Peterson v. City of Grand Rapids

182 F.Supp.3d 750

William J. Peterson and Patricia Peterson, Plaintiffs,

v.City of Grand Rapids et al., Defendants.

Case No. 1:15-cv-671

United States District Court, W.D. Michigan, Southern Division.

Signed April 22, 2016

Geoffrey L. Gillis, Roland Lindh, Geoffrey L. Gillis PLLC, Grand Rapids, MI, for Plaintiffs.

Elliot J. Gruszka, Kristen Lee Rewa, Grand Rapids, City of (City Attorney), Andrew John Rodenhouse, Rodenhouse Kuipers, Grand Rapids, MI, for Defendants.

OPINION

ROBERT HOLMES BELL, UNITED STATES DISTRICT JUDGE

Plaintiffs William J. Peterson and Patricia Peterson reside at 639 Cherry St., Grand Rapids, Michigan. Plaintiffs operated a "small scale recycling business" at their home, which caused tension with City of Grand Rapids (the "City") officials—particularly Eric Jordan and Carolyn Forsythe—who were responsible for enforcing the City's Zoning Code. Mr. Peterson wanted to continue operating his business on his property even though the Zoning Code prohibited him from doing so. He states that there is "no property [in the City] available to persons conducting recycling sorting operations like the plaintiffs'[.]" (2d Am. Compl. ¶ 7, 8, ECF No. 13.) The City "refused or failed to act on requests to change zoning to provide for small scale recycling," despite City officials' knowledge that "the Code needed to be changed." (Id. ¶ 8, 9.)

In the spring of 2012, William Peterson had several discussions with Jordan and Forsythe about his recycling operation. He noted their "refusal to particularize their objections" to the recycling operation in writing, and their failure to inform him what "constituted compliance" with the Zoning Code. (Id. ¶ 9.) Eventually, as a result of Plaintiffs' recycling operation, the City issued a housing violation ticket. (Id. ¶ 15.) Plaintiffs state that the ticket was appealed to the Board of Housing Appeals, and a hearing was set for July 2012. (Id. )

Prior to the scheduled hearing, Defendants Jordan and Forsythe filed an affidavit to obtain a search warrant at Plaintiffs' residence. The warrant was obtained to "verify the existence of alleged circumstances jeopardizing the public health and safety, being City Housing and Nuisance Code violations, as determined necessary by the City Manager of the City of Grand Rapids, and to abate the conditions." (Aff. for Search Warrant, ECF No. 15-5, PageID.154.) Defendants sought "[t]o enter the property with the City contractor, Pit Crew, GRPD, to remove all discarded debris/materials, garbage, rubbish, auto parts, appliances/furniture, all unlicensed and/or inoperable vehicles from the property." (Id. )

The warrant was executed on June 28, 2012, when "a large number of armed police officers confronted and restrained plaintiffs...at their home" and "prevented them from protecting their property from collection in trucks and removal by Defendant City and its contractor, Pit Crew Company." (2d Am. Compl. ¶ 23.) Plaintiffs state that they "had no notice of the raid nor an opportunity to be heard." (Id. ¶ 24.) The property removed from Plaintiffs' residence included a Ford truck, valuable scrap metal, and a set of drawers containing tools and other valuable property. Plaintiffs state that some of the property that was seized was taken to the dump, while some of it was sold by Defendants, whom Plaintiffs believe converted the materials for personal use. (Id. ¶ 32.)

As a result of these actions, Plaintiffs have raised several claims against the City of Grand Rapids, Eric Jordan, Carolyn Forsythe, and Shelly Weiss (collectively, the "City Employees"), Pit Crew Company ("Pit Crew"), and Pit Crew's owner, John Morton. The matter is before the Court on Defendants City of Grand Rapids and City Employees' motion to dismiss. Defendants move to dismiss some of Plaintiffs' claims under Rule 12(b)(1) of the Federal Rules of Civil Procedure, and others under Rule 12(b)(6).

I. Rule 12(b)(1)

Defendants argue that the Court lacks jurisdiction to hear Plaintiffs' claims raised under the Fifth Amendment's Takings Clause because Plaintiffs have failed to pursue a remedy in state court, and that the Court lacks jurisdiction over Plaintiffs' exclusionary zoning claims because Plaintiffs have not sought rezoning or applied for a land use variance. (Mot. to Dismiss 6-10, ECF No. 15.) Defendants argue that dismissal of these claims is proper under Federal Rule of Civil Procedure 12(b)(1), which allows a party to assert the defense of lack of subject-matter jurisdiction by motion. Fed. R. Civ. P. 12(b)(1).

