6th Circuit Court of Appeals Concluded that the District Court Legitimately Approved the Settlement Between the Town and Property Owners Regarding a Rezoning

This post was authored by Olena Botstheyn, Esq.

In 2001, Benalcazars purchased a 43-acre property in the Town of Genoa, zoned for rural use. In 2017, they applied to rezone their property to a Planned Residential District with an idea to construct several houses on the plot. The Town first approved the application in 2018, but several Town residents opposed the rezoning and passed a referendum against it. Over 75% of Town residents supported the referendum, as a result of which the application to rezone the property was reversed. Benalcazars then commenced a federal action, asserting Due Process and Equal Protection rights violation. They claimed that in the past the Town approved over a hundred rezoning applications, including the ones for higher density developments, than Benalcazars’. The Town and Benalcazars then agreed on a settlement, pursuant to which the Town agreed to change the zoning, and Benalcazars agreed to reduce the proposed development from 64 homes to 56 homes and to provide more open space. Ohio law allows a township to settle through a consent decree. Several of the Town residents petitioned to intervene in the case, as they remained unhappy with the proposed settlement. Claiming that “all property owners seeking zoning amendments face the possibility of a referendum vote,” they moved to dismiss for failure to state a claim. The district court dismissed the due process and declaratory judgment claims, but stated that Benalcazars had a plausible equal protection claim and approved the settlement. Intervenors appealed.

On appeal, the key issue before the court was whether the federal questions raised by the complaint are not frivolous and thus create a legitimate federal court jurisdiction, which would then allow the court to approve the consent decree. The court concluded that Benalcazars’ complaint passed this test, as it alleged that the Town approved “nearly one hundred rezonings from Rural Residential to Planned Residential District” as well as included a map depicting a large part of the Town to be zoned as a Planned Residential District and identified three similar properties with greater development densities that received an approval from the Town. The court went on to explain that the fact that all property owners seeking zoning amendments face the possibility of a referendum is irrelevant here, as all statutes in Ohio are subject to referendum and whether through a referendum or a vote by trustees, the Town made a decision to reverse a rezoning application, potentially subjecting the Town to federal claims. Since Benalcazars’ complaint was not frivolous and the Town was authorized to settle by a consent decree, the court affirmed the district court’s decision.

Benalcazar v Genoa Township, OH, 2021 WL 2374260 (6th Cir. CA 6/10/2021)