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Throughout the last year, appellate courts at the state level have issued 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 them all. Instead, we have curated a list that includes five cases demonstrating everything from a rehash of foundational principles of making bulletproof zoning decisions to the changed application of the Open Meetings Act to require open meetings for essentially any committees performing governmental functions for municipalities.  The cases addressed in this E-Letter highlight the importance of establishing when ordinances are non-zoning versus zoning, greater risks for private property owner disputes to pursue alleged zoning ordinance violations in court, and the importance of zoning bodies to identify specific information that does not support approval of a zoning request. This E-Letter explores those topics in-depth and provides practical takeaways for municipal officials and consultants to consider.

The Michigan Court of Appeals Reaffirms that Planning Commission Denials Must Include Factual Findings and Conclusions Supporting the Final Decision

Many zoned townships in Michigan rely upon zoning ordinances that divide up the Township into zoning districts and list uses that are permitted by right and by special use (sometimes referred to as conditional use) within each zoning district. Generally, special uses are treated with a similar process wherein a list of specific criteria must be considered in determining whether to grant or deny a specific special land use. More than a majority of zoned communities grant such special land uses with the planning commission, but it is certainly not unique to have the planning commission serve as a recommending body. If that is the case, the legislative body will then act as the final decision-maker on special land use requests. Regardless of the unique steps or distinctions between the final decision-maker, a Michigan circuit court made clear in JS Beck Rd LLC v Charter Twp of Northville, 2024 Mich App LEXIS 9219, that planning commissions (as the final decision-maker) are required to adequately articulate the basis for their decision in their minutes or in an issued written decision.

In this case, the plaintiff (Beck) attempted to build and operate a childcare and education facility near an intersection in Charter Township of Northville, Michigan. The site was zoned for single-family residential homes, and the intersection was known to be “one of the busier intersections.”

The Township of Northville Ordinance provides the six criteria that are considered for granting a special land use. Beck submitted an application that included multiple iterations of development site plans, a traffic impact study that indicated the intersection after development would “remain acceptable” with traffic signal guidance during rush hour, and an agreement from Wayne County to assist with traffic signal manipulation to reduce traffic. Beck’s representatives also attended the planning commission’s public hearings on the application to advocate for its approval. In contrast, the Township Planner attended the hearing to advocate against the development.

Ultimately, the planning commission denied Beck’s special land use application, and individual members expressed concerns regarding incompatibility with adjacent land uses, the master plan, and adversely impacted traffic. None of the individual members submitted findings or conclusions to represent the degree of which Beck’s application complied with standards for a special land use. Further, the planning commission never incorporated the concerns in a statement of findings or conclusions that stated the basis for Beck’s denial.

Beck appealed. On appeal, zoning decisions are reviewed for two core requirements: (1) did the decision comport with law; and (2) was the decision supported by competent, material, and substantial evidence. The courts have explained that the amount of evidence is less than a preponderance (meaning more likely than not), but must be more than a scintilla of evidence. Substantial evidence is evidence “a reasonable mind would accept as adequate to support a decision.” Furthermore, when there is substantial evidence, the court must not replace its discretion with that of the administrative tribunal.

The Township argued that the planning commission adequately supported its denial with detailed findings and conclusions based primarily on the development’s incompatibility with adjacent land uses, incompatibility with the master plan, and adverse impact on traffic. The circuit court vacated the planning commission’s denial of Beck’s special land use application and focused on whether there was competent, material, and substantial evidence. The circuit court reasoned that special land uses are to overcome adjacent uses, and found it was “inadequate to conclude the decision was supported by competent, material, and substantial evidence under MCL 125.3606.” In fact, both reviewing courts noted that MCL 125.3502(4) was specific in requiring that decisions on special land use “shall be incorporated in a statement of findings and conclusions relative to the special land use which specifies the basis for the decision.”

