This edited post is reposted with permission from the Rocky Mountain Sign Law Blog.  The original post was authored by Andrew L.W. Peters.

SLAPP suits prototypically arise when more powerful organizations bring doubtful claims against citizens who’ve criticized them, knowing the costs of litigation alone will silence the critics.  Most, but not all, states have Anti-SLAPP laws, and they all layer protections on top of the First Amendment’s right to petition.  Generally, Anti-SLAPP statutes supply defendants with a special motion to dismiss that operates in two steps:  first, the defendant must show that they engaged in speech, debate, or petitioning activity on an issue of public interest, and second, if they succeed, then the plaintiff must prove that its lawsuit enjoys a reasonable shot at success.  If it can’t, the suit is dismissed, and the defendants receive an award of attorneys’ fees and costs.  It’s strong medicine for would-be plaintiffs.

In a recent Nevada Supreme Court case, Olympia, a real estate developer, sued Michael Kosor, Jr., a resident in one of its developments, for defamation after Mr. Kosor criticized Olympia in public meetings and online.  His complaints concerned Olympia’s control of the development’s HOA, which he likened to “foreign dictatorship.”

After Olympia filed sued, Mr. Kosor sought dismissal under Nevada’s Anti-SLAPP statute, and the trial court granted it.  The question before the Nevada Supreme Court was whether the Anti‑SLAPP statute applied at all.  The Court concluded it did, providing guidance that could easily be applied in other states.

First, the court concluded Mr. Kosor’s statements were “made in direct connection with an issue of public interest.”  Although the case concerned a dispute between a private citizen and a private company, the court reasoned that issues of HOA governance, as well as alleged malfeasance and mismanagement, could affect Mr. Kosor’s 3,000-member community and were therefore sufficiently public.

Second, and more interestingly, the court concluded that Mr. Kosor’s statements on Nextdoor.com satisfied statute’s requirement that the protected statements be made in a “place open to the public or in a public forum.”  (Nextdoor is neighborhood-based social media platform that launched in 2011 with the prediction, “When neighbors start talking, good things happen.”)  Private websites don’t always, or even often, qualify as a public forum, but the court viewed Nextdoor as a place for the public to exchange ideas and solicit discussion.  Thus, Mr. Kosor’s statements in that forum received the same protections under the statute as they would have if he’d made them at a city council meeting.

The court ultimately remanded the case to the district court to make findings as to whether Mr. Kosor had made his statement in good faith (another statutory requirement) but assumed the statute would otherwise apply.

The case provides a reminder to real estate developers and managers:  retaliating against nettlesome community members can come at a high price.

Kosor v. Olympia Companies, LLC, 478 P.3d 390 (Nev. 2020)

This post was authored by Olena Botshtyen, Esq.

1788 Holdings, LLC (“1788 Holdings”) was planning to construct a convenience store and automobile filling station at a property zoned as Corridor Development (“CD”) in the City of Gaithersburg, Maryland. The Master Plan describes the area as commercial-office-residential and provides that it may contain multi-family units, light commercial uses and office uses. 1788 Holdings submitted a development plan for the City Council’s review, which was opposed by nearby property owners (“Opponents”). On August 5, 2019, the City Council and the Planning Commission held a joint public hearing, where 1788 Holdings presented the plan and provided information on its efforts to reduce light and noise spillage onto neighboring lots and to promote harmony with the residential character of the development. The Planning Commission held its public record open until August 29, 2019 and then following the next meeting on September 4, 2019 it provided a recommendation to the City Council to approve the plan subject to several conditions.

The City Council approved the plan in October, 2019, and Opponents sought judicial review of the City Council’s resolution. The circuit court concluded that the City Council failed to make findings of fact with regard to “residential character as required by the master plan” and that the Planning Commission failed to provide Opponents with a reasonable opportunity to cross-examine witnesses at the September 4, 2019 meeting. The court then issued an amended order and rescinded its previous decision regarding the City Council’s failure to make specific findings but affirmed the second part regarding cross-examination of witnesses. Opponents filed an appeal and 1788 Holdings and the City Council filed a cross-appeal. On appeal, the court considered (1) whether the City Council’s decision was based upon substantial evidence, (2) whether it was erroneous for not containing the required findings of fact, (3) whether the proposed automobile filling station is a permitted use in CD zone or it requires a conditional use permit, and (4) whether Opponents’ due process rights were violated when they were denied an opportunity to cross-examine witnesses.

