County Regulation Of Electrical Corporation
Grain Belt is an electrical corporation and public utility. Grain Belt wants to construct and maintain high voltage transmission line to transmit energy from Western Kansas to Missouri and other more eastern states (Grain Belt Project/GBP). In 2012 Chariton County approved the construction of pole lines, conduits, conductors, and equipment for utility purposes through, across, under and over public roads and highways of the county. In 2014, Chariton rescinded its approval until the project was approved by the Missouri Public Service Commission (MPSC). In 2016, Grain Belt applied to MPSC for certificate of convenience and necessity for the project. The project was approved. A route plan was approved which required Grain Belt to adhere to the final proposed route. The County refused to give assent to the plan. Grain Belt filed a petition with the court in May 2022. Grain Belt sought a declaratory judgment declaring 1) the refusal to grant an assent exceeded the County Commissions jurisdiction under Section 229.100. 2) Charlton County conditioned its assent on Grain Belt’s execution of a road use agreement exceeded the County Commission’s jurisdiction under 229.100 RSMo., and 3) Section 229.100 RSMo. cannot be used by the County Commission to prevent the GBP from moving forward. The parties stipulated to the facts and the trial court found in favor of Grain Belt on Count 1 that pursuant to 49.650.4 Chariton County is prohibited from taking any action, adopting any ordinances, resolution, or regulation governing Grain Belt including taking any action that regulates the construction of overhead transmission lines pursuant to Section 229.100. Chariton appealed. The trial court deemed the other counts as moot. The Western District upon review reversed in part and affirmed in part the trial court’s order.
The Western District examined two statutes at issue. Under Section 229.100 (1939):
No person or persons, association, companies or corporations shall erect poles for the suspension of electric light, or power wires, or lay and maintain pipes, conductors, mains and conduits for any purpose whatever, 6 through, on, under or across the public roads or highways of any county of this state, without first having obtained the assent of the county commission of such county therefor; and no poles shall be erected or such pipes, conductors, mains and conduits be laid or maintained, except under such reasonable rules and regulations as may be prescribed and promulgated by the county highway engineer, with the approval of the county commission.
The other statute at issue is 49.650 (2004) provides that:
No county of the first, second, third, or fourth classification shall have the power to adopt any ordinance, resolution, or regulation pursuant to this section governing any railroad company, telecommunications or wireless companies, public utilities, rural electric cooperatives, or municipal utilities.
The primary issue before the court is the contradiction which existed in the state statutes and how the state laws impact a non-charter county like Chariton County’s ability to regulate overhead transmission lines across county roads. The trial court relied on the Missouri Supreme Court’s decision in Cedar County v. Parson, 661 S.W.3d 766 (Mo.banc, 2023) as its guide for state laws that restrict or prohibit local regulations. The Western District believed this issue was different than Cedar v. Parson and the conflict could be reconciled. Any inconsistency between the two statutes can be reconciled by distinguishing the authority of the county addressed in each statute. The court concluded a fair interpretation of Section 229.100 RSMo. is that it gives Chariton County the authority to reach an agreement with Grain Belt for the manner in which Grain Belt’s overhead transmission lines are constructed for the purpose of ensuring the safety and use of the county roads. A fair interpretation of Section 49.650.4 RSMo. is that it prohibits Chariton County from refusing to reach an agreement with Grain Belt under Section 229.100 RSMo. for the purpose of preventing Grain Belt from constructing the overhead transmission lines over the county’s public roads. To the extent the circuit court’s judgment does not require Grain Belt to obtain Chariton County’s assent under Section 229.100 RSMo, that portion of the judgment was reversed. Pursuant to Rule 84.14,11 the court declared Grain Belt was required to obtain Chariton County’s Section 229.100 assent to the manner in which the overhead transmission lines are constructed to ensure the safety and use of the county’s public roads. Grain Belt Express v. Chariton County, (WD86613, 10/15/2024)
Flood Damage Statute Of Limitations
In 2017, flooding damaged a building and a parking lot which Engineered Sales Acquisition Corporation (ESI) was leasing in Maryland Heights, Missouri. ESI alleged water caused over $100,000 in damages to the above ground areas and an unknown amount of subterranean damage.
Missouri American Water Company (MAWC) had worked on the water pipes near the property. Travelers agreed to pay claims against in MAWC for damage to surface areas in the amount of $33,406. ESI declined to sign a release of all claims. ESI submitted an expert report in 2023 to Travelers finding damages on the surface and underground exceeded $100,000. ESI cited the pandemic as the reason for the delay. Travelers denied ESI’s claim on behalf of MAWC in its entirety, including the previously offered $33,406. In April 2023, ESI initiated the litigation in this matter and amended its petition on September 6, 2023. Travelers and MWAC filed a motion to dismiss on grounds the statute of limitations had run and there existed no direct claim against Travelers. The trial court granted the motion to dismiss.
MWAC and Travelers acknowledged in argument that ESA had alleged in its petition that the statute of limitations had been waived or suspended but MWAC and Travelers argued the petition when raising the issue that the statute of limitations was waived or suspended claim ESI was only making conclusory allegations and only stated legal conclusions which could not be considered in deciding if relief should be granted.
