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Wednesday, October 25, 2023

7th Circuit Upholds Dismissal of Challenge to Demolition of Nuisance Structure

The Seventh Circuit Court of Appeals upheld the dismissal of a civil rights lawsuit against a municipality over the demolition of a public nuisance property. Willow Way, LLC v. Village of Lyons

After a real estate investment firm bought a dilapidated house and failed to make repairs to the property, the municipality sought to tear down the house as a nuisance. The municipality provided notice of the demolition to the investment firm and, after demolishing the house, sold the property at an auction to satisfy the municipality's lien for demolition expenses. The real estate investment firm sued the municipality claiming the demolition of the home was a taking and a violation of its substantive due process rights. The firm also raised an inverse condemnation claim under Illinois law. The district court ruled in favor of the municipality finding its demolition of the house as a public nuisance was not a due process violation and did not require compensation.

On appeal, the Seventh Circuit agreed with the dismissal, rejecting the real estate investment firm’s claims. First, the Court held there was no due process violation as federal law only requires property owners be proved fair notice and opportunity for a hearing to determine if the structure is a public nuisance. Since the municipality had provided prior notice of the condemnation to the real estate investment firm, and the firm failed to challenge the condemnation at a hearing, the Seventh Circuit found no due process violation. Next, the Court dismissed the inverse condemnation claim on jurisdictional grounds finding that the municipality was not liable for fluctuations in the market price of real estate or a decline in home value when the property was unoccupied and condemned as a public nuisance.  

Post Authored by Tyler Smith & Julie Tappendorf, Ancel Glink


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