• Substantial evidence

On the first issue, the court concluded that the decision was based on substantial evidence and was not unreasonable. Specifically, it found that the evidence showed that the proposed development was in accordance with the Master Plan and that the City Council did not err when it defined the gas station use as “accessory” to the retail use. The City Council resolution provides that according to the 1788 Holdings’ documentation, the majority of the commercial activity will take place at the retail store, and therefore, the primary use is a light commercial use rather than an auto service and repair center, and the gas station is accessory use to the retail use. Such a project would be in conformance with the Master Plan, which allows light commercial uses in the area. The court agreed that since retail sales are expected to outpace gas sales by a margin of two to one, the gas station should be considered an accessory use.

• Required findings of fact

Opponents argued that the City Council failed to make specific findings with regard to traffic and pedestrian safety, environmental, noise, and lighting impacts, whether the proposed project would be “in keeping with the residential character” of the neighborhood and whether it would be in the public interest. The court disagreed, stating that the record clearly shows that the City Council made the required findings of fact. In its resolution it stated that a shared drive aisle which would facilitate vehicular connectivity was established. Further, the plan provided for a landscape buffer between the proposed retail building and adjacent residential neighborhood. Finally, with regard to public interest, the City Council stated that the proposed project will contribute to overall economic development of the city, create jobs and generate additional tax revenues. The court thus concluded that the City Council made the required findings of fact, which is demonstrated by the record.

• Gas station as permitted vs. conditional use

The code lists permitted uses as “all uses listed as permitted … in all zoning districts unless otherwise prohibited…” Opponents’ understanding of this provision is that the only permitted uses in CD zone are those that are permitted in “every single zoning district”. They further stated that since a gas station is not permitted in every zoning district and even expressly prohibited in some, it is not permitted as of right in the CD zone and must require a conditional use permit. The court agreed with the opposite interpretation of 1788 Holdings and the City Council, which understood this provision as “so long as the use is permitted as of right in one of the other districts in the City of Gaithersburg, that use is permitted as of right in the CD Zone.” In their brief, the City Council noted that “there is no use that is permitted in all zoning districts,” which means that if Opponents’ interpretation was correct, there would be no uses permitted as of right in the CD zone. The court thus concluded that since a gas station is a permitted use in other commercial zones, it is also permitted in the CD Zone.

• Due process rights violation

The court concluded that Opponents’ due process rights were not violated, since they waited for more than three weeks before they submitted their objections, and by doing so they waived their right to cross-examine witnesses.

At the August 5, 2019 hearing, everyone who opposed the plan was given three minutes to speak. Opponents’ counsel spoke at the meeting, but he never requested to cross-examine the witnesses. The Planning Commission held its public record open until August 29, 2019, and on August 29^th Opponents’ counsel sent a letter to the Planning Commission, where he argued that the application should be regarded as a conditional use, and cross-examination of witnesses should be permitted. The court relied on the Hyson case, where “the opponents waived their right to cross-examination by failing to request cross-examination at the appropriate time during the relevant hearing.” The court then concluded that since Opponents did not request to cross-examine witnesses at the August 5, 2019 meeting, and waited for more than three weeks to submit their request, they waived their right to do so.

Cross Appeal

1788 Holdings and the City Council appealed the circuit court’s order, which concluded that Opponents were denied an opportunity to cross-examine witnesses at the September 4, 2019 Planning Commission Hearing. Similarly to its conclusion in the due process rights violation issue, the court concluded that since Opponents failed to assert that they were denied an opportunity to cross-examine witnesses at the September 4 hearing and only raised this issue in a letter two weeks after, they waived their opportunity to cross-examine witnesses. The court thus reversed the judgement of the circuit court with regard to cross-examination of witnesses, and otherwise affirmed.