The Eastern District on review rejected the trial court’s conclusion that the pleadings were mere legal conclusions. ESI pleading stated the parties had agreed to toll the statute until an engineer’s report was completed which is different than merely stating in the petition the parties agreed to toll the statute of limitations. The Eastern District provided that as the matter proceeds ESI may need to submit additional evidence upon remand, but the evidence of waiver or suspension was not required at this stage of litigation. The court affirmed the decision to dismiss the cause of action against Travelers because as a general rule an injured party cannot proceed in a direct action against an insurance company providing liability coverage for an insured. Engineered Sales Acquisition v Missouri American Water Company, (ED112315, 9/24/2024)
Short Term Rental Cases
We previously discussed a fantastic IMLA Webinar hosted by Katie Hodgdon covering Short Term Rentals. Given the potential complexity of the issues that can be raised we will continue to look at these cases that Katie Hodgdon discussed to highlight legal issues of significance.
Procedural and Substantive Due Process
Thayre filed suit against the Town of Brookline and the Town of Brookline Zoning Board of Appeals for the violation of her state and federal due process rights.
Thayre lived in and owned a three bedroom condominium in Brookline, Massachusetts. Thayre began offering rooms in the unit to the public as short-term rentals through an online service. Under the zoning regulations where Thayre resided and where she was using her property for short-term rentals the City prohibited any uses not expressly permitted by the zoning regulations. The City after becoming aware that the property was being used as a short-term rental believed this was not a permitted use and therefore there existed a restriction that prohibited the way Thayre was occupying and renting the property. The City provided notice of the violation and advised Thayre to stop listing her property. Thayre challenged they City’s position that her use was a violation, and a hearing was conducted. At the hearing before the Board there was significant discussion about the issue, it included whether Thayre’s use was contemplated or intended to be covered by the regulations being raised. The hearing process not only tried to resolve if this issue was covered by current regulation but determine which regulation was being violated. It was deemed by the Board the use was not permitted and until there existed additional regulation that permitted this use, Thayre was prohibited from using this property as a short-term rental. Thayre subsequently filed a suit alleging procedural and substantive due process violations.
Procedural Due Process: The court provided that to establish a procedural due process claim under 42 U.S.C. Section 1983, Thayre needed to show she has a property interest as defined by state law and, second, that the Brookline or the ZBA acted under color of state law and deprived her of that property interest without constitutionally adequate process.'” Marrero-Gutierrez v. Molina, 491 F.3d 1, 8 (1st Cir. 2007)
The court found that Thayre was not deprived of her ability to rent her property, but only had her ability to rent her property for 30 days or less limited by the regulation. Her interest in short term rentals only becomes a protected property interest when recognized by state statute or legal contract express or implied between the agency or the individual. The zoning regulation did not list short term rentals as a permitted use and there existed no other law that conferred a property right to Thayre to engage in short term rentals. There was no evidence of a law or contract to support a protected property interest. There was insufficient evidence to support a claim that there existed a property interest.
Thayre also challenged the process used. Thayre claimed that she was not provided adequate notice because the notice was faulty. Her claim failed because due process only calls for such procedural protections as the particular situation demands and the essential requirements are that there was an opportunity to be heard at a meaningful time and in meaningful manner. Thayre received a notice of a violation that alleged she violated a zoning regulation. While there was an issue regarding which regulation was being violated at the outset of the process. At the hearing it was determined that Thayre was in fact in violation of a regulation, but it was not a violation of the regulation which was listed in the notice of the violation. Despite citing the wrong regulation at the outset, the town had reasonably placed Thayre on notice of the alleged violation, she had a right to appeal, she was on notice that the issue was that her ability to host guest was prohibited, and she was aware the town would address and review which regulation properly regulated this issue. The court concluded this process was adequate.
Thayre also alleged there was an issue with the process because she was denied an impartial tribunal. Thayre alleged the chair of the BZA was predisposed to rule against her and that violated her due process rights. Thayre submitted a newspaper article which indicated the chair had a negative predisposition toward short-term rentals. The court concluded that courts looking at this issue have previously found that local board members have considerable leeway for the free exercise of their personal views. The record of the hearing did not indicate the board was predisposed or bias. In this case the record showed there was significant discussion by the board over the course of the hearing, the board carefully considered the issue, and there was significant discussions about the merit of Thayre’s case which reflects that there existed adequate process which did not violate Thayre’s rights.
Thayre failed to allege sufficient facts to state a procedural due process challenge.
Substantive Due Process: Thayre alleged there existed substantive due process violation. In this matter substantive due process prohibits governmental conduct that shocks the conscience or infringes on rights implicit in the concept of ordered liberty. The conduct is such that it is not sufficiently connected to any legitimate state interest. The court noted prior court cases have found that a regulatory board does not transgress constitutional due process requirements merely by making decision for erroneous reasons or by making demands which arguably exceed the board’s authority under the relevant state statutes. The court found that at most Thayre alleged that the BZA “ventured beyond the limits of its authority” when it interpreted the definition of ‘lodger” to exclude short-term rentals but the Board had the authority to interpret its own zoning by-laws, and the Court is required to “review with deference the legal conclusion within the authority of the board.” Even if the Board erred in its interpretation of the regulations, it did not violate Thayre’s substantive due process rights by engaging in such interpretation.
