Two Louisville attorneys have called a proposed state bill unconstitutional, saying it would deter those with limited resources from appealing their cases to the Kentucky Court of Appeals.
“It’s bad policy because it doesn’t dismay someone who’s wealthy,” lawyer and Kentucky Resource Council head Tom FitzGerald, told Insider Louisville. FitzGerald and land use attorney Steve Porter have come out strongly against the bill.
The bill, HB 72, specifically addresses court cases filed to fight zoning decisions that parties believe were made arbitrarily or capriciously.
If an individual, neighborhood group or other party files a lawsuit in Circuit Court opposing a zoning decision and loses the case, then the plaintiff(s) wouldn’t be able to appeal the case to the Kentucky Court of Appeals without posting an appeal bond. A Circuit Court judge could set the bond as high as $100,000 for a lawsuit with merit or as high as $250,000 if the judge deems the case “presumptively frivolous,” according to the bill.
If the plaintiffs lose the case, whether frivolous or not, a Circuit Court hearing then would be held to determine how much in actual costs and damages the plaintiff must pay out. So although the plaintiffs may not pay out the entire bond amount, the bond requires that they have the money upfront.
The bill passed the Kentucky House of Representatives on Tuesday and now will head to the state Senate.
Ky. Rep. Jerry Miller of Louisville, who is a primary sponsor of the bill, said he disagreed with FitzGerald’s and Porter’s assessments that the bill was unconstitutional.
“I’m not a lawyer, but I’ve got plenty of lawyers who have looked at it and said it’s not,” Miller said, adding that Circuit Court judges could set appeal bonds at any amount below the maximum limits.
He filed the bill to cut down on what he said were frivolous lawsuits that stall development, pointing to the recent Walmart case.
Walmart planned to build a more than $30 million Walmart Supercenter at 18th Street and Broadway, which proponents said would bring a much-needed low-cost retail option to Louisville’s West End and create 300 new jobs. However, the company backed out of the project right before the Kentucky Court of Appeals ruled in Walmart’s favor.
At a House Judiciary Committee meeting last week, Louisville businesswoman Teresa Bridgewater, who owns the property Walmart had planned to develop on, laid the blame at the feet of Porter, who filed the lawsuit claiming the approval of the Walmart project was invalid.
“The community support for the project was overwhelming, along with many other people who do not live in West Louisville, with thousands and thousands of Jefferson County residents supporting the project. However, a small group of preservationists, a total of 9, tied the progress of this project up in prolonged litigation. Delay was their tactic every step of the way,” she said. “What we have now is an empty lot, no progress, no jobs.”
(There were actually 12 plaintiffs in the case against Walmart.)
Had HB 72 passed prior to the case, Bridgewater claimed it could have saved the Walmart project.
Porter, who represented the plaintiffs in the case against the West Louisville Walmart, told the House Judiciary Committee that legal action is a way that neighborhood groups and those living next to a development could address problems they have with the project.
“I think Jerry has gone beyond what is needed in filing this bill,” he said of Miller.
Greater Louisville Inc. chief operating officer Sarah Davasher-Wisdom also spoke before the House Judiciary Committee last week, throwing the chamber’s support behind the bill.
In an emailed statement to IL, Davasher-Wisdom said: “For years, GLI has advocated for legislation to deter frivolous appeals on development projects by requiring opposition to post a bond set by a judge. The legislation does not require a minimum bond, which allows the judge to determine if the suit is a delay tactic or frivolous in nature. If passed, House Bill 72 will deter this abuse of the courts that are ultimately tactics used to delay and kill projects.”
The Kentucky Circuit Judges Association said it was not taking a position on HB 72, and Chris Poynter, spokesman for Louisville Mayor Greg Fischer, said Tuesday that the mayor had not come down on either side.
‘A developer’s dream bill’
Miller told IL that Kentucky needs more laws that make it easier for businesses to operate in the state.
“There are a lot of laws that make us a lot less competitive than Indiana,” he said, adding that the Right To Work bill that Kentucky legislators passed earlier this year will also help the state become more business friendly.
With the new East End bridge open and utilities being installed at River Ridge business park in Southern Indiana, “what we fear is that there is going to be a great sucking sound of jobs from Kentucky to Indiana,” Miller said. “Capital will flow to the path of least resistance.”
However, FitzGerald argued that the appeal bond requirement would negatively impact disempowered residents, including majority African-American neighborhoods, who likely don’t have the resources to cover an appeal bond.
“This is a blatantly unconstitutional, a developer’s dream bill,” he said, adding that according to state law, the Kentucky Court of Appeals can already levy damages against plaintiffs if it finds that a case was frivolous or brought in bad faith.
He also argued that under the state constitution, people are guaranteed at least one appeal to another court. If passed, HB 72 would effectively prohibit plaintiffs from their constitutionally allowed appeal, FitzGerald said.
Jonathan Baker, a zoning lawyer who recently joined Wyatt, Tarrant & Combs, declined to comment on the specific language proposed in the bill but said that he believed it is good that the state legislature is talking about instituting a measure to cut back on frivolous zoning lawsuits.
“There are some good sides to having this discussion because there have been some projects that have been hurt pretty bad just from the clock tick,” said Baker, who previously worked as general counsel to the Louisville Metro Government advising Louisville Metro Council, the Board of Zoning Adjustment and the Planning Commission on zoning and land use matters.
The Circuit Court is a “good playing field” for people who want to argue that a zoning decision was arbitrary or capricious.
During the last five years, Baker said he’s seen zoning appeals come up that simply aim to deter or delay a development but leave “a lot to be desired” in terms of arguments. By adding an appeal bond, it encourages plaintiffs to lay out their complete and best arguments for why a zoning decision should be overturned in front of the Circuit Court judge, he said.
“I am not saying this is for everyone, but a game is being played where they know they can delay the process rather than engaging the court to get a truthful opinion,” Baker said.
He added that Circuit Court judges will have the flexibility when setting the bond and can take into account who brought the case and efforts they’ve made to bring their concerns before zoning officials.