permissive intervention in in action seeking review of area planning commission’s denial of application for a conditional use permit to build a wireless communication tower. The United States District Court for the Central District of California, denied motion for intervention as of right and for permissive intervention, and Reynier appealed.

The court found the fact that the City attempted to resolve Verizon’s challenge to an earlier decision by the South Los Angeles Area Planning Commission did not negate its present interest in defending the 2018 Decision. This finding was supported by the City’s opposition to Verizon’s motion for partial summary judgment and its filing of a cross-motion for summary judgment. Thus, the City was presumed to adequately represent Reynier’s interests. Reynier’s desire to defend the 2018 Decision on grounds other than the ones the City relied on at the summary-judgment stage was found to be insufficient to overcome the presumption. Accordingly, the district court’s denial of Reynier’s request for permissive intervention was affirmed.

Los Angeles SMSA Limited Partnership v City of Los Angeles, 817 F. Appx. 350 (9th Cir CA 6/4/2020)

This post was authored by Matthew Loescher, Esq.

This case arose from three FCC orders, issued in 2018, that dealt with myriad issues related to the application of a twentieth century statute to twenty-first century technology. The two orders were known as the Small Cell Order and the Moratoria Order. The third FCC order, known as the “One-Touch Make-Ready Order,” was intended to prevent owners and operators of utility poles from discriminatorily denying or delaying 5G and broadband service providers access to the poles. In this case, several utilities objected to various aspects of the One-Touch Make-Ready Order.

At the outset, the court noted that the record supported the FCC’s factual conclusion that high fees in one jurisdiction can prevent deployment in other jurisdictions. In addition to relying on firsthand reports of service providers, the FCC used an academic study, known as the Corning Study. In that study, a group of economists estimated that limiting 5G fees could result in carriers reinvesting an additional $2.4 billion in areas “previously not economically viable.” The court determined that the FCC’s fee limitation did not violate Section 253(c) of the Act, which ensured that cities receive “fair and reasonable” compensation for use of their rights-of-way. While the FCC was not setting rates, it was determining a level at which fees would be so clearly reasonable that justification was not necessary, and litigation could be avoided. As such, the presumptive levels of fees were not arbitrary and capricious.

The court next found the requirement that aesthetic regulations be “no more burdensome” than those imposed on other technologies was not consistent with the more lenient statutory standard that regulations not “unreasonably discriminate.” Specifically, the requirement that local aesthetic regulations be “objective” was neither adequately defined nor explained. Thus, on its face, it preempts too broadly. The court therefore held those provisions of Paragraph 86 of the Small Cell Order must be vacated.

Wireless Service Providers next alleged that the failure to adopt a deemed granted remedy was arbitrary and capricious as the FCC adopted the remedy in a different statutory context, the Spectrum Act, and never explained why it did not do so in this case. The Telecommunications Act requires cities make a decision on applications within a reasonable period of time; conversely, the Spectrum Act provides that the local government must grant all qualifying applications. As there was no similar language in the Telecommunications Act, the FCC’s conclusion that a different remedy was appropriate here was not arbitrary and capricious.

As to the One-Touch Make-Ready Order, Petitioners contended that by prohibiting the utilities from charging overlashers for the cost of conducting pre-overlashing studies, the overlashing rule contradicted Section 224(d)(1). The court found that section ensured cost recovery, but only for attachments by cable television providers, and therefore did not apply. The overlashing rule was thus determined to have been a reasonable attempt by the FCC to prevent unnecessary costs for attachers. The Petitioners next challenged the preexisting violation rule, which prohibited utilities from denying access to a new attacher solely because of a preexisting safety violation that the attacher did not cause. Petitioners further argued that this was contrary to Section 224(f)(2), which allowed utilities to deny access for “reasons of safety.” Because the preexisting violation rule reasonably defines the term “reasons of safety,” the FCC’s interpretation was found reasonable.

Lastly, Petitioners brought a procedural challenge to the rule, claiming that the FCC did not comply with the APA’s notice requirement, because it had not issued a proposed rule before announcing the final self-help rule. The court held that an agency need not provide a new Notice of Proposed Rulemaking (“NPRM”) as long as the final published rule was “a logical outgrowth of the notice and comments received”. Petitioners also alleged that the rate reform rule may result in their incomplete recovery of costs, since if a utility successfully rebuts the presumption that an ILEC should have the same rates as CLECs, the rule imposes a maximum rate ILECs and utilities may negotiate. The court found this maximum negotiable rate was not arbitrary or capricious because the FCC set the rate at a value that was higher than both CLEC and cable operator rates, and the FCC had previously determined those rates were just, reasonable, and allowed full cost recovery. Accordingly, the court held the rate reform, overlashing, preexisting violations, and self-help rules, were an appropriate exercise of the FCC’s regulatory authority under the Telecommunications Act.

City of Portland v Unites States of America, 969 F.3d 1020 (9th Cir CA 8/12/2020)

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