The court granted the motion to dismiss. Thayre v. Town of Brookline, (29-CV-10510, 02/19/2021)
Police Shooting
Officer Newton was employed by the Kansas City, Missouri Police Department. While on patrol Officer Nelson observed a vehicle speeding and he attempted to conduct a traffic stop. The driver of the speeding vehicle was latter identified as Donnie Sanders. It is alleged that after Officer Nelson initiated the stop of the speeding vehicle, Sanders stopped his vehicle, exited the vehicle, and ran from the scene.
Officer Newton exited his vehicle and pursued the Sanders on foot. According to Officer Newton he commanded Sanders to stop running. After Sanders was commanded to stop he stopped running and then began to walk toward Officer Newton. Sanders allegedly had one of his hands in his pocket and raised this concealed hand toward Officer Newton as if there was gun in Sanders’s jacket pocket. Sanders yelled that he was going to shoot Officer Newton. Sanders failed obey Officer Newton’s commands to “stop, get down, drop the gun” and in response Sanders continued to move toward Officer Newton. Officer Newton discharged his gun, hitting Sanders three times. Sanders died from the injuries. Officer Newton later learned that Sanders was unarmed. The estate of Donnie Sanders filed suit against Officer Newton pursuant to 42 U.S.C 1983 for violating Sander’s Fourth Amendment right to be free from excessive force. The district court denied Officer Newton’s request for the case to be dismissed on the grounds that Officer Newton was entitled to qualified immunity concluding there existed genuine issues of material fact. The district court noted that there existed medical evidence that was inconsistent with the facts as alleged by Officer Newton and there existed a recording but that the recording only capture garbled audio of the event.
Newton appealed his denial of qualified immunity. The 8th Circuit concluded that it lacked jurisdiction to resolve the case because the issue before the court at this time was not a question of law but a question of fact. The 8th Circuit decided that the facts at this point remained unsettled and disputed. Nunleys v. Newton, (8th 23-3329, 9/25/2024)
Nightclub License Suspension After Shooting
Diamond Inc. operated a club in downtown San Jose, California (City). On the night of May 27, 2017, a live show was cancelled due to dispute between the owner and the promoter shortly before the show was scheduled to start. The show’s promoter then fired multiple shots into a crowd outside the club.
Using a city ordinance that empowers the Chief of Police to deny, revoke, or suspend the license of a public entertainment business that serves alcohol and hosts events with more than 100 guests if the business operates in a way that causes a “public nuisance” the license for the facility was suspended after an administrative hearing. The license was suspended for thirty days, finding that Diamond Inc. operated its venue in a manner that caused the shooting and created a public nuisance. Diamond’s thirty-day suspension went into effect after the suspension was affirmed on administrative appeal.
Diamond facially challenged the public entertainment business nuisance provisions of the City ordinance in district court, arguing that they operate as prior restraints and are overbroad and vague. Diamond also challenged the procedural adequacy of the administrative hearing. The district court dismissed Diamond’s claims and granted summary judgment in favor of the City, holding that the challenged provisions did not implicate First Amendment rights and the City satisfied due process requirements.
The Ninth Circuit affirmed by finding Diamond’s facial attack fails because the challenged provisions do not give City officials unbridled discretion that creates a risk of censorship. The City’s public entertainment business licensing scheme properly constrains official discretion by incorporating narrow, objective, and definite public nuisance statutes into the scheme. Similarly, Diamond failed to state a due process claim. The licensing scheme provided Diamond with notice, an opportunity to be heard, the ability to present and respond to evidence, and a pre-deprivation appeal, followed by post-deprivation review by the California Superior Court. Diamond Enterprise v. City San Jose, (9th 20-15085, 4/30/2024)
Kansas City Missouri Sued Over Anti-Voucher Discrimination Ordinance
Kansas City adopted an ordinance that prohibits landlords from rejecting a tenant based solely on the person’s source of income and prohibits landlords from refusing to rent to tenants who pay the bulk of their rent with federal housing assistance vouchers. A violation could result in fines of $1000 and repeat offenders could have their rental permit suspended. Two landlords have filed a lawsuit against the city arguing the city ordinance goes too far by forcing participation in the federal voucher program. We will keep you updated on how this proceeds.
Mayor Impeached Over Residency Qualifications
The Christian County Prosecutor has filed charges against the mayor of Billings City, Missouri. The mayor was charged with a felony for allegedly lying about being qualified for office. The mayor ran for the office in an uncontested election in April. It is alleged she is not a resident of Billings but instead resides in Marionville, Missouri. The evidence against the mayor includes witnesses and documents which the prosecutor believes will support the charges. We have previously covered cases related to the residency of a candidate. Historically Missouri courts have been generous with their view of what constitutes residency. This could be an interesting case so we will follow it. Billings Mayor Indicted
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