e-Journal Summary

e-Journal Number : 83609
Opinion Date : 04/28/2025
e-Journal Date : 04/30/2025
Court : U.S. Court of Appeals Sixth Circuit
Case Name : Lathfield Invs., LLC v. City of Lathrup Vill., MI
Practice Area(s) : Municipal Constitutional Law
Judge(s) : Gibbons, White, and Murphy
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Issues:

Landlord rental license denial; Requests for declaratory relief; Mootness; Whether the city code required plaintiff to get a “general business license”; Whether plaintiff had Article III standing to vindicate its tenants’ rights; Claim that the tenants were licensees; “Preexisting, nonconforming use”; Heath Twp v. Sall (MI); Estoppel & laches; Due process; Liberty or property interest; MCL 117.3(k); Legislative acts equally affecting many people; Bi-Metallic Inv Co v State Bd of Equalization; Equal Protection Clause claim; “Class-of-one” theory; Contracts Clause claim under 42 USC § 1983; Kaminski v Coulter; Inverse condemnation; Civil conspiracy

Summary

[This appeal was from the ED-MI.] The court affirmed dismissal of plaintiff-Lathfield Investments’ claims against defendant-City of Lathrup arising from the denial of landlord rental and general business licenses, holding among other things that it could not bring a Contracts Clause claim under § 1983. The prior owner of Lathfield’s business properties had been involved in disagreements with the City over outstanding code violations. Lathfield went ahead and closed on its purchase of the property. The City later denied its “applications for general business and landlord rental licenses” due to its failure to comply with a City Code requirement “to list names and the principal businesses of its tenants.” In addition, because “Lathfield did not have a landlord tenant license, the City also denied its tenants’ general business license applications.” The court first affirmed the district court’s dismissal of Lathfield's request for a declaration that it was not subject to the City's site plan approval process as moot. Such a declaration would not affect its legal interests where the City had already approved its site plan. Lathfield also argued that the City Code did not require that it get a general business license because it was not “conducting business” within the City. But the court held that Lathfield’s business fell within the broad category of “performing a trade” and thus, required a business license. It also found no error in the denial of a declaration that the City prejudiced the tenants’ rights because Lathfield lacked a landlord rental license. It agreed with the district court that Lathfield lacked standing to litigate this issue. Further, it concluded that since “Lathfield was ‘leasing’ Property space as a landlord, it is subject to the City Code’s landlord rental requirements, including [the] tenant registration requirement.” It also rejected the claim that the property was “permitted as a preexisting, nonconforming use” where there was no evidence the property, “as currently constructed and operated, existed as a lawful use before the City Zoning Ordinance’s effective” date. Lathfield’s estoppel and laches argument also failed. As to its procedural due process claim, it did not identify “either a liberty or property interest of which it has been deprived.” The court noted it was “long ago held that legislative acts equally affecting many people, such as the City’s adoption of § 14-26 of the City Code, do not implicate procedural due process concerns.” Further, Lathfield failed to satisfy “the first element of its ‘class-of-one’ equal protection claim” and the district court did not err in granting the City summary judgment on both its Contracts Clause claims. Finally, it did not meet the first or second elements of an inverse condemnation claim and its civil conspiracy claim also failed.

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