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Black Earth Meat Market LLC. v. Village of Black Earth

United States Court of Appeals, Seventh Circuit

August 24, 2016

Black Earth Meat Market, LLC, et al., Plaintiffs-Appellants,
v.
Village of Black Earth, et al., Defendants-Appellees.

          Argued June 1, 2016

         Appeal from the United States District Court for the Western District of Wisconsin. No. 3:14-cv-00674-bbc- Barbara B. Crabb, Judge.

          Before Wood, Chief Judge, and Bauer and Flaum, Circuit Judges.

          WOOD, Chief Judge.

         Roughly 90 miles west of Milwaukee lies the small town of Black Earth, Wisconsin. For years, a butcher shop operated on the plot located at 1345 Mills Street. While the property is not zoned for slaughtering livestock, the activity had long been permitted as a legal nonconforming use. In 2001, Black Earth Meats (BEM) purchased the property. Sometime after 2009, the volume and frequency of slaughter increased. By 2011, neighbors were complaining about increased traffic, delivery trucks blocking the road, livestock noise, foul odors, improper storage of animal parts, and the presence of offal, blood, and animal waste in the streets. Steers escaped from the facility on three occasions; each time, a posse had to hunt the fugitive bovine through the streets of Black Earth and, ultimately, shoot it dead.

         In 2013, the Village trustees decided to do something about the renegade slaughterhouse. It increased enforcement of Village regulations, ordered BEM to propose an acceptable plan for relocating its slaughter activities, held several public meetings, and in July 2014, threatened litigation. As a result of the Village's threat of litigation, the U.S. Department of Agriculture (USDA) refused to guarantee a loan to BEM from the Bank of New Glarus. Shortly afterwards, BEM lost its financing, closed, and then sued the Village and the members of its Board. The district court granted summary judgment to the defendants. BEM appeals, and we affirm.

         I

         In 2001, Black Earth Meats purchased the property located at 1345 Mills Street, in the Village of Black Earth, Wisconsin. For the previous 60 years, the plot had been used as a slaughterhouse and retail butcher shop. While the land was zoned as "B-l General Commercial"-a designation that did not allow the operation of a slaughterhouse-BEM's slaughtering operation constituted a legal nonconforming use and thus was permitted under the zoning law in effect at the time. BEM's current owner, Kemper Durand, Jr., acquired the company and property in 2008.

         About a year after Durand acquired the property, the slaughter operations increased in both volume and frequency. This led to a crescendo in complaints from the neighbors. In response to these complaints, the Village hired Vierbicher Associates, an engineering and land-use consulting firm, to investigate and report on the effects of the BEM facility. Vierbicher delivered its report to the Village on January 27, 2011. The report found that BEM's slaughter operation was responsible for "[i]ncreased truck traffic on local residential streets"; "[i]ncreased noise due to trucks and slaughter operations on the premises"; "[o]ffal runoff from the property that goes into storm sewers and adjacent properties"; "[f]lies and other vermin due to offal runoff and outdoor storage of animal waste that is not promptly removed from the property"; and "[a]nimals escaping from the property." The report concluded that BEM could "continue operation in its current location, but must do so within the constraints of Village ordinances. If further complaints are made to the Village and found to be of merit, abatement actions and/or fines may be in order."

         Neighbors continued in 2012 to lodge the same kinds of complaints about the effects of BEM's slaughterhouse operations. And their complaints were heard: the Village President, Patrick Troge, wrote a letter to BEM warning that if the problems continued, the Village would take action, potentially including a nuisance abatement action or fines.

         On May 2, 2012, a Red Angus steer escaped from BEM and was pursued by 12 BEM employees, one of them armed with a rifle, through the village. Three Dane County deputies eventually arrived on scene and cornered the animal. The showdown ended in a hail of gunfire; after the deputies pumped six shotgun slugs, seven rounds from an M16, and three .22 rifle rounds into the steer, it fell dead in the streets of Black Earth. This was not the first renegade beast cut down in the Village: steers had escaped from BEM on two previous occasions since 2009. Each fugitive had occasioned a similar response, and met a similar end.

         In the meantime, Durand was looking for new financing for BEM's operations. In 2013, after a search lasting more than a year, Durand approached the Bank of New Glarus. New Glarus agreed to loan BEM approximately $1.3 million. But the loan came with strings: BEM was required to raise $525, 000 on its own, and to obtain a loan guarantee from the USDA's Office of Rural Development. The USDA guarantee would cover 80 percent of the loan amount. While he initially opposed the loan guarantee condition, Durand eventually acquiesced; he finalized the loan agreement in August 2013. The USDA provided New Glarus with a "conditional commitment, " which would convert into the required loan guarantee upon the meeting of certain prerequisites. One of those prerequisites was a certification that there were "[n]o ... suits ... pending or threatened that would adversely affect the collateral when the security instruments are filed." Similarly, BEM was required to certify that "there are no actions, suits or proceedings pending or, to the knowledge of the [B]or-rower/guarantors, threatened against the Borrower/guarantors that may result in any material adverse change in the business operations ... of the Borrower/guarantors."

         The complaints about BEM continued unabated throughout 2013. (Over the course of the year, BEM was the cause of 40 requests for police service.) On July 10, 2013, the Village trustees met with the Village's attorney to discuss BEM's ordinance violations and potential zoning issues. At first, the trustees considered drafting or amending ordinances specifically addressed at BEM. They ultimately rejected this course of action out of concern about the propriety of addressing ordinances toward one specific business. Instead, they decided that the Village should do more to enforce the already-existing ordinances they believed BEM was violating. At the Village police committee meeting the following week, the trustees delivered their message to local law enforcement officials.

         As a result of the increased enforcement, BEM received nine citations between October 1, 2013, and January 3, 2014. The citations had no effect on BEM's behavior, however, and the complaints continued. On December 10, 2013, the Village Board held a public meeting "regarding nuisance and zoning violations associated with Black Earth Meats." The agenda included time for remarks by law enforcement, the Village's building inspector, a BEM representative, and the public. The agenda also advised that the trustees would discuss and vote on a "strategy to be adopted by the [Village] with respect to litigation in which it is or likely to become involved regarding [BEM]." Notice of the meeting was published. Durand spoke on behalf of BEM. At the conclusion of the meeting, the trustees passed a motion giving BEM 120 days to present an acceptable plan for relocating its slaughter operation. If BEM failed to meet that deadline, it said, the Village would "take legal action to remove the slaughter operation."

         Troge sent the promised notice to BEM the following day. His letter noted that BEM's slaughter operation had "increased to such a degree that it is now a much more intensive commercial slaughtering operation" and had become a "nuisance." It directed BEM to relocate within a reasonable period and advised that if BEM failed to present an acceptable plan for doing so within 120 days, the Village "intend[ed] to commence ...


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