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John C. & Maureen G. Osborne Revocable Family Trust v. Town of Beach

United States District Court, N.D. Indiana, South Bend Division

March 26, 2018

TOWN OF LONG BEACH, INDIANA, et al., Defendants.



         This action arises out of three homeowners' attempts to build seawalls on their properties abutting Lake Michigan in the Town of Long Beach, Indiana. The homeowners applied for a zoning variance, which they eventually received over some public opposition, after which they received building permits to construct the seawalls. Around the same time, however, a new set of officials was elected to the local government, having run on a platform of protecting the beach and opposing seawalls and building projects on the lakeshore. Challenges were then filed to the issuance of the building permits, resulting in stop-work orders and eventually decisions revoking the permits. The homeowners allege that this process was a coordinated effort among the new office-holders, their appointees, and a local interest group that shared their opposition to beachfront building projects-the Long Beach Community Alliance-all aimed at obstructing the homeowners' ability to build the seawalls.

         Undeterred, the homeowners turned to state court. They first sued to bar the then-ongoing challenges to their permits. Once the building permits were finally revoked, the homeowners sued again, seeking judicial review of those decisions. While those two proceedings were pending, the homeowners filed this action in federal court. Their complaint spans sixty-five pages and asserts thirteen counts against twenty-one defendants, including Long Beach and various of its subunits; thirteen individuals with roles in the local government, each in their individual and official capacities; the town's attorney; and two members of the Long Beach Community Alliance. The complaint asserts substantive due process, procedural due process, and equal protection claims under federal law. It asserts several claims under state law as well.

         The defendants, appearing in three separate groups, have all moved to dismiss. They assert a litany of arguments in support of dismissing the various claims. For the reasons that follow, the Court finds that the homeowners have not pled a violation of any federally protected rights. Federal courts are not boards of zoning appeals, and constitutional claims arising out of zoning matters are quite narrow. The homeowners may or may not be right that they are entitled under state law to their building permits, and they may yet receive them-the state court has remanded the matters to the Board of Zoning Appeals for further proceedings-but they are not entitled to any relief as a matter of federal law. Accordingly, the Court dismisses the federal claims and relinquishes supplemental jurisdiction over the state claims.


         The Plaintiffs are three sets of owners of properties along Lake Michigan in Long Beach, Indiana. Due to erosion and storm damage, the Plaintiffs' underground septic systems became at risk of being breached and discharging their contents onto the beach and into the lake. The Plaintiffs thus wished to build seawalls along the beach to protect their properties. A local zoning ordinance prohibited any construction more than 106.6 feet north of the road, but the seawalls would need to be built past that, so the Plaintiffs each sought variances from that ordinance. [DE 5-1, -2, -3].

         A number of hearings were held on those petitions before the Board of Zoning Appeals. The petitions “generated a large number of written and oral objections by various groups and individuals who repeatedly expressed their oppositions to any type of construction activity on or near the beach area adjoining Lake Michigan.” [DE 5 ¶ 47]. One of those groups was the Long Beach Community Alliance, a local organization that opposed building on the beachfront lots. Despite the opposition, on December 8, 2015, the Board of Zoning Appeals approved the variances. On December 30, 2015, the building commissioner issued building permits for each of the seawalls, and the Plaintiffs promptly began construction.

         Around this same time, a local election was held that significantly changed the composition of the local government. A slate of candidates running as the Long Beach Party sought to appeal to voters “[c]oncerned with losing [their] right to enjoy the beach” and “[u]pset with the seawalls, septic systems and size of some newly built homes being permitted along the lake.” [DE 5 ¶ 70]. They promised in their campaign flyers to “[p]rotect the enjoyment of Lake Michigan's shores for ALL residents” and to “[e]nsure uniform and responsible enforcement of Town ordinances, including building codes.” Id. Those candidates were supported by the Long Beach Community Alliance. Ultimately, those candidates won all five seats of the Long Beach Town Council in the November 2015 election. Once they took office on January 1, 2016, they named new members to various municipal bodies, including the Advisory Plan Commission, the Building Commission, and the Board of Zoning Appeals.

