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Throughout the last year, the Michigan Court of Appeals and the Michigan Supreme Court have decided several decisions that will have a notable impact on townships and municipalities in general. Given the large number of recent municipal cases, this E-Letter could not cover all recent municipal as a whole. However, our December 2022 E-Letter addressed many of the recent cases that are not included in this E-Letter. The cases addressed in this E-Letter highlight the importance of having robust ordinances, with detailed definitions; explain how a court will interpret ambiguity within an ordinance, including using the municipality’s historical interpretation of the ordinance; explore the conflict between Michigan law and local regulations on veterans operating food trucks; address some subtle distinctions within the context of zoning; and explain the interaction between Michigan’s marihuana statutes, competitive review of marihuana permit applicants, and the Open Meetings Act. This E-Letter explores those topics in-depth and provides practical takeaways for Townships to consider.

COURTS ARE MORE LIKELY TO UPHOLD A MUNICIPAL DECISION IF IT HAS ROBUST, UNAMBIGUOUS ORDINANCE PROVISIONS

The Michigan Court of Appeals addressed several challenges to local ordinances and a theme emerged; namely, a municipality with a robust, unambiguous ordinance addressing the specific issue being challenged is more likely to have its decision upheld by a court. So long as the municipality follows the plain language of its ordinances, a comprehensive and detailed ordinance will bolster the municipality’s decision and provide a basis to defend that decision in court. Also, a comprehensive and robust ordinance allows the municipality to specifically tailor its provisions to achieve specific goals and outcomes, such as desirable sign policies, more control over non-conforming uses, and clearly defined zoning lots.

For example, Detroit Media Group leased a portion of a building for advertisement signs. Detroit Media Group obtained a zoning variance from the City, which allowed it to display advertisement signs on the leased property. Eventually a new landowner bought the property, and Detroit Media Group agreed to stop displaying signs and functionally vacate the leased wall temporarily to allow for building remodeling. The landowner made no mention of removal or terminating the lease. Seeking approval from the City for a “change in advertising,” Detroit Media Group filed an application, which resulted in a Zoning Board of Appeals (“ZBA”) appeal. Eight days before the ZBA appeal, Detroit Buildings and Safety Engineering Department sent Detroit Media Group a letter, which raised for the first time the claim of abandonment of the lease.

Initially, the ZBA determined that, under the ordinance, an analysis of the lessee’s conduct (Detroit Media Group) was dispositive as to the issue of abandonment, and thus the ZBA ruled that Detroit Media Group overcame the Ordinance’s “presumption of abandonment.” But, after some complaints by City Council, the ZBA held a meeting to reconsider its decision, and the ZBA reversed itself, stating that landowner conduct is dispositive as to the presumption of abandonment. Accordingly, the ZBA only considered the landowners conduct, not Detroit Media Group’s conduct (the lessee). Detroit Media Group challenged the ZBA’s reconsideration decision in circuit court, which ruled in favor of Detroit Media Group finding that the presumption of abandonment was overcome.

In affirming the circuit court, the Court of Appeals determined that the City’s zoning ordinances clearly defined the presumption of abandonment, the relevant evidence to prove abandonment, and the standard for overcoming the presumption of abandonment. Due to the specific provisions within the City’s ordinance that define and clearly articulate the standard for the presumption of abandonment, a leaseholder is considered an “owner” for purposes of determining if a use had been abandoned. Thus, the actions and conduct of the leaseholder, rather than the landowner, must be considered to determine if the presumption of abandonment applies and whether the presumption can be overcome. Therefore, the specific definition of the term “owner” in a zoning ordinance impacted the proper zoning review standard.

This case illustrates not only the importance of well-defined, robust provisions within the zoning ordinance, but also the importance of understanding the provisions within your ordinances. Here, the City’s ordinance expressly states that the conduct of the lessee must be considered when addressing the “presumption of abandonment.” Thus, even if the City had a historical practice of interpreting the provision as only addressing the landowner’s conduct, the court did not find an ambiguity within the ordinance, and thus the plain language of the ordinance controls the decision. Detroit Media Group v Detroit Board of Zoning Appeals, Michigan Court of Appeals (2021).

In a similar case involving the City of Grand Rapids, the Michigan Court of Appeals upheld a ZBA’s denial of electronic sign permits because the clear language of the ordinance unambiguously states that electronic signs are not permitted in any of the relevant zoning districts where Plaintiff’s proposed electronic signs were located. Moreover, the ordinance made it clear that changing a sign from conventional to electronic is not a permissible change to a non-conforming use.

