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LLC v. Sower

United States Court of Appeals, Sixth Circuit

March 1, 2017

202 North Monroe, LLC, Plaintiff, City of Rockford, Plaintiff-Appellant,
v.
Caleb Sower; Kristine Sower; Larry Vis; Elsie Wayman; Jim Jennelle; Susie Jennelle; Dale Goossen; Linda Goossen; Jack McClennen; Amy Hadley; Neighbors for Neighborhood, Inc., Defendants-Appellees, Fred Haack; Angie Haack; Kenneth E. Phillips; Troy Winters; Michelle Winters, Third Parties-Appellees.

          Argued: February 2, 2017

         Appeal from the United States District Court for the Western District of Michigan at Grand Rapids. No. 1:16-cv-00325 Janet T. Neff, District Judge.

          ARGUED: Mary Massaron, PLUNKETT COONEY, Bloomfield Hills, Michigan, for Appellant. Michael D. Homier, FOSTER, SWIFT, COLLINS & SMITH, P.C., Grand Rapids, Michigan, for Appellees.

          ON BRIEF: Mary Massaron, PLUNKETT COONEY, Bloomfield Hills, Michigan, for Appellant. Michael D. Homier, FOSTER, SWIFT, COLLINS & SMITH, P.C., Grand Rapids, Michigan, for Appellees.

          Before: GIBBONS, COOK, and KETHLEDGE, Circuit Judges.

          OPINION

          JULIA SMITH GIBBONS, Circuit Judge.

         After the City of Rockford (the City) failed to approve a zoning petition for property owned by 202 North Monroe, LLC (202 North Monroe), the developer sued, challenging the constitutionality of the zoning-approval process. After a number of individuals living in the vicinity of the proposed development attempted and were denied the opportunity to intervene in the litigation, the City and 202 North Monroe settled their dispute and a federal district court entered a consent judgment under which the City agreed to rezone the property and 202 North Monroe agreed to address several environmental issues.

         Disappointed with this result, the proposed intervenors, other residents, and a local neighborhood association (collectively the Neighbors) sued 202 North Monroe and the City in state court, seeking a declaration that the City failed to comply with Michigan law when it approved the settlement agreement. 202 North Monroe and the City (now collectively plaintiffs) responded by filing this action in federal district court to enjoin the state proceeding as an improper attack on the prior consent judgment. The district court dismissed the case for lack of jurisdiction and the City now appeals. Although the district court could have exercised ancillary jurisdiction over the latter federal suit, we affirm the dismissal of plaintiffs' complaint because the Anti-Injunction Act bars a federal court from enjoining the Neighbors' state-court action.

         I.

         202 North Monroe owns property in the City of Rockford that it intends to develop into residential condominiums. In order to do so, it sought to have the City rezone the property from "R-2 Single Family Residential" to "Planned Unit Development." A group of residents challenged the proposal by filing a protest petition with the City. This triggered a special approval procedure under Section 403 of the Michigan Zoning Enabling Act (MZEA), MCL 125.3101 et seq., which requires a super majority (at least two-thirds) of city council members to vote in favor of the zoning proposal. The proposal subsequently failed when only