Johnson v Mayor and City Council of Gaithersburg, 2021 WL 1233394 (MD 3/31/2021)

This post was authored by Matthew Loescher, Esq.

Plaintiffs, including Rabbinical College of Tartikov, brought an Action to challenge certain zoning and environmental ordinances enacted by Defendants, including the Village of Pomona, which prevented Tartikov from building a rabbinical college in the Village. This case analyzed Plaintiffs’ Motion for Attorneys’ Fees and Costs. Plaintiffs sought fees for three law firms that it retained for the litigation. Savad Churgin, Attorneys at Law, was responsible for case strategy, discovery, and factual proof at trial. Storzer & Associates, P.C. researched federal and state constitutional and civil rights issues, mainly RLUIPA, and argued in the Second Circuit. Stepanovich Law, PLC was lead trial counsel, and researched and prepared trial affidavits and cross-examination.

The court first noted that the lodestar amount is arrived at by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. Additionally, the fee applicant “bears the burden of demonstrating the number of hours expended and the type of work performed through contemporaneous time records that specify, for each attorney, the date, the hours expended, and the nature of the work done.” Here, Plaintiffs sought $5,625,711.06 in attorneys’ fees, inclusive of $5,130,528.48 for work performed through judgment, and $495,182.58 for work on the appeal. Defendants contended that Plaintiffs’ hours were needlessly duplicative, that their bills are overly vague, and that they inappropriately block billed. Defendants submitted a series of tables analyzing Plaintiffs’ fee submissions, which listed fee entries and attempted to explain the reason why the work (or a portion thereof) should be excluded. The Tables included $1,021,945.57 in reductions for work performed through judgment, and $166,838.83 in reductions for work on the appeal. The Tables suggested that the Court reduces Plaintiffs’ fee by 20% for work through judgment, and by 34% for work on the appeal.

 Defendants first claimed that Plaintiffs paid for unneeded conferences with co-counsel. The court found that Plaintiffs should not be reimbursed in full for the cost of these conferences, as they represented “duplication of effort” that was likely “inevitable, if unintentional” due to Plaintiffs’ co-counsel arrangement. In its Fees Opinion, the court indicated that it was not reasonable to pay multiple attorneys to attend “a mere pre-motion conference.” Specifically, it is unclear why Plaintiffs were required to send three lawyers to the two 30(b)(6) depositions. Conversely, billing records for Robinson & Cole indicated that Defendants sent only one attorney to most of these depositions.

 Defendants next contended that many of Plaintiffs’ time entries were overly vague. The court found that Plaintiffs should not be reimbursed for these vague entries, such as: “compare zoning amendments”, “More review of zoning amendments”, “review documents from J. Stepanovich”, and eliminated hours of attorney time for entries such as “telephone call” and “review of documents”. Plaintiffs sought reimbursement for several repetitive entries by Storzer, including: “draft master deposition outline,” “draft motion for summary judgment,” “draft opposition to defendants’ motion for summary judgment,” “draft reply brief,” “draft trial outline,” and “draft appeal brief.” The court found that while Storzer should have documented his work in greater detail, it would not reduce to zero the large number of hours spent on these and similar matters.

 Defendants further claimed that Plaintiffs excessively block billed. For example, an entry by Storzer for 8.75 hours stated as follows: “Travel to NY (1/2 time); mtg w/PS/SC; travel to Brooklyn; mtg w/clients; edit Complaint.” As discussed in the Fees Opinion, “the Second Circuit has instructed that defendants should not be penalized for a plaintiff’s choice of out-of-district counsel,” and travel time was not recoverable. In other cases, Plaintiffs’ block billing was found appropriate, and did not merit a decreased award. Moreover, the fact that Defendants paid their attorneys $5,110,134.29 for fees and costs through judgment supported the Court’s finding that this was a reasonable sum for such a complex case.

 The court also noted that Plaintiffs’ relief differed qualitatively from their initial request. Specifically, Plaintiffs sought to remove all impediments imposed by Village law to constructing their rabbinical college. While Plaintiffs succeeded in removing two of these impediments through a finding of discriminatory animus, Plaintiffs still faced a number of Village law obstacles to constructing the rabbinical college, Accordingly, the court reduced Plaintiffs’ fees award by 50% due to their lack of success. Plaintiffs’ presumptively reasonable fee of $4,781,854.40, was therefore reduced to an award of $2,390,927.20 in fees.

