After criticizing a southern Indiana city’s practice of levying code violation fines against some, but not all, local property owners as “irrational,” a Scott County judge has issued a preliminary injunction requiring the city to issue fines in a consistent manner that complies with local ordinances.
Special Judge Jason Mount of Scott County ruled in favor of residents of the Pleasant Ridge neighborhood in Charlestown on Monday. The residents sought injunctive relief from what they characterized as excessive fines being levied against them by the city administration and a code-enforcement scheme designed to skirt eminent domain laws.
The fines began in the summer of 2016, when the Charlestown city administration implemented a new code enforcement practice meant to further Mayor Bob Hall’s goal of revitalizing Pleasant Ridge, a low-income neighborhood. According to the residents, the mayor’s plans include demolishing the existing Pleasant Ridge homes and building more expensive homes in their place.
Hall first attempted to demolish the Pleasant Ridge homes through a 2014 Blight Elimination Program grant. The city announced plans to partner with Neace Ventures, owned by John Neace, to tear down the Pleasant Ridge homes and allow Neace to redevelop the property. However, after local residents opposed the program, the city abandoned its plan.
Hall and his administration renewed their efforts in 2016, when the city council passed a series of ordinances allowing the city to inspect the Pleasant Ridge homes and impose fines for code violations that could not be waived. Meanwhile, Neace formed Pleasant Ridge Redevelopment, LLC, a redevelopment company that offered to buy the Pleasant Ridge homes, many of which are duplexes, for $10,000 each. The city agreed not to impose code violation fines on homes that Neace purchased in exchange for the LLC’s agreement to eventually demolish the homes.
Meanwhile, the Charlestown Pleasant Ridge Neighborhood Association – which is the plaintiff in the instant case, along with individual residents who are members of the association – was fined for violations in property it owns. Though the association began working to resolve the violations once they were made aware of them, city officials refused to waive the fines, even after the violations were fixed.
Further, fines against the association and all Pleasant Ridge residents began accruing immediately and daily, even if the landlords or homeowners were not made aware of violations for several days. Because of the city’s policy against waiving fines for landlord or owners other than the LLC, the association accrued fees of nearly $9,000.
The association and residents then sought injunctive relief on the basis that the city’s fee-assessment policy violated local, state and federal laws, including the local property maintenance code, the state Unsafe Building Law and equal privileges or immunities protections, and federal equal protection laws. While Mount found the plaintiffs’ claims under the Unsafe Building Law likely would not succeed because local ordinances supersede it, he found a likelihood of success on each of their other claims.
Specifically, Mount noted the local property maintenance code requires the city to “provide a reasonable opportunity to make repairs before fines may be imposed,” which the city did not do here.
“What makes no sense is to continue to insist on imposing fines, with no meaningful right to appeal, on homeowners who resolve the problems and bring their residences into compliance, in good faith and in a reasonable time period,” the special judge wrote. “If the City’s concern over health and safety is to be believed, then these concerns are addressed in either instance – in the first case by razing and in the second by repairing. Ergo, fees should be waived, or not even assessed, in both instances.”
Further, Mount determined the city violated equal protection laws by choosing not to impose fines on the LLC for its properties – even if those properties violated local codes – while levying fines against residents who tried to bring their properties into compliance. The judge had particularly harsh words for Hall, who indicated in emails that it would be “financially disastrous” for residents to try to improve their homes, because the homes would be demolished anyway. Such statements, coupled with the city’s policy of not levying fines against LLC-owned homes, undermine the goal of maintaining safety, Mount said.
Finally, Mount determined Indiana’s eminent domain laws prohibit the city’s fine assessment practices. As support for that ruling, Mount pointed to the state’s response to the decision in Kelo v. City of New London, 545 U.S. 469 (2005), which held that the Fifth Amendment allows governments to take private property for the promotion of economic development.
“Less than a year later, Indiana enacted a comprehensive reform statute rejecting the Kelo decision as a matter of state law,” Mount wrote. “…Under the new law, the fact that a property happens to be located in ‘an area needing redevelopment’ is not a justification for transferring it to another private party. … Indiana has therefore rejected the kinds of compelled transfers that the City is attempting in this case.”
Thus, Mount issued the preliminary injunction and ordered the city administration to impose its code violation fines in accordance with the language of its local ordinances. The Institute for Justice, which brought the case on behalf of the plaintiffs, celebrated Monday’s ruling.
“Today’s ruling unmasks the City of Charlestown’s and developer John Neace’s actions for what they are: a naked land grab, taking from the poor to give to the rich,” IJ senior attorney Anthony Sanders said in a statement. “With this injunction in place, the city either must force Mr. Neace’s company to pay several million dollars in fines or waive the fines it has illegally and unconstitutionally issued against the residents of Pleasant Ridge.”
City attorney Michael Gillenwater did not immediately respond to a request for comment on Mount’s issuance of the preliminary injunction. However, in a previous interview with the Indiana Lawyer, Gillenwater defended the city’s fine assessment practices and said code violation is a common method of municipal redevelopment.
The case is Charlestown Pleasant Ridge Neighborhood Association Corporation, et al. v. City of Charlestown, Indiana, Charlestown Board of Public Works and Safety, 10C02-1701-CT-010,