Systematic Recycling LLC v. City Of Detroit

685 F.Supp.2d 663

SYSTEMATIC RECYCLING, LLC, Plaintiff,

v.CITY OF DETROIT and Willa J. Williams, Defendants.

Case No. 09-11430.

United States District Court,

E.D. Michigan,

Southern Division.

Decided: Feb. 17, 2010.

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Cindy R. Victor, Victor Firm, Sterling Heights, MI, for Plaintiff.

Eric B. Gaabo, Detroit City Law Department, Detroit, MI, for Defendants.

OPINION AND ORDER GRANTING DEFENDANTS' MOTION FOR CLARIFICATION OF AND RELIEF FROM TEMPORARY RESTRAINING ORDER AND DENYING PLAINTIFF'S AMENDED MOTION FOR PRELIMINARY INJUNCTION

DAVID M. LAWSON, District Judge.

The plaintiff is a company that operates a composting facility in the Delray neighborhood of Detroit under a conditional zoning permit issued by the City of Detroit's Buildings and Safety Engineering Department. One of the conditions to the grant of the zoning permit was the execution of a "Community Host Agreement" between the plaintiff and the city, which required city council approval. After the Detroit City Council approved the Community Host Agreement and the conditional zoning permit was issued, disturbing facts came to light suggesting that the approval may have been procured by bribes, which cast a shadow over the validity of the agreement. In addition, the city received complaints about the operation of the facility, and the fire department reported possible spontaneous combustion of some of the compost. Rather than attempt to rescind the Host Community Agreement however, the city simply let it expire at the end of its stated two-year duration, and then moved to revoke the conditional land use grant based on the failure of that condition. The plaintiff filed an action in the Wayne County, Michigan circuit court under 42 U.S.C. § 1983 alleging a violation of its due process and equal protection rights and obtained a temporary restraining order (TRO) enjoining the city and its Interim Director of the Department of Environmental Affairs, defendant Willa J Williams, from taking action to revoke the permit. The defendants timely removed the action to this Court and filed a motion seeking clarification of or relief from the state court's TRO. The plaintiff filed an amended motion for preliminary injunction. The Court held hearings on the motions, permitted limited discovery, and received several supplemental filings from all parties. While the matters have been under advisement, the city has honored the state court's TRO. The Court now finds that the plaintiff has not established a violation of its rights under the Equal Protection Clause, and even if the plaintiff has a property interest in the continuation of the conditional zoning permit, which is questionable, the city's proposed pre-deprivation hearing procedure coupled with the opportunity for post-hearing judicial review provides ample procedural protection to satisfy the Due Process Clause. Because the plaintiff has not demonstrated a likelihood of success on the merits, and other factors do not favor the plaintiff, the Court will grant the defendant's motion for clarification, deny the plaintiff's amended motion for a preliminary injunction, and dissolve the state court's TRO.

I.

Systematic Recycling, LLC operates a composting facility located at 9125 Jefferson in the Delray neighborhood of the City of Detroit, which, according to the defendants, is an area of intense industrial activ- ity zoned as "M4" on the Detroit Zoning Ordinance Map. Renee Michaels is the sole owner of Systematic Recycling. Michaels and her family members previously had operated a composting facility in Macomb County known as King of the Wind Farms Inc.; according to the defendants, that facility was closed because it generated about four hundred complaints of nuisance. Michaels then leased the facility at 9125 Jefferson from James R. Rosendall, a former Synagro Technologies vice president. Before the plaintiff began its current operations, the facility housed a paper company plant.

As noted above, the land the plaintiff proposed to use for the composting facility was zoned "M4" under Article X, Division 5 of the Detroit City Zoning Ordinance. A composting facility is not listed as a permitted use in that district, and the city's ordinances in effect at the time did not mention "composting facilities," although it professed to regulate such uses as "recycling centers." Wayne County regulated composting facilities under its solid waste ordinance, which required an operator to enter into a host community agreement under its solid waste management plan. For the City of Detroit, it appears that the plaintiff's application to operate a composting facility was the first of its kind.