 Congregation Rabbinical College of Tartikov, Inc. v Village of Pomona, 2021 WL 1222159 SDNY 3/31/2021)

This post was authored by Matthew Loescher, Esq.

Plaintiffs Joe Murphy, Yoram Ben-Amram, and Galtex Development, LLC sued the City of Galveston in 2012, claiming that the City took their property without just compensation in violation of the Texas and United States Constitutions. The case began in state court, was removed to federal court, remanded to state court where it bounced between the state district court and the state appellate courts for a number of years, and returned to federal court in this case.

The City contended the court lacked subject matter jurisdiction over the case because Plaintiffs’ takings claims under the United States Constitution were not ripe for adjudication. The record reflected that the City never reached an official and final decision as to whether it would issue an SUP to Plaintiffs. At the time City Council initially voted down the SUP application, City officials pointed out numerous issues they had with the property that Plaintiffs could have resolved before reapplying for the SUP. Thus, the transcript of the City Council hearing indicated that City officials encouraged Ben-Amram to bring the property up to code, acquire the engineer’s letter, and then reapply for the SUP. Moreover, City Council members stated that they were denying the SUP over concerns about the safety of the building and the health of its future occupants, thereby suggesting that an SUP would be granted were it not for those concerns. After the City rejected the SUP application, however, Plaintiffs brought this lawsuit instead of bringing the property into compliance with applicable code and then resubmitting an SUP application reflecting completion of the repairs.

 Lastly, Plaintiffs claimed the City Code Enforcement Officer’s revocation of the property’s grandfather status amounted to an unlawful taking under the Fifth Amendment. Specifically, Plaintiffs posited that they should be excused from filing an appeal to the Board on the grandfather status issue because that effort would have been futile. The court found that Plaintiffs’ argument was founded solely on speculation, and therefore rejected it. Accordingly, Plaintiffs’ takings claim for the loss of grandfather status was not ripe, and was dismissed on that basis.

 Murphy v City of Galveston, TX, 2021 WL 1220204 (SD TX 3/31/2021)

 This post was authored by Matthew Loescher, Esq.

Polk Properties worked with the Village of Slinger on his proposed plan to convert its farmland to a residential subdivision known as Pleasant Farm Estates, which would consist of three phases of development over the course of several years. In 2007, the Village of Slinger approved Polk’s planned residential subdivision development. Installation of the infrastructure for the development was completed in August 2008. During the development project, Ronald Melius continued to farm the property by cutting and removing vegetation from the land. As a result, the Village of Slinger sought an injunction from the circuit court ordering Polk to stop the agricultural use of the property. In this case, Polk Properties, LLC and its sole member, Donald J. Thoma, sought review of the court of appeals decision, which affirmed the circuit court’s order requiring Polk to pay forfeitures for zoning violations, damages for the Village of Slinger’s lost property tax revenue, and attorney’s fees.

 The Village of Slinger argued that cessation of farming on part of the property constituted legal cessation of that use on the entire property. It was undisputed that a portion of Polk’s property was no longer being farmed because homes had been constructed on the few lots that were sold. The court found that the sale of lots, building of homes, and installation of roads and infrastructure actually reduced the nonconforming farming use on the property rather than enlarging it. Furthermore, the Village of Slinger failed to present any case law suggesting that merely reducing the nonconforming use constitutes actual cessation. As such, the court reversed the decision of the court of appeals and vacated the circuit court’s order imposing forfeitures, its monetary judgment for real estate taxes, its order authorizing special assessments, special charges, and fees to be levied against Polk, and its order enjoining Polk from using the property for agricultural purposes.