         By that time, the Plaintiffs' variances had already been granted and their building permits had already been issued. The new town officials and their supporters were still intent on preventing the construction of the Plaintiffs' seawalls, though. Rather than seeking judicial review of the Board of Zoning Appeals' final decisions granting the variances, they decided to file administrative appeals of the permits issued by the building commissioner, as those appeals would then be heard before the newly constituted Board of Zoning Appeals. The Long Beach Community Alliance filed one set of administrative appeals, and another individual filed another set of appeals. The appeals essentially contended that, while the Plaintiffs received a variance from one particular ordinance, their seawalls failed to comply with a number of other ordinances, so the building permits should be revoked.[1]

         Upon the filing of the appeals on January 25, 2016, the town's attorney directed the building commissioner to issue stop-work orders for each of the seawalls, thus halting their construction. The Plaintiffs immediately filed suit in state court, seeking to preclude the administrative appeals of the building permits. However, the state court refused to enjoin those proceedings, which thus continued before the Board of Zoning Appeals. Four of the five members of that board recused themselves because of their affiliation with the Long Beach Community Alliance, which filed one set of the appeals. Three alternate members were then named to the board. The Plaintiffs allege, however, that those alternates were affiliated with the Long Beach Community Alliance as well, with one of them being a former director of the organization. The Plaintiffs also allege that the individual who recommended those alternates, as well as the members of the Town Council who approved them, were also conflicted due to their affiliation with the Long Beach Community Alliance.

         On March 16, 2016, the building commissioner issued certificates of imminent peril, which rescinded the stop-work orders and allowed the Plaintiffs to resume construction on their seawalls. However, the Building Commission held a meeting and voted to issue new stop-work orders for the seawalls' violation of an ordinance requiring any structures to be set back six feet from the property lines. The Plaintiffs allege that seawalls had never before been interpreted as being subject to that requirement, and that the building commissioner believed that seawalls were not encompassed by that requirement. The Building Commission nonetheless instructed him to issue stop-work orders based on that requirement, which he did.

         Finally, on June 29, 2016, the Board of Zoning Appeals issued final decisions revoking the building permits. The decisions concluded that, in the initial proceedings on the variance requests, the Plaintiffs had only sought and received a variance from a single ordinance. The decisions found that the seawalls failed to comply with two other ordinances, so they revoked each of the building permits. The Plaintiffs responded by filing suit in state court, seeking judicial review of those decisions. They alleged that the administrative proceedings were flawed in multiple respects, that the decisions were substantively erroneous, and that the board was biased against them and conflicted.

         While the state actions were pending, the plaintiffs filed this action in federal court. Their complaint asserts a number of claims under the United States Constitution, as well as several claims under state law. As defendants, they named the Town of Long Beach, in addition to the Town Council, the Advisory Plan Commission, the Building Commission, and the Board of Zoning Appeals. They also named many of the members of those bodies as defendants, in both their official and individual capacities. They also named as defendants the town's attorney, a member of the Long Beach Community Alliance, and one of its attorneys. The Plaintiffs allege that the Defendants are liable either for their own actions, or for their participation in an overall conspiracy that caused the alleged violations.

         The Defendants appeared in three separate groups. They began by each moving to stay this action pending conclusion of the proceedings in state court. They also each moved to dismiss the complaint. In the meantime, the state proceedings reached their conclusions. The state courts dismissed the first action for lack of jurisdiction, as the Plaintiffs had not exhausted their administrative remedies. In the second action, for judicial review of the decisions revoking the building permits, the state court vacated the decisions and remanded the matters to the Board of Zoning Appeals, finding that one of its members should have recused herself due to her prior affiliation with the Long Beach Community Alliance. Once that judgment became final, the Defendants withdrew their motions to stay, and also filed a supplemental motion to dismiss, arguing that this action is now barred by res judicata. The motions to dismiss have each been fully briefed and are ripe for ruling.


