Seventh Circuit IssuesOpinion in Constitutional Case Arising from Zoning Decision

In CEnergy-Glenmore Wind Farm #1, LLC v. Town of Glenmore, the United States Court of Appeals for the Seventh Circuit demonstrated its hesitance to insert itself into local zoning decisions. Prelude, a company whose assets were later purchased by plaintiff, CEnergy, obtained a conditional use permit to develop a wind farm on property located in the Town of Glenmore. Prelude also had a contract to sell the electricity generated by the turbines to Wisconsin Public Service; however, this contract was contingent upon Prelude obtaining all necessary permits and satisfying other requirements by March 1, 2011. Prelude attempted to submit applications for building permits for each of the wind turbines, but the Town Board refused to consider the applications and requested additional information from Prelude. Prelude provided all of the requested information by December 31, 2010, and also informed the Town Board Chairperson that it needed the permits by March 1, 2011 or the project would no longer be feasible. Prelude sold its assets to CEnergy in December 2010. The Town Board did not take up the building permits at either the January or February 2011 meetings. At its March 7, 2011 meeting, the Board initially voted to grant the permits but after public outcry, accusations and threats, reopened the meeting and rescinded the grant of the permits. Shortly after this decision, the Board held a special meeting and reversed itself again, voting to reinstate the grant of permits. Even before the March 7th vote, however, WPS notified CEnergy that it was backing out of the deal due to CEnergy’s failure to obtain the necessary permits by March 1st.

CEnergy filed suit against the Town claiming the Board deprived it of a property interest without substantive due process by failing to take action on its building permits in a timely manner. The District Court for the Eastern District of Wisconsin granted the Town’s motion to dismiss, finding the Town Board’s decision to delay action on the permits did not “shock the conscience,” and thus did not satisfy the standard for stating a substantive due process claim. The district court also held that because CEnergy failed to pursue available state law remedies relating to the building-permit process, CEnergy did not have a viable substantive due process claim. On appeal, the Seventh Circuit upheld the district court’s decision on similar grounds, beginning its analysis by stating “. . . federal courts, as we have explained time and again, are not zoning boards of appeal.” The court declined to decide whether CEnergy even maintained an identifiable property interest in the building permits, finding this determination unnecessary. The court explained that popular opposition to a proposed land development is a rational and legitimate basis for delaying action on building permits, and thus the Board’s decision to delay action on CEnergy’s permits did not “shock the conscience” so as to evidence a substantive due process violation. Further, the court identified the numerous state law mechanisms available to CEnergy to pursue the building permits, including a writ of mandamus or appeal to the Town Board of Appeals, none of which CEnergy chose to pursue. Because CEnergy instead chose to rely upon the political process of seeking Board approval, it must live with its choice, which in this case was a permit decision outside the timeline it preferred.

Even in its tone, this case demonstrates the federal court’s distaste for addressing local zoning matters and reminds practitioners and clients alike of the importance of weighing all available options before choosing which path to pursue, even before litigation begins.

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