The Township then appealed, and the Court of Appeals rejected its arguments. The Court of Appeals, relying on a similar decision it issued just five months previously (Lakeview Vineyards, LLC v Oronoko Charter Township, 2024 Mich App LEXIS 4581), found fault in the failure to identify findings or conclusions specifying the basis for its special land use decision. The court noted that it failed to incorporate individual member concerns or findings in any detail that provided the basis of the denial. This failure to provide an adequate basis did not comply with the MZEA. As a result, the Commission’s decision was vacated, and the court remanded for the Commission to provide its findings and conclusions regarding the application in compliance with the MZEA and local ordinance.

There are several practical takeaways from this decision. The final decision-maker on a special land use must issue detailed statements of findings and conclusions when granting, granting with conditions, or denying special land use applications. Although it is tedious and certainly an additional effort for zoning staff and the planning commissioners (or legislative body), it is important to complete this necessary step. The court even noted that recording individual concerns prior to a final decision was not sufficient.

For special land use decisions, the planning commissioners are guided by the criteria. They therefore should specify which criteria are not met and how with reference to specific ordinance requirements. The same would be true for an approval or approval with conditions. When considering conditions, it can often be appropriate to further articulate the basis supporting each condition.

In JS Beck Rd LLC, and appropriately so, the court did not reverse and then approve of the use. Instead, the court properly remanded the case back to the planning commission. When remanded, planning commissioners should consult with their legal counsel and experts, as well as properly document their decision process and whether a new hearing will be held and new evidence received should be considered early after the remand.

Michigan Supreme Court’s Decision in Saugatuck Dunes Coastal Alliance Continues to Impact Standing to Appeal Zoning Decisions

Three years ago in Saugatuck Dunes Coastal Alliance, the Michigan Supreme Court visited the test that determines who is allowed to challenge zoning decisions. Certainly, no one takes issue when the applicant appeals after a denial or allegedly imposed improper zoning condition. But, other parties, whether independent neighbors or organized interest groups, routinely participate in an appeal after an applicant has been granted a zoning approval. As a result, the Supreme Court analyzed the standard for determining how these other parties can challenge zoning decisions under the “aggrieved party” standard set forth in the Michigan Zoning Enabling Act (“MZEA”). This same term is typically restated in most, if not all, local zoning ordinances. Based on the Court’s review of the statutes and other available authority, the court held that to be a “party aggrieved” under MCL 125.3605 and MCL 125.3606, the appealing party must meet three criteria.

First, the party must have participated in the challenged proceedings by taking a position on the contested decision, such as through a letter or oral public comment. Second, the party must claim some legally protected interest or protected personal, pecuniary, or property right that is likely to be affected by the challenged decision. Third, the party must provide some evidence of special damages arising from the challenged decision in the form of an actual or likely injury to or burden on their asserted interest or right that is different in kind or more significant in degree than the effects on others in the local community.

Last summer, the Michigan Court of Appeals revisited this new standard, but with an interesting twist. Beverly Hills Racquet & Health Club, Ltd v Vill of Beverly Hills Zoning Bd of Appeals, 2024 Mich App LEXIS 5048. The appealing party operated a longstanding racquet and health club that offered child daycare to its members. The service had become a key to the club’s success through the pandemic. According to the record, no other child daycare facility existed in the Village of Beverly Hills until the Village provided zoning approvals that would allow a mixed-use retail space and childcare facility to proceed forward. The club argued that it had a right to appeal the approval because it had economic interests in the decision and the approval increased competition in the allegedly same market of child daycare, which could negatively impact the club.

The court turned to the third standard and focused on whether the club had special damages that were different in kind or more significant in degree than the effects on others in the local community. Factors that are relevant when determining special damages include the following: a) the type and scope of the proposed, approved, or denied change; b) the nature and importance of the protected right or interest that is asserted; c) the immediacy and degree of the alleged injury or burden, and its connection to the challenged decision as compared to others in the local community; d) if the party is a real-property owner or lessee, the proximity of the property to the site of the proposed development or approval, and the nature and degree of the alleged effect on the real property.

