On October 13, 2021, the United States Court of Appeals for the Sixth Circuit issued an Opinion in the matter of F.P. Development, LLC v. Charter Township of Canton, Michigan, 16 F.4th 198 (2021). In F.P. Development, the Court analyzed a tree ordinance that was passed by the Charter Township of Canton (“Canton”) in 2016 which prohibited the removal of certain trees on private property without a permit. The tree ordinance also required “mitigation” of removed trees by requiring property owners to plant new trees or pay money to Canton so that Canton could replace the trees on a different property (the “tree ordinance”).
In 2017, F.P. Development, LLC (“F.P.”) began clearing trees on land that it owned in Canton without obtaining the permit required by the . When Canton learned of the trees being removed from F.P.’s property without application being made for a permit, Canton issued a “Stop Work” order and a “Notice of Violation.” After investigation to identify how many trees were cut down, Canton demanded that F.P. either plant 187 new trees or make a payment to Canton’s tree replacement fund in the amount of $47,898.
F.P. refused to pay or plant new trees and instead filed a lawsuit against Canton in Federal Court in the United States District Court for the Eastern District of Michigan. The lawsuit sought declaratory and injunctive relief and argued that Canton’s tree ordinance constituted an unconstitutional taking, in violation of the Fifth and Fourteenth Amendments, an unreasonable seizure, in violation of the Fourth and Fourteenth Amendments, and an excessive fine, in violation of the Eighth and Fourteenth Amendments. Canton filed a counterclaim seeking $47,898 in damages against F.P. for violating the tree ordinance.
The District Court ruled in favor of F.P. on its Fifth Amendment claim and held that Canton’s tree ordinance was unconstitutional as a regulatory taking and as an unconstitutional condition. The Takings Clause of the United States Constitution states that “private property” shall not “be taken for public use, without just compensation.” F.P. argued that Canton’s tree ordinance placed an unconstitutional condition on its Fifth Amendment rights by coercing it into giving up its right to just compensation for Canton’s taking of trees in exchange for a permit.
In analyzing this claim, the Sixth Circuit Court of Appeals examined the United States Supreme Court case of Dolan v. City of Tigard, 512 U.S. 374 (1994). In Dolan, the United States Supreme Court held that “it must be determined whether an ‘essential nexus’ exists between a legitimate state interest and the permit condition” and “If one does, then it must be decided whether the degree of the exactions demanded by the permit conditions bears the required relationship to the projected impact of the proposed development.” In F.P. Development, the parties agreed that there was an “essential nexus” between Canton’s “legitimate” interest in forest and natural resource preservation and the permit conditions. However, the parties disagreed as to the second element set forth in Dolan.
Specifically, the Sixth Circuit Court of Appeals held that Canton pointed to nothing indicating, for example, that F.P.’s tree removal effects a certain level of environmental degradation on the surrounding area. Nor did Canton demonstrate whether it considered that F.P.’s clearing of a clogged ditch on its property or its removal of dead trees may have improved the surrounding environment. For these reasons, the Sixth Circuit Court of Appeals held that Canton’s tree ordinance could not meet the evidentiary bar set for the “rough proportionality” test in Dolan, and therefore the tree ordinance constituted an unconstitutional condition.
The District Court ruled in favor of Canton and dismissed F.P.’s Fourth Amendment claim arguing that the tree ordinance constituted an unreasonable seizure. The Fourth Amendment, as incorporated through the Fourteenth Amendment, preserves the right of the people “to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” F.P. argued that the tree ordinance meaningfully interfered with its possessory interest in its trees and was therefore an unreasonable seizure. Because the tree ordinance did not enable the Charter Township of Canton to take actual possession of the trees, and because F.P. was able to sell its trees to the timber company that removed them, the Sixth Circuit Court of Appeals ruled that F.P. had full control over the trees and Canton therefore did not seize them.
The District Court also ruled in favor of Canton and dismissed F.P.’s Eighth Amendment claim arguing that the tree ordinance constituted an excessive fine. The Excessive Fines Clause of the Eighth Amendment, as applied to localities through the Fourteenth Amendment, dictates that “excessive fines” shall not be “imposed.” F.P. argued that the tree ordinance violated the Excessive Fines Clause because Canton’s demand for payment was a punishment that is grossly disproportionate to F.P.’s tree removal. The Sixth Circuit Court of Appeals held that because the tree ordinance was designed to remedy the harm that removing trees causes, and it purports to estimate the monetary demands it makes based on the cost it expects to incur replacing them, the purpose of the fine is remedial, not punitive, so it does not implicate the Eighth Amendment.
The F.P. Development case is important for several reasons, as it demonstrates that property owners are not necessarily always subject to ordinances, or specifically tree ordinances, adopted by a municipality. While property owners are generally subject to ordinances, there are limits to what type of restrictions or obligations municipalities can enforce in their ordinances. Although property owners must be aware of requirements and regulations related to tree removal imposed by the local municipality, it is worth remembering that a tree ordinance may be subject to challenge. This holds true regardless of whether or not tree removal is at issue since the same reasoning used by the Court in F.P. Development could potentially apply to different issues that may arise throughout the course of development or construction, such as removal or displacement of wildlife on a property.
Because issues related to tree removal often arise throughout the process of development, zoning restrictions and ordinances must always be carefully reviewed. These ordinances must be investigated not only prior to closing on the purchase of real estate during the due diligence and inspection period, but also at the time of proposed development or construction as ordinances and zoning may change over time.
Brandan A. Hallaq is a Senior Attorney with Hirzel Law, PLC where he litigates cases involving defective construction, contract disputes, shareholder/member disputes, quiet title actions to determine interests in property, enforcement of restrictive covenants, real estate foreclosure actions, and bankruptcy matters representing creditors. Mr. Hallaq is also a licensed Real Estate Broker in the State of Michigan and leads the real estate transactions department at Hirzel Law, PLC where he negotiates and prepares the necessary documents for business and real estate transactions, including purchase agreements, franchise agreements, loan/financing documents, and commercial and residential leases and mortgages. In each year from 2018 through 2022, he has been recognized as a Rising Star in the area of real estate law by Super Lawyers Magazine, a designation that is given to no more than 2.5% of the attorneys in the State of Michigan each year. He was also recognized as a 2020 Up & Coming Lawyer by Michigan Lawyer’s Weekly, an award given to no more than 30 attorneys in the state each year, and he has been recognized by Best Lawyers in America: “Ones to Watch” list for professional excellence in real estate law each year from 2021-2023. Mr. Hallaq obtained his Juris Doctor degree, cum laude, from Wayne State University Law School where he served as an editor on the Wayne Law Review. Prior to joining Hirzel Law, PLC, Mr. Hallaq worked for a Federal Judge and in a Fortune 500 corporation’s in-house legal department. He can be reached at (248) 480-8704 or at firstname.lastname@example.org.