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Thursday, May 16, 2024

In the Zone: Court Rejects "Class of One" Equal Protection Lawsuit in Land Use Case

In Greenwald Family LP v. Village of Mukwonago, the Seventh Circuit Court of Appeals ruled in favor of a municipality in a "class of one" equal protection lawsuit challenging the municipality's decisions in various interactions with a property owner.

This case has quite a bit of history of interactions between the plaintiff (Partnership) and the Village related to 48 acres of land owned by the Partnership and the Partnership's desire to purchase additional property, ultimately leading the Partnership to file a lawsuit against the Village.

In 2014, the Partnership negotiated a purchase agreement to buy 4 acres of farmland from the Chapman family (Family) who owned 20 acres of farmland. The sale was contingent on Village approval of a land division of that larger parcel. The Partnership was told by the Village that a land division required a developer's agreement that would provide for the installation of certain infrastructure improvements including the construction of an access road, development plans, and a letter of credit to secure the obligation. The application was forwarded to the Village's plan commission, which conditionally approved the land division application conditioned on compliance with the conditions requiring a developer's agreement and development plans. After the Family's contract to sell the 4 acres with the Partnership  fell through because of the failure to meet these conditions, the Village purchased 8 acres from the Family, which included the 4 acres previously contracted for with the Partnership. The Village then constructed the access road, and sold the property to a developer as a development-ready parcel.

The Partnership also owned 47 other acres in the Village. Around 2018, the owner of property adjacent to the Partnership's land was negotiating to sell property to a developer, which triggered a requirement for construction of a new road that would cross a portion of the Partnership's property. After the Village initiated a condemnation action to "take" a portion of the Partnership's land needed for the road construction, the Partnership sued, claiming that the Village's condemnation action did not serve a public purpose and was intended to harm the Partnership. The Partnership alleged that the Village treated it differently than other developers and property owners in its various interactions and disputes. The district court rejected the Partnership's claims, finding a rational basis for each Village decision in dispute, and that ruling was appealed to the Seventh Circuit.

On appeal, the Seventh Circuit applied the two factors for a "class of one" equal protection claim (intentional treatment that is different from others similarly situated and no rational basis for the difference in treatment), and found no basis for the Partnership's claims because it agreed with the district court that the Village had a rational basis for each of its decisions being challenged (second factor). The Court cited to the benefits to the Village from development, including taxpayer benefits, commercial benefits, furtherance of planning objectives, and other community needs. The Court held that the Partnership failed to satisfy its burden to counter any conceivable rational basis for the Village's decisions, and concluded that the Partnership "is a disappointed landowner; it is not a victim of unconstitutional discrimination."


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