The City had a robust overlay or zoning ordinances and police power ordinances that addressed the permissible use of billboards and signs, both conventional and electronic. This robust overlay of local law provided a basis for the court to analyze the Plaintiff’s challenge and provide the City with many rational justifications to defend their decision to deny permits. A robust sign policy is crucial to maintaining control of signage within a municipality. For example, without the specific electronic versus static provisions, non-conforming sign provisions, and specific zoning districts where electronic signs were prohibited, the City’s defense of its decision to deny permits would have been weakened. Outfront Media LLC v City of Grand Rapids, Michigan Court of Appeals (2022).

The application of particular definitions under a zoning ordinance continued to be relevant in the application of marihuana buffers. For example, the Michigan Court of Appeals upheld the City of Detroit’s rather unique and unconventional construction and definition of a “zoning lot.”

The City’s zoning ordinance does not allow marihuana facilities in “drug-free zones,” which includes “within 1,000 feet radius of the zoning lot of . . . a school.” The proposed marihuana facility is within 1,000 feet of a Catholic School’s zoning lot. The Catholic School has a chapel and school building, which are adjacent but technically on different parcels. Specifically, the proposed facility would be located only 872.8 feet from the outermost corner of the lot occupied by the church, but more than 1,000 feet from the parcel with the school. The City concluded that the entire tract, and not just the parcel upon which the school is built, constituted the “zoning lot” under the ordinance. Thus, the proposed facility would technically be more than 1,000 feet from the school, but less than 1,000 feet from the church, which is owned by the same entity, occupies the same tract of land, and is not incidental to the school (i.e. school and church functions are very intertwined). As a result of the definitions addressing zoning lots, the City was able to successfully defend its decision to not allow the marihuana facility at the proposed location due to its prohibited proximity to the zoning lot of the school.

The City’s ordinance clearly defined a “zoning lot” and its parameters. It is important to clearly define lot, parcel, property, zoning lot, condominium unit, site condominium, and similar terms within a zoning ordinance because they can be important in deciding setbacks, buffers, minimum acreage, and lot coverage. Do not assume that a legal description for a parcel is the default meaning of a lot, parcel, property, or zoning lot under your zoning ordinance. Also, implement the provisions consistently, paying close attention to amendments that may alter the provision, to further strengthen and defend your decisions. Alosachi v City of Detroit, Michigan Court of Appeals (2022).

COURTS ADDRESS THE PROCESS FOR INTERPRETING AMBIGUITIES WITHIN AN ORDINANCE, INCLUDING USING HISTORICAL INTERPRETATIONS

The Michigan Court of Appeals addressed the process for interpreting an ambiguous zoning ordinance provision, specifically when a court will weigh the municipality’s historical interpretation of a troublesome provision. A municipality’s historical interpretation of an ordinance provision should be consistent and equitable. If a court finds that an ordinance provision is truly ambiguous, a municipality’s historical interpretation could persuade a court that the historical interpretation of the provision is the interpretation that should be used to resolve the ambiguity within the ordinance.

The Court of Appeals affirmed the decision of the circuit court to reverse the Township ZBA’s decision to deny a zoning permit. In this case, the Plaintiff purchases an unconventional shaped property (33 feet wide at the front, but over 1,300 feet wide throughout most of the parcel). They asked the Township’s Zoning Administrator if the lot was buildable. Initially, the Zoning Administrator said it was buildable, but later it was determined to not be buildable. Despite the Zoning Administrator’s verbal denial of the zoning permit, the ZBA still considered Plaintiff’s appeal. Eventually, a letter was sent from the Township to Plaintiff, stating the permit was not compliant with ordinance requirements because the parcel was not a “buildable lot” under the ordinance and rejecting any reliance on the Zoning Administrator’s verbal statements.

In analyzing the ZBA’s decision to deny the zoning permit, the court determined that some of the provisions that formed the basis for the ZBA’s decision were ambiguous. The court reiterated that “a reviewing court should give deference to a municipality’s established historical interpretation of its own ordinances only if the ordinance is ambiguous and the municipality’s interpretation is reasonable.” Here, the ordinance was not ambiguous as to the methodology for measuring the “front building line;” thus, the historical method used by the Township to measure frontage was moot, and the plain language of the ordinance controls the measurement of buildable frontage. If an ordinance is ambiguous, courts will defer to a municipality’s historical interpretation of the ordinance provision, so long as the historical interpretation and application are reasonable.