In a surprising twist, the court found that economic interests/harm may constitute “special damages” sufficient to form the basis of standing. The record indicated that the economic harm was only potential at the time of the zoning process, but the court was not deterred from finding standing existed. The court noted a recent order by the Michigan Supreme Court in Tuscola Area Airport Auth v Mich Aeronautics Comm’n, 511 Mich 1024 (2023), where potential economic harm was recognized in an airport zoning board of appeals decision.

As a result, municipalities should expect that individuals and interest groups are going to actively participate in zoning processes to ensure they satisfy the requirements under Saugatuck Dunes Coastal Alliance. This case further suggests that the zoning boards should not be surprised when they receive additional information about harms and injuries that are incurred by those individuals and interest groups as result of an approval so as to build a record related to standing before the ZBA.

Due to this evolving standard, ambiguity remains as to when a party has standing to appeal a zoning decision. The court here noted it should be a low threshold. As a result, municipalities should always carefully consider and discuss when an appeal is filed whether there are any standing issues. If standing is challenged and the municipality succeeds, the case will be dismissed in the early stages of the process. This is particularly true as courts are now opening the door to economic harms being included as a basis for standing.

Courts Expand Ability for Private Neighbor Disputes to Sidestep Municipal Enforcement Process and Seek Private Enforcement of Local Ordinances

Neighbor disputes are not uncommon or new. Neither are telephone calls and complaints to the municipality to enforce such ordinances against neighbors. Municipalities are often complaint-driven, and thus in those circumstances, the complaints are investigated and there is a determination of whether formal action will be taken. Municipalities can exercise their discretion on whether enforcement is appropriate, which can stem from the municipality taking less aggressive approaches to obtain compliance, legal defenses that may exist, concerns over costs, or even municipal interests in future amendments to their ordinances that may cure a complaint or compliance. Even so, private individuals can file nuisance claims in a court of law based on violations of ordinances—particularly zoning ordinances which are statutorily identified as a nuisance per se. This means that if the violation of the ordinance is established then the elements of a nuisance per se have been met and a remedy could be awarded.

As discussed above with the standing threshold for zoning decision appeals, standing similarly applies in these cases, and has been of recent focus for the Court of Appeals. The Court of Appeals addressed this separate standard for standing in nuisance claims involving two parties with a long litigative history. Defendant, Ashkay Island, LLC (“Ashkay”) owns an island, located within Iron Mill Pond in Manchester Township. The plaintiff is a resident who owns multiple parcels that also abut Iron Mill Pond. The island is located approximately 560 feet from the parcel owned by plaintiff, which is also plaintiff’s primary residence. Pigeon v Ashkay Island, LLC, 2024 Mich App LEXIS 9157.

Plaintiff filed a complaint claiming that Ashkay’s use of the island violated the local zoning ordinance, constituted a nuisance per se, and that Ashkay’s use and development of the property on the island constituted a private nuisance. The trial court dismissed the case on the basis that the plaintiff lacked standing to assert the claims. The court reasoned that the plaintiff did not suffer any specific harm or injury that was distinct from the harm or injury suffered by the general public. Plaintiff only stated concerns, fears, and worries of something that could happen, and did not articulate that he suffered actual harm. The court also stated that plaintiff could have raised these claims in a prior case. Plaintiff appealed.

The Court of Appeals reversed the trial court, finding that plaintiff did have standing.

The court held that plaintiff owns property within the same zoning district that Ashkay’s structures are located, which gives him a legal cause of action, and standing to bring an action to abate the alleged nuisance. Furthermore, plaintiff offered evidence that the use posed a significant fire risk of wildfires, the septic system being used was inadequate, and the island lacked sufficient access in light of the activities conducted on the island. The court found this sufficient to establish standing to bring nuisance claims.

The court noted in its decision language within the local zoning ordinance that also deferred causes of actions for violations of the ordinance to property owners within the township. As a result, zoning ordinances should be reviewed to determine whether the municipality wants to identify if causes of actions may be brought to enforce the ordinance, if the Township chooses not to do so. This is particularly valuable to consider in light of the court identifying that special damages sufficient to allow suits include environmental and safety concerns that formed the basis of plaintiff’s claim here. Property owners may find it valuable to be able to bring such claims, but municipalities will also have to determine the extent to which their ordinances will be litigated, including their meaning and enforceability, and the municipalities need not be a party to such suits (nor even potentially have notice of such suits).