 Village of Slinger v Polk Properties, LLC, 2021 WL 1216687 (WI 4/1/2021)

Petitioner, D’Souza, the owner of a parcel of property located in a part of West Hempstead where the minimum frontage width permitted is 55 feet, applied for area variances and subdivision approval. He wanted to subdivide the subject property, which is improved with one single-family home, into three lots. He sought to maintain the existing single[1]family home on one lot and to build two new single-family homes, each on their own lot. The two additional homes, however, would each have only 15.44 feet of frontage width. The Zoning Board of Appeals denied the request. The trial court upheld the denial and petitioner appealed.  The appellate court agreed that the zoning board properly weighed the relevant statutory factors in Town Law § 267–b(3)(b) and its determination was not illegal, arbitrary and capricious, or an abuse of discretion.

Souza v. Board of Appeals of Town of Hempstead, 2021 WL 1112787 (NYAD 2 Dept. 3/24/20210)

In an appeal from a circuit court’s decision that cluster development plans submitted by two developers were not subject to review by a county’s planning commission under Code § 15.2-2232 and Code § 15.2-2286.1, the judgment is reversed. In this instance, the two properties at issue are not located within an area designated for water and sewer service. By its plain terms, Code § 15.2-2286.1(B) does not apply, and therefore Code § 15.2-2232, which requires the developers to submit their plans to the planning commission for review, is applicable. Prior approval of different plans for these developments, several years earlier, did not change the master plan, and did not obviate the needed review. The case is remanded for a review of the revised plans under Code § 15.2-2232 by the county planning commission.

Stafford County v. D.R. Horton, Inc., 2021 WL 1220736 (VA 4/1/2021)

This post was authored by Matthew Loescher, Esq,

Two real estate developers, D.R. Horton, Inc. and Metts, L.C. owned properties in Stafford County. Roughly forty percent of each parcel was located within the Stafford County Urban Services Area, which was the area that Stafford County had designated for the provision of public water and sewer service. Stafford County adopted a comprehensive plan for land use, as required by Code § 15.2-2232. This comprehensive plan showed public facilities, such as sewer lines, and designated an “Urban Services Area” where the County will provide public water and sewer service. Real estate developers filed petitions against county challenging county planning department’s determination that developers proposed development plans would need to undergo a comprehensive plan compliance review, and sought writs of mandamus requiring county to approve their development plans, writs of prohibition preventing county from ordering a comprehensive plan review, declaration that county must approve their plans. After developers’ petitions were consolidated, the Stafford Circuit Court, ruled in favor of the developers.

At the outset, the court noted that the two properties at issue were only partially located within an area designated for water and sewer service. Thus, by its plain terms, Code § 15.2-2286.1(B) did not apply. Since Code § 15.2-2286.1(B) did not control, Code § 15.2-2232 was applicable, and required the Developers to submit their plans to the planning commission for review.

The court next reviewed the circuit court’s determination that the Planning Commission’s prior approvals in 2005 and 2007 meant that no further approval was needed. The record reflected that the Planning Commission’s prior review and approval pursuant to Code § 15.2-2232 did not cause any change to the comprehensive plan. Furthermore, the court noted that it is the governing body of the locality, not the planning commission, that must approve the comprehensive plan and any changes to that plan. Here, while the Planning Commission approved prior projects in 2005 and 2007, those prior approvals were expressly limited to those specific applications and did not by their terms signify approval of different plans filed later. Accordingly, the court reversed the judgment and remanded the case for the County Planning Commission to conduct a review pursuant to Code § 15.2-2232.

Stafford Count v D.R. Horton, Inc., 856 S.E. 2d 197 (VA 4/1/2021)

This post was authored by Matthew Loescher, Esq.

Pompey Coal, a Pennsylvania business corporation, owned land within the Borough that was zoned “M-1A,” a designation that permitted manufacturing and other industrial use. In 2016, Pompey Coal sold 65.35 acres of land it owned within the Borough’s M-1A manufacturing zone to Lackawanna Energy, LLC, which constructed an electrical power plant on that property. Following this, the Borough entered into a contract with the Urban Research and Development Corporation (“URDC”) to prepare a new comprehensive plan and zoning ordinance for the Borough. As a result of the Borough Council’s passage of Ordinance No. 3, Pompey Coal alleged that it had been unable to finalize an agreement of sale of its remaining property to Northpoint because the property was no longer zoned M-1A and the landowner would not be permitted to develop the two warehouses Northpoint desired to build.