For example, here the municipality interpreted its 10-day ZBA appeal deadline as “non-jurisdictional” (meaning that missing the deadline does not preclude an appeal with the ZBA). Because the ordinance did not say whether the 10-day deadline was jurisdictional, the court determined the provision was ambiguous. After the court determined that the 10-day deadline was ambiguous as to whether it was jurisdictional, the municipality’s reasonable historical interpretation that the deadline was not jurisdictional controlled the analysis. Note that the Township tried to argue that the deadline was jurisdictional, in contrast to its own historical interpretation, and the court admonished the Township for “trying to have it both ways.” Thus, it is important to ensure that a Township’s historical interpretations and implementations of its ordinance is reasonable and consistent because these historical interpretations can be used by courts to resolve ambiguities, regardless of whether the historical interpretation favors the municipality’s position in the dispute. Anscomb v Township of Frankenmuth ZBA, Michigan Court of Appeals (2022).

Relatedly, since ambiguities and historical interpretations of ordinances can have a dramatic impact on enforcement actions, use zoning tools to your advantage. For example, consider requesting an interpretation from the ZBA prior to proceeding with enforcement. Terms and phrases within a zoning ordinance may be subject to dispute during an enforcement case and asking for an interpretation of an ordinance provision may help to avoid inconsistent applications of the same provision. A court is more likely to defer to a ZBA decision if the ZBA arrives at a reasonable and independent decision.

For example, the Michigan Court of Appeals decided a case pertaining to the definition of an “agribusiness.” Essentially, there was a mulch manufacturing operation in an agriculturally zoned district that was being challenged by an adjacent landowner. The dispute turned on whether the mulch manufacturing operation was an agribusiness, which was allowed in the zoning district with special land use approval. Both the ZBA and the circuit court determined that the operation was an agribusiness. Again, the court shows a lot of deference to a municipality’s decision, granting a large degree of discretion to the Township’s determinations in the face of a challenge so long as robust, reasonable, and well-defined procedures are followed in a non-arbitrary manner. For example, the court placed a large degree of weight on the fact that the ZBA provided a well-articulated and reasonable factual justifications for their decision. Tullio v Attica Township, Michigan Court of Appeals (2022).

In conclusion, when a court determines that there is ambiguity within an ordinance, the municipality’s historical interpretation of its own ordinance will be used to resolve the ambiguity, so long as the historical interpretation is reasonable. Further, a court is more likely to uphold a municipality’s decision if the public body making the decision arrives at its determination independently and provides a well-articulated justification for the decision, rather than merely adopting a previously decided determination. Thus, it may be relevant in certain circumstances to understand how your ordinance has historically been implemented and to take advantage of the zoning tools at your disposal, such as requesting an interpretation of an ordinance provision ahead of an enforcement action to avoid inconsistent applications of that ordinance provision.

COURTS DELINEATED SEVERAL SUBTLE DISTINCTIONS AND TRICKY ISSUES WITHIN THE CONTEXT OF ZONING

The Michigan Court of Appeals decided several cases last year that highlight some subtle distinctions in the context of zoning. For example, there was interest in building a solar energy operation in the Township of Benton, but the Township did not have a solar ordinance. There was opposition to the solar project within the Township, which resulted in the Board passing a moratorium (pursuant to the Michigan Zoning Enabling Act) that precluded the issuance of solar permits for one year or until a solar ordinance was adopted. Later in the year, the Township approved an “interim zoning ordinance” that pertained to solar energy land uses.

Subsequently, the Plaintiff submitted notice of intent to file a referendum petition pursuant to MCL 125.3402, challenging the interim zoning ordinance. The Township denied the referendum petition; thus, Plaintiff sought injunctive relief in circuit court. The Township’s position was that there was no right of referendum to challenge an interim zoning ordinance. The court agreed with the Township. The court stated that, under the MZEA, “Township citizens have the right to seek referendum of a permanent zoning ordinance if one is adopted. No such right exists with respect to an interim zoning ordinance.” Sandstone Creek Solar v Township of Benton, Michigan Court of Appeals (2021).

Another subtle distinction that was explained by the Court of Appeals pertains to legislative decisions compared to administrative decisions. Under the Michigan Zoning Enabling Act and the Lima Township Ordinance, there is a distinction between “legislative” decisions versus “administrative” decisions. Specifically, the ZBA has the authority to hear appeals for and remedy administrative decisions, but not legislative decisions. Here, Lima Township Board granted a conditional rezoning, from Rural Residential (RR) to Light Industrial (LI), for a parcel that was an abandoned factory for over 30 years. In 2016, the property owners began making repairs and sought conditional rezoning, which was granted by the Township Board.