On April 26, 2006, the City of Detroit's Buildings and Safety Engineering Department conditionally approved the plaintiff's application to establish and operate the composting facility. One of the conditions for the approval was that "Systematic Recycling shall enter into a Host Community agreement with the City of Detroit's Department of Environmental Affairs prior to operating the site as a Compost facility." Defs.' Mot. for Clarification or Relief from Apr. 30, 2009 Order [dkt. #5-3], Ex. A (Conditional Zoning Permit), at ¶26. However, the city council was slow to approve the Host Community Agreement and Systematic was allowed to begin operation and start receiving waste in the summer of 2006 under a temporary permit issued by the City. It was not until March 30, 2007, almost a year later, that the plaintiff finally entered into the Host Community Agreement with the city. The Host Community Agreement was to "continue in effect for a period of Two (2) years" beginning on the date it was signed. Defs.' Mot. for Clarification or Relief from Apr. 30, 2009 Order [dkt. # 5-4], Ex. B at § 17.

The defendants explain that the host community agreement requirement was important to them in order to enhance the city's regulatory authority over composting facilities. Vincent R. Nathan, Ph.D., the director of the city's Department of Environmental Affairs, testified that there was "a void in the law between state and Wayne County." PL's Notice of Filing Documents in Supp. of Mot. for Prelim. Inj., Ex 5 [dkt. # 21-8] (Nathan dep.) at 49. He said the state and local governments "had no composting regulation, so we developed the host community agreement. City council had to approve it." Ibid.

It was not until March of 2008 that the State of Michigan enacted legislation to regulate composting facilities located in the state. Before that time, unless a property owner's practices violated the air or water pollution provisions of certain federal statutes, the state Department of Environmental Quality could not take any enforcement actions against owners of composting facilities. See Analysis of Senate Bill 513 as enacted, Jan. 30, 2007, 94th Leg., Reg. Sess. (Mich.2007). The statute regulating composting facilities was enacted in January 2008, see Mich. Comp. Laws § 324.11521 (eff. Mar. 26, 2008), based on the concern that "existing law does not give State agencies sufficient authority to take actions against rogue composters in a timely fashion." See First Analysis of Senate Bill 513, July 5, 2007, 94th Leg Reg. Sess. (Mich.2007). The only facility affected by the new statute in the City of Detroit happened to be Systematic.

Before the 2008 statute, the city's regulatory authority over composting facilities rested upon Wayne County's solid waste ordinance, see Enrolled Wayne Co. Ord 2004-787, § 235, and the Wayne County Solid Waste Management Plan, which city representatives did not regard as especially effective. Detroit does not have an ordinance directly regulating composting facilities in the city either. However, the city's zoning ordinance regulates recycling centers, which include "land, with or without buildings, upon which wastes are recovered in a process designed to provide an acceptable reuse of all or part of the waste." City of Detroit Zoning Ordinance § 61-16-162. The plaintiffs business fits that definition, and as such it is designated "conditional manufacturing and industrial use[]" under the ordinance, see id. § 61-10-83(12), in the M4 District, id. § 61-10-79. The city concluded therefore that its Buildings and Safety Engineering Department could "impose reasonable conditions or limitations upon the establishment, location, construction, maintenance, or operation of the Conditional Use as may be necessary, in its judgment, for the protection of the public interest, health, safety, welfare and environment...." Id. § 61-3-241(b). The host community agreement requirement was one of those conditions.

The host community agreement included a number of requirements and restrictions for operating the facility, closure and remediation provisions, and performance bond obligations, and it stated that a violation of any of these conditions could result in the revocation of the grant. The agreement required the plaintiff to pay a onetime fee of $10,000 to the city and a solid waste host fee of $10,000 to be paid semiannually, and submit to regular inspections by the city officials. The termination provisions state:

This Agreement shall take effect on the date executed by the parties, and shall continue in effect for a period of Two (2) years. The parties agree to review the host community payment provisions of this Agreement from timeto-time [sic], but in no event later than the annual anniversary of this Agreement. This fee will increase or decrease by the same percentage as the Consumer Price Index, All Urban, which shall be measured over the most recently reported 12-month period. The initial adjustment shall take place on the first anniversary of this Agreement with each subsequent adjustment to take place on an annual basis thereafter.

This agreement may be terminated by the City for any reason if the Applicant has received two (2) or more significant violations from the City within a 180...