Marijuana Licensing Procedures Post-Initiated Ordinance: Municipal Discretion in Application Scoring is Upheld

This case was taken up by the Court of Appeals and consolidates five appeals cases where the parties were marijuana provisioning and retail centers that were denied licenses by the City of Port Huron.

In 2020, voters in Port Huron approved a ballot initiative (the “Ordinance”) that provided Port Huron with a scheme to consider and award licenses to marijuana retailers, provisioning centers, and designated consumption establishments in compliance with the Michigan Regulation and Taxation of Marihuana Act (“MRTMA”) and the Medical Marihuana Facilities Licensing Act (“MMFLA”). Under the Ordinance, seven licenses could be granted to marijuana retailers, as well as several additional licenses to provisioning centers, and designated consumption establishments. Five establishments received various licenses, one establishment was Portage Acquisitions, Inc. (“Portage”), but since the number of applicants was greater than the number of available licenses the appellants were not granted licenses through the competitive scheme laid out within the Ordinance. As a result of the license denial, the licensees sued Port Huron.

Port Huron moved for summary disposition of all the appellants’ claims that challenged the ordinance and the application process. Ultimately, the trial court granted the motions for summary disposition, and ruled that the ordinance was consistent with state law. The Court of Appeals first addressed the arguments that the trial court erred by granting summary disposition because the Ordinance is a regulatory ordinance, not a zoning ordinance, which cannot be enacted by initiative, and must be enacted by the ordinance municipal legislative process. The court’s analysis began by reemphasizing that “[a]n initiative that purports to enact or amend a zoning ordinance is valid unless it complied with the procedural requirements found in the Michigan Zoning Enabling Act (MZEA).” The MZEA requires that property owners are afforded the opportunity to file written objections to proposed zoning ordinances, therefore, zoning ordinances that are enacted by way of initiative are invalid.

Port Huron’s Ordinance provided that “provisions of this article are regulatory in nature and not intended to be interpreted as zoning laws.” Further, Port Huron’s Ordinance contains a separate section (Chapter 52) where Zoning provisions are found. The court confirmed that an ordinance enacted by ballot initiative is legitimate and distinct from a zoning ordinance so long as it regulates operations rather than land use. The distinction between zoning and regulatory ordinances cannot be based solely on promoting public good since both may serve this purpose. Instead, non-zoning ordinances focus on “how” an activity takes place rather than “where,” while zoning ordinances primarily control location. For the above-mentioned reasons, the court held that the ordinance at issue is regulatory, and not zoning.

The Court of Appeals further made clear that the applicants had no due-process property right to have a properly scored application. The court reasoned that a license does not convey property rights under Michigan law and that a property right must be based on more than an expectation. Additionally, the court reiterated that procedural protection of the Due Process Clause does not apply in determining whether to issue a license or permit. The court is only to reverse the legislative body’s decision for first-time applicants in the extremely limited instance of whether the city has acted arbitrarily and capriciously. Here, the court held that Port Huron did not act arbitrarily and capriciously.

This case confirms a strong deference to municipalities providing for competitive review under MRTMA. It further exemplifies the potential litigation risk of those applicants who are not awarded licenses. Accordingly, it is important to first analyze whether an initiated ordinance contains zoning measures. When evaluating whether an ordinance is regulatory versus zoning in nature, focus on whether it primarily controls where a use occurs (zoning) or how it operates (regulatory).

Moreover, the ordinance itself will be subject to scrutiny. Thus, it is important to ensure the definitions within the ordinance are clear. Any interpretative disagreement over a term or standards can lead to disputes. This can be further handled by accepting questions throughout the process and providing answers to all applicants, allowing for some guidance or feedback on how the governing board will be applying a specific term or standard, and also developing a robust record during the review of such licenses. Last, it is important there is sufficient documentation that forms the basis of the competitive review to allow a reviewing court sufficient documentation to find the ultimate decision was not arbitrary or capricious.