The court explains that the adoption of a zoning ordinance is a legislative act, and the rezoning of a single parcel from one zoning district to another is an amendment of the zoning ordinance and is also a legislative act. In contrast, site plan reviews and approval of special land use permits are administrative decisions. The distinction between administrative and legislative decisions is important because of the requirement that an aggrieved party must exhaust all administrative remedies before petitioning a court. Under this doctrine, a party that seeks to challenge an administrative decision must appeal to the ZBA before a circuit court will have jurisdiction to hear a challenge. Conversely, if a decision is legislative, the ZBA cannot hear the appeal or provide a remedy, which results in the aggrieved party being able to challenge the legislative decision in circuit court without first having to appeal to the ZBA. Therefore, it is important to pay attention to whether a decision is administrative or legislative because it could influence whether the initial challenge to the decision takes place at the ZBA or the circuit court.

In short, when a party is challenging a zoning decision by a municipality, if the zoning decision is legislative and not administrative, the challenger may not be required to exhaust administrative remedies by appealing to the Zoning Board of Appeals; rather, the circuit court can hear the zoning challenge. Legislative decisions generally are prospective, policy decisions, whereas administrative decisions are generally on a case-by-case basis. Connell v Lima Township, Michigan Court of Appeals (2021).

MICHIGAN COURT OF APPEALS RESOLVES A CONFLICT BETWEEN A STATE LAW REGARDING VETERANS’ RIGHTS AND LOCAL REGULATIONS ON FOOD TRUCKS

Given the rise in popularity surrounding food trucks, the Michigan Court of Appeals decided a case pertaining to a State statute that provides veterans with an affirmative statutory entitlement to operate a food truck and municipal regulations on food trucks that required a food truck owner to obtain a permit and operate within a specific zoning district. Notably, the Plaintiff is a military veteran, which entitles him to special statutory rights for operating food trucks, or “peddling” goods. These affirmative state statutory entitlements would not be granted to a non-veteran. The Plaintiff wants to operate a food truck in the Township, so he received permission to set up in a store parking lot, which was in a C-1 zoning district. However, the Township only allows food trucks in M-1 zoning districts, and even in an “M” zoning district, a food truck would require a special use permit. Plaintiff sued alleging that the result of the Township’s ordinances was to entirely prohibit food trucks within the Township, which would conflict with—and be preempted by—state law.

Pursuant to MCL 35.441(1), “A veteran may sell his or her own goods within this state if the proceeds from the sale of the goods are to be used for his or her direct personal benefit or gain.” Further, the Act provides that a veteran must obtain a license to sell goods, and such a license is to be issued at no cost by the clerk of a county in which the veteran resides. MCL 35.441(2); MCL 35.442(1). The issues in this case were whether the Township could impose limitations on where veterans may conduct their sales of goods, and whether the Township can require veterans to obtain special land use approval to sell goods or operate a food truck.

The Michigan Court of Appeals held that under State law, the Township may not charge the Plaintiff a fee for seeking a special use permit, so the application fee must be waived.  Also, the Township may use the special use permit process for the limited purpose of ensuring that the Plaintiff carries on his sale of goods in an appropriate location and manner, but no more. In other words, granting the special use permit must be an ultimately foregone conclusion because pursuant to the Act, plaintiff has a right to conduct sales of goods in the Township. However, the Township may validly enact a zoning ordinance restricting food trucks to a single zoning district.

Therefore, there are special considerations that must be addressed when dealing with veterans that wish to sell goods within your municipality. Specifically, to avoid conflict and ultimately state law preemption of local regulations, veterans must be allowed to sell goods, the application fee for special land use approval must be waived, and special land use approval must be granted. However, a municipality is allowed to restrict food trucks or other mobile vendors to a single zoning district. But the court states “it is the Township’s obligation to ensure the existence of some property that might be appropriate for a mobile food stand—if necessary, by sua sponte [of one’s own accord, voluntarily] rezoning some other zoned property.” Padecky v Muskegon Charter Township, Michigan Court of Appeals (2022).

COURTS ADDRESS THE INTERACTION BETWEEN MICHIGAN’S MARIHUANA PERMIT COMPETITIVE REVIEW PROCESS AND THE OPEN MEETINGS ACT

As for the increasingly pervasive field of Michigan marihuana law, the Court of Appeals offered some guidance related to marihuana facility permit applications, permissible competitive review criteria, and the relationship between competitive review and the Open Meetings Act. Consistent with the recent trends in Michigan’s marihuana law, the conclusion reached by the Court of Appeals is favorable to municipalities.