Importantly, Defendants make this argument based on "the facts at hand," and not on the sufficiency of the Complaint. (Mot. to Dismiss 4.) There is a "'crucial distinction, often overlooked between 12(b)(1) motions that attack the complaint on its face and 12(b)(1) motions that attack the existence of subject matter jurisdiction in fact, quite apart from any pleadings."' RMI Titanium Co. v. Westinghouse Elec. Corp. , 78 F.3d 1125, 1134 (6th Cir.1996) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n , 549 F.2d 884, 890 (3d Cir.1977) ).

The factual attack...differs greatly for here the trial court may proceed as it never could under Rule 12(b)(6) or Fed. R. Civ. Pro. 56. Because at issue in a factual attack is the trial court's jurisdiction—its very power to hear the case—there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.

Id. (collecting cases). When reviewing a factual attack, "a trial court has wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts." Ohio Nat'l Life Ins. Co. v. United States , 922 F.2d 320, 325 (6th Cir.1990).

A. Exclusionary Zoning Claims

Defendants first move to dismiss Plaintiffs' claim of exclusionary zoning brought under the Michigan Zoning Enabling Act, which alleges that the City:

[F]ailed and refused despite repeated requests by Plaintiff Peterson and others to accommodate small scale recyclers under its zoning ordinances which resulted in an illegal and unconstitutional deprivation of his right to make a living in the city. This failure violated the Michigan Zoning Enabling Act, MCL 125.3207...The City's Zoning Code under Section 5.9.16 provided only for recycling sorting operations only on 2 acre lots in the Industrial Transportation Zone with other restrictions which had the effect of totally prohibiting such a use. Section 5.9.24 for recycling collection stations, likewise, totally prohibited such a use. There is a demonstrated need for recycling collection sorters like Plaintiff...Despite this demonstrated need, the City deprived Plaintiff of due process of law by refusing to accommodate his recycling activity in its zoning code."

(2d Am. Compl. ¶¶ 57, 58.)

In Hendee v. Putnam Township , 486 Mich. 556, 786 N.W.2d 521 (2010), a similar claim was raised. There, the plaintiffs filed a complaint alleging, inter alia , that the township "wrongfully engaged in exclusionary zoning by enacting an ordinance that did not, on its face, permit development of a 498-unit MHC on plaintiffs' property." Id. at 528. Mich. Comp. Laws § 125.3207 states that:

A zoning ordinance or zoning decision shall not have the effect of totally prohibiting the establishment of a land use within a local unit of government in the presence of a demonstrated need for that land use within either that local unit of government or the surrounding area within the state, unless a location within the local unit of government does not exist where the use may be appropriately located or the use is unlawful.

Id.¹ The plaintiffs argued that the township's zoning map "classified no appropriate land" for a manufactured housing community (MHC), that the township's master plan designated only unsuitable property for that use, and that the township's ordinance was therefore invalid. Id. at 524. The plaintiffs had not, however, sought a land use variance with the township prior to filing their lawsuit.

The Michigan Court of Appeals "implied that plaintiffs were free to pursue their exclusionary zoning claim because the ordinance unconstitutionally excluded a lawful use (MHC)." Id. at 526. The Michigan Supreme Court disagreed, holding that the plaintiffs were required to seek a final decision from the governing body before filing a complaint alleging exclusionary zoning claims. Id. at 531. The Court stated that "[p]recisely because the statute prevents a 'zoning ordinance or zoning decision' from 'hav[ing] the effect of totally prohibiting the establishment of a land use within a township in the presence of a demonstrated need for that land use within either the township or surrounding area within the state ,'...the zoning authority must first be afforded the opportunities (1) to determine the effect of its ordinance in light of evidence demonstrating a need for the proposed land use and (2) to render a zoning decision based on that evidence before a facial exclusionary zoning claim can become ripe for judicial review." Id. at 532. The plaintiffs' failure to submit an application to rezone its property to permit an MHC "effectively denied the township any opportunity to consider whether that alternative use of the land would be acceptable" and, thus, the plaintiffs' "exclusionary zoning claim [was] not ripe for judicial review." Id. at 531.

The same is true in this case. Similar to Hendee , where the township's master plan "contemplate[d] MHC use," but only in areas that the plaintiffs alleged were unsuitable, id. at 531 n. 26, the Grand Rapids Zoning Code allows for materials recovery, recycling, wrecking and salvage, but only...