Posted by: Patricia Salkin | March 23, 2016

Fed. Dist. Court in MI Grants City’s Motion to Dismiss in Takings and Equal Protection Case

Sterling Associates received a Special Approval Land Use (“SALU”) from the City of Sterling Heights on March 29, 1989 for a commercial property located at 5673 Fifteen Mile Road to develop and operate a business–a self-service gasoline station and automobile service center. Reem purchased the property in 2005. Reem and its tenants asserted they have become subject to harassment from the City for alleged code and zoning violations, but that the City has not issued any ticket or fine to Reem or its tenants. On December 11, 2014, the City filed a lawsuit in the Macomb County Circuit Court against Reem, alleging that all the entities at the property should be permanently enjoined from continuing to conduct their businesses. On March 24, 2015, the City moved for summary disposition in the state court action seeking to revoke the SALU entirely from the property. While the state court action was pending, Plaintiffs filed this suit.

As to the takings claim, the City has taken a definite position by filing the action in state court to revoke the SALU. However, Plaintiffs failed to show that the state has denied just compensation, or that Plaintiffs pursued their remedies in state court. Moreover, at the time of this case it was unclear whether the state court had issued its decision on the SALU revocation, and, if it had, whether Plaintiffs appealed through the state courts. Because the Supreme Court and the Sixth Circuit held that any other constitutional claims ancillary to the takings claim must also be dismissed if based on the same facts as the taking claim which require exhaustion of state remedies, the Plaintiffs’ due process claims were also dismissed. Plaintiffs’ inverse condemnation claim was also dismissed for this reason.

The court also dismissed Plaintiffs’ Equal Protection claim, as they had not identified the individual businesses similarly situated to them that were treated differently. Finally, as to the tortuous interference claim, the Court found that the City was entitled to governmental immunity since its action before the state court to revoke the SALU was a governmental function. Accordingly, the Plaintiffs’ claims were dismissed

Reem Properties, LLC v. City of Sterling Heights, 2016 WL 805753 (EDMI 2/29/2016)


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