In this case, the City of Berkley allowed for three adult-use marihuana facility permits, but it received more than three applicants, which triggered their competitive review process, consistent with similar references in the Michigan Taxation and Regulation of Marihuana Act (MRTMA). The unsuccessful applicants challenged the City’s competitive review criteria, claiming that the criteria used by the City violated the MRTMA. Specifically, Plaintiffs alleged that the City’s criteria violated the MRTMA because they allowed the City to score applications based on factors that were not relevant to the operation of a marijuana establishment.

In affirming the City’s criteria as compliant with MRTMA, the court endorses certain competitive review criteria, stating that these criteria are consistent with MRTMA. As the court explains, the statute does include the qualifier “within the municipality,” and the court reads this qualifier as permitting a municipality to craft criteria suited to its own local concerns. The court determines that MRTMA authorizes a municipality to adopt a competitive process to select applicants that are best suited to operate within the municipality. As a result, the court endorses competitive review criteria that includes concerns specific to that community, including green infrastructure, sustainability, aesthetics, and economic goals.

As for limitations on the criteria that can be considered during competitive review, the court notes that MRTMA expressly permits a municipality to adopt a marihuana ordinance so long as it “(1) is not unreasonably impracticable, (2) does not directly conflict with the MRTMA or promulgated rules, and (3) regulates the time, place, and manner of operation of a marijuana establishment.” The criteria used by a municipality to evaluate an application can consider whether the applicant will be able to conform to the local time, place, and manner regulations. Moreover, if those regulations do not impose unreasonable, impracticable requirements or conflict with State law, then the use of criteria that reflect those local concerns is permissible.

As for the Open Meetings Act (OMA), Plaintiffs also alleged that the scoring of the applications by the City manager violated the OMA because it was not done in a public forum. In reversing the trial court and ruling for the City, the court explains that the City did not create a “Scoring Committee.” Instead, the City’s ordinance stated that the City manager would review the applications, but the applications were sent to City council for the ultimate approval. Despite the City manager being aided by other officials and staff, there was no delegation of decision-making duties.

There was no impermissible delegation of authority to the City manager because the ordinance commanded the City manager to review the applications and send them to City council. Accordingly, the City manager reviewing the applications does not involve the work of a “public body” for the purposes of the OMA because “an individual person is not included in the definition of a public body for the purposes of the OMA.” See MCL 15.262(a). Thus, the City manager’s review of the applications was not required to be conducted in a public hearing. The ultimate decision on which applications were approved was made by the City council in accordance with the OMA.

As the court notes, this reading of the OMA is consistent with Pinebrook Warren, LLC v City of Warren, which was addressed in our December E-Letter. In Pinebrook, the Michigan Court of Appeals held that the use of a review committee to evaluate applications for medical-marijuana licenses was not subject to the OMA because the ordinance at issue merely allowed for an advisory board to assist the City council.

In conclusion, the Court of Appeals held that competitive review procedures can consider criteria that include concerns specific to that community, including green infrastructure, sustainability, aesthetics, and economic goals. In fact, the court states that local regulations on marihuana facilities will be permissible if the regulation: “(1) is not unreasonably impracticable, (2) does not directly conflict with the MRTMA or promulgated rules, and (3) regulates the time, place, and manner of operation of a marijuana establishment.” Finally, because an individual person is not a public body under the OMA, the City manager’s review of the marihuana permit applications was not subject to the requirements in the OMA. City council has the final decision-making authority, and it reviewed the applications and awarded marihuana permits in compliance with the OMA. Yellow Tail Ventures Inc v City of Berkley, Michigan Court of Appeals (2022).

CONCLUSION

It is important to have robust and well-defined ordinance provisions. A clear and comprehensive ordinance will provide the Township’s first line of defense against possible challenges to Township decisions. If a court does find that an ordinance provision is ambiguous, the Township’s historical interpretation of the provision may control the court’s decision, which emphasizes the importance of maintaining a consistent, favorable, and reasonable historical interpretation of ordinance provisions. Finally, the interaction between State law and local law can be tricky, however, the court continues to offer guidance. It is important to stay up to date on recent developments in Michigan law and consider how those changes may impact your municipality.

By Christopher S. Patterson

This publication is intended for educational purposes only. This communication highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.