Committees of Municipal Bodies Face New Rules under Michigan Supreme Court

The Michigan Supreme Court recently issued an important ruling in Pinebrook Warren, LLC v City of Warren, 2024 Mich LEXIS 1455 addressing whether a local marijuana review committee constitutes a “public body” subject to the Open Meetings Act (“OMA”). This decision has significant implications for municipalities that utilize committees, subcommittees, or advisory bodies in their governmental processes.

In 2019, the Warren City Council adopted an ordinance to regulate medical marijuana provisioning center licenses. The ordinance created a Medical Marihuana Review Committee (“Review Committee”) to evaluate applications. The Review Committee—composed of the city attorney (or designee), the director of public service (or designee), and three city council members—reviewed 65 applications, conducted interviews, scored applications on a scale of 0-10 based on 17 factors, and ranked the applicants.

The Review Committee forwarded its scores and rankings to the city council, which then approved and issued licenses to the top 15 ranked entities as scored by the Review Committee without any substantive discussion of the rankings or consideration of other applicants. Plaintiffs, who were denied licenses, sued alleged the Review Committee had violated the OMA by conducting most of its meetings in private.

The Michigan Supreme Court held that the Review Committee was a public body subject to the OMA. The biggest shift was the court’s position that courts will now examine both the language of the enabling action, which could be a motion, policy, ordinance, or statute and the actions taken by the established committee. In the latter portion of the new test, if a committee makes public policy decisions that would otherwise have had to be made by the original public body, then the committee is also a public body covered by the OMA. There is some confusion in the court’s proposed application, however, as even in the case at hand the Committee provided a recommendation, and the Council made the final decision. The court’s review went beyond the fact that the committee provided a stated recommendation to discern whether the Council made any deliberation or changes to such recommendation.

This raises a new issue as to how much deliberation, or changes to a recommendation are necessary to avoid running afoul of this test. This is going to raise questions in its application because the previous bright-line rule of knowing when sub quorum committees were lawful and need not comply with the OMA is less than clear. Following this rule, trial courts will be left searching through various spurious factual claims to determine if a committee’s actions were those that otherwise should have been made by the full board. It is unfortunate in an area where municipalities are already subject to various suits due to confusion created in more recent amendments to the OMA that the Supreme Court’s new decision muddies the waters for municipal committees.

Municipalities should evaluate their current committees and further be prudent in establishing any new committees. The court emphasized that what matters is not just what the authorizing directive states a committee can do, such as being a recommending body, but what the committee actually does in practice. If a committee effectively makes the decisions that the full body would otherwise make, it likely must comply with the OMA. Even if a committee only makes “recommendations,” if those recommendations are routinely adopted without independent review or meaningful discussion by the full body, municipalities should consult with counsel as to whether the committee is functioning as a de facto decision-maker subject to the OMA.

And most importantly, one can always err on the side of caution and comply with the OMA—especially for committees involved in governmental functions like licensing, zoning, or other decision-making processes. Thus, if able, committees that can freely comply with the OMA’s notice, public attendance, and minutes requirements so as to safeguard against any potential adverse ruling should do so in the coming years until this new test is applied in the lower courts (or even revisited by the Supreme Court).

Conclusion

Recent court decisions demonstrate the evolving landscape of local government law in Michigan. From reinforcing the need for detailed findings in special land use decisions to expanding the definition of “public body” under the Open Meetings Act, courts continue to shape how municipalities must operate. The standing threshold for zoning appeals has been clarified, neighbor disputes increasingly bypass municipal enforcement through private actions, and marijuana licensing procedures face continued scrutiny.

These cases underscore several important principles for officials and staff: (1) document decision-making processes thoroughly with specific findings tied to ordinance criteria; (2) anticipate broader standing for appeals and private enforcement actions; (3) clearly distinguish between regulatory and zoning ordinances; (4) maintain robust documentation of competitive review processes; and (5) evaluate committee structures and operations to ensure OMA compliance where needed. It is important to stay up to date on recent developments in Michigan law and consider how those changes may impact the local law in 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.