This post was authored by Matthew Loescher, Esq.
Plaintiffs who sought permits to use their homes as short-term rental properties brought action against the City of New Buffalo, asserting that city moratorium and ordinance suspending the issuance of short-term rental permits violated the Michigan Zoning Enabling Act (MZEA), Michigan’s Open Meetings Act (OMA), and numerous provisions of the Michigan constitution and United States Constitution. Plaintiffs moved for partial summary judgment on their substantive due process and equal protection claims, and the City moved for summary judgment on all counts.
The City first contended that the Court should grant summary judgment in their favor on all claims that challenged the validity of the Moratorium, which had expired. Count I asserted that the Moratorium was invalid under the doctrine of legislative equivalency and Count II asserted that the Moratorium was invalid under the MZEA. Plaintiffs failed to cite any precedent for damages relief under the doctrine of legislative equivalency or for a violation of the MZEA, but they also sought damages under their other claims, which arose under the U.S. and Michigan constitutions. Where damages were available, the court found Plaintiffs’ claims were not moot.
The City first sought summary judgment on Plaintiffs’ claim that the Moratorium violated the Commerce Clause of the U.S. Constitution. Plaintiffs argued that the Moratorium imposed an excessive burden on interstate commerce that outweighed any local benefits, by preventing homeowners from earning lost rental income. However, Plaintiffs failed to provide any real evidence of how much the Moratorium burdened interstate commerce, let alone an undue burden in relation to local benefits. Accordingly, the Court dismissed this claim.
The City next moved for summary judgment on Count IV, which asserted that the Moratorium violated the requirements of the OMA. The court noted that damages were not available under this claim because Plaintiffs had not sued a public official. Here, Plaintiffs argued that their rights were impaired because the City failed to post information about how the public could participate electronically, leaving them unable to participate. The record reflected that the City’s notice provided a Zoom link for participation, and that members of the public could submit their comments in writing by email to the City Clerk. Plaintiffs failed to explain why the information provided by the City was inadequate and prevented them from participating. Accordingly, the City was granted summary judgment for this claim.
Both sides next sought summary judgment on Count V, which asserted violations of substantive due process under federal and state law. The record indicated that the City passed the Moratorium due to various concerns about the impact of short-term rentals on the quality of life in the City, including “declining school enrollment, declining long-term housing stock, declining long-term resident population, and an increase in vacant homes during winter months.” The City initially amended its regulatory ordinance through Ordinance 248. Later, the City addressed its concerns about short-term rentals by limiting the total number of them through Ordinance 253. As such, both the Moratorium and Ordinance 253 were rationally related to the City’s legitimate concerns. While Plaintiffs contended that Ordinance 253 was “oppressive” because it operated retroactively to restrict Plaintiffs’ property rights, in violation of state law, the court found a violation of state law does not necessarily give rise to a constitutional claim, and the violation alleged here did not shock the conscience.
The City also summary judgment on Plaintiffs’ procedural due process claim. Plaintiffs claimed that the City deprived them of due process by failing to provide them with adequate notice of Ordinance 237 and the Moratorium. Specifically, they alleged that the City did not provide individual notice by mail of Ordinance 237. Plaintiffs further argued that the City provided no notice to the public before it adopted the Moratorium. The court noted that the Moratorium was not a zoning amendment since it did not rezone or reclassify any property; instead, it paused the grant of permits under a regulatory scheme for short-term rentals. Furthermore, the Moratorium did not single out or target a particular person, or even a relatively small number of persons, on individual grounds – as everyone in the City who was interested in using their property for short-term rentals and who did not already have a permit was affected by the Moratorium. Accordingly, Plaintiffs failed to demonstrate that they were entitled to notice or an opportunity to be heard before the City Council passed the Moratorium. Accordingly, Plaintiffs’ procedural due process claim was found to be meritless.
As a final matter, both sides sought summary judgment on Plaintiffs’ equal protection claim. Plaintiffs claimed that the City has treated them differently from homeowners who rented their properties for the long term (more than 30 days at a time). Plaintiffs’ further alleged that the City treated them differently from homeowners – such as the Nofzogers – who were granted permits while the Moratorium was still in effect. Plaintiffs contended that there was no rational basis for denying the Nofzigers’ permit application, and the court could not discern one. While the City speculated that the denial may have been a mistake, the court found that a jury could infer otherwise based on the City’s repeated denial of the Nofzigers’ application. Plaintiffs were therefore found to have provided sufficient evidence to undercut the City’s explanation, and the City offered no evidence in response. Accordingly, there was no genuine dispute that the City denied the Nofzigers’ right to equal protection because it denied their application, intentionally treating them differently from similarly situated applicants without a rational basis for doing so. As such, the court granted summary judgment on this equal protection claim in favor of 218 S Bronson LLC.
Moskavic v City of New Buffalo, 2022 WL 16548948 (WD MI 10/31/2022)
LAW OF THE LAND 
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