 At the outset, the court noted that the claims raised by the plaintiff solely concerned the legislative action of consideration and adoption of a local land use ordinance and zoning map, and the executive action of the planning commission’s enforcement of the ordinance in connection with its consideration and rejection of Pompey Coal’s land development plan. Moreover, the related state court actions in favor of the above, which the defendants requested the court abstain from, were not criminal prosecutions or quasi-criminal civil enforcement proceedings, nor did they implicate Pennsylvania’s interest in enforcing the orders and judgments of its courts. Accordingly, the court declined to abstain from exercising jurisdiction in this case pursuant to Younger.

Pompey Coal Company v Borough of Jessup, 2021 WL 1212586 (MD PA 3/31/2021)

This post was authored by Matthew Loescher, Esq.

Plaintiffs/Appellants Santa Fe Alliance for Public Health & Safety, Arthur Firstenberg, and Monika Steinhoff brought this case claiming that Section 704 of the Telecommunications Act of 1996 (“TCA”), New Mexico’s Wireless Consumer Advanced Infrastructure Investment Act (“WCAIIA”), the Amendments to Chapter 27 of the Santa Fe City Code, and three proclamations by the Santa Fe mayor violated due process, the Takings Clause, and the First Amendment. The Alliance claimed the installation of telecommunications facilities, primarily cellular towers and antennas, on public rights-of-way exposed its members to dangerous levels of radiation. The district court concluded that while the Alliance pled sufficient facts to establish standing, the Alliance failed to allege facts stating any constitutional claim upon which relief could be granted. The district court dismissed the Alliance’s claims as against all defendants, including Hector A. Balderas, the New Mexico Attorney General.

On appeal, the Alliance contends the WCAIIA and the Amendments to Chapter 27, by facilitating the placement of telecommunications facilities on the public rights-of-way, constituted a taking of its members’ homes and businesses. Moreover, to the extent the Alliance sought redress for alleged future losses of homes and business, because the taking had not occurred at the time the Alliance filed its amended complaint any injury was speculative. Even if the placement of telecommunications facilities on public rights-of way constituted a taking of adjoining private property, no just compensation was due to any particular individual for a yet-to-occur taking.

Next, the Alliance alleged the WCAIIA and the Amendments to Chapter 27 violated procedural and substantive due process. The record reflected that the WCAIIA and the Amendments to Chapter 27 directly altered the process used by Santa Fe to approve new telecommunications facilities. Specifically, the WCAIIA limited the ability of localities to regulate “small wireless facilities” in the public rights-of-way. Therefore, the Alliance satisfied the standing requirements relative to its Count One claim that the WCAIIA and the Amendments to Chapter 27 deprived its members of notice and an opportunity to be heard.

The Alliance next claimed the TCA, by giving authority to the FCC to regulate radio-frequency emissions, preempted state and local regulation of those emissions, as well as the ability of state and local authorities to provide legal remedies for injuries attributable to radio-frequency, radiation emissions. The court held that the Alliance lacked standing to advance this claim, as it was contingent on New Mexico and/or Santa Fe, in the absence of the TCA, regulating radio-frequency emissions to a greater degree than the FCC does through 47 C.F.R. § 1.1310. No allegations in the amended complaint make such an inference plausible, however.

The Alliance lastly contended that the TCA, the WCAIIA, and the Amendments to Chapter 27 all infringed on its members’ First Amendment right to petition the government by foreclosing the ability of local officials to consider their arguments about the health effects of exposure to radio-frequency emissions. Count Nineteen alleged the TCA infringes the First Amendment free speech rights of Alliance members because local officials relied on the TCA to ignore and reject health-effect-related speech against new telecommunications facilities. In Count Twenty, the Alliance alleged the Amendments to Chapter 27 violate its members’ freedom of speech rights because the Amendments formally adopt the TCA’s delegation of regulation of radio-frequency emissions to the FCC. The court held that the Alliance’s allegations were sufficient to satisfy the standing requirements.

Santa Fe Alliance for Public Health and Safety v City of Santa Fe, NM, 2021 WL 1182285 (10th Cir. CA 3/30/2021)