         In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6), the Court construes the complaint in the light most favorable to the plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the plaintiff's favor.[2] Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). That statement must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, a plaintiff's claim need only be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Evaluating whether a plaintiff's claim is sufficiently plausible to survive a motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).


         The Defendants have all moved to dismiss the complaint. They first argue that the complaint fails to plead a violation of any federal rights. They also offer various arguments for why certain of the Defendants are not responsible for or are immune to liability for any federal violation. As to the state law claims, they argue that those claims are barred as to certain individual Defendants under various state-law doctrines, among other arguments. In a joint supplemental motion, the Defendants further argue that this action is barred by res judicata now that the Plaintiffs' judicial review action has reached a judgment on the merits.[3]

         The Court only reaches the merits of the federal claims. It is important to note at the outset that federal courts “are not boards of zoning appeals.” River Park, Inc. v. City of Highland Park, 23 F.3d 164, 165 (7th Cir. 1994). The Seventh Circuit has emphasized that principle “time and again.” CEnergy-Glenmore Wind Farm No. 1, LLC v. Town of Glenmore, 769 F.3d 485, 487 (7th Cir. 2014) (collecting cases); see also Harding v. Cty. of Door, 870 F.2d 430, 432 (7th Cir. 1989) (“We conclude by reminding potential litigants that the federal courts are ordinarily not vehicles to review zoning board decisions.”); Coniston Corp. v. Village of Hoffman Estates, 844 F.2d 461, 466-69 (7th Cir. 1988). It has even gone so far as to admonish litigants and their attorneys to review that line of cases before bringing a dispute over a zoning matter to federal court. Harding, 870 F.2d at 432. Naturally, those cases form the centerpiece of the Defendants' briefs. Yet, though the table of authorities in their brief exceeds six pages, the Plaintiffs have avoided so much as even citing to those cases, much less addressing them and explaining why they do not foreclose their claims. Regardless, the arguments the Plaintiffs do offer fail to support the existence of a federal claim. The Court addresses the substantive due process, procedural due process, and equal protection claims in turn, and then addresses its supplemental jurisdiction over the state claims.

         A. Substantive Due Process

         The Plaintiffs first assert substantive due process claims. They assert that the Defendants acted irrationally in objecting to their seawalls, leading to the issuance of stop-work orders and the revocation of their permits; that those proceedings were procedurally improper and should not have been instituted in the first place; and that the Defendants misapplied the ordinances in finding that the seawalls were prohibited.

         For a substantive due process claim, a plaintiff must demonstrate that the challenged conduct “infringes a fundamental liberty interest” or that it is “arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.” Pro-Eco, Inc. v. Bd. of Comm'rs of Jay Cty., Ind., 57 F.3d 505, 514 (7th Cir. 1995). The Plaintiffs do not suggest that any fundamental liberty interests are at stake, [4] so the question is whether the challenged conduct is arbitrary and unreasonable, meaning that it lacks any rational connection to a legitimate government interest. The Seventh Circuit has also described that standard as requiring that the conduct be “invidious or irrational, ” or must “shock the conscience” or be “egregious” in order to implicate substantive due process. CEnergy, 769 F.3d at 488. Government action may be rational “even if it is ‘unwise, improvident, or out of harmony with a particular school of thought.'” Goodpaster v. City of Indianapolis, 736 F.3d 1060, 1071 (7th Cir. 2013) (quoting Eby-Brown Co. v. Wis. Dep't of Ag., 295 F.3d 749, 754 (7th Cir. 2002)).

         In deciding whether governmental action has a rational basis, it is not necessary to determine what actually motivated the challenged action; “‘governmental action passes the rational basis test if a sound reason may be hypothesized.'” Greater Chicago Combine, 431 F.3d at 1071-72; see Goodpaster, 736 F.3d at 1071 (“It is irrelevant whether the reasons given actually motivated the legislature; rather, the question is whether some rational basis exists upon which the legislature could have based the challenged law.”). Thus, even at the pleading stage, claims that depend on the absence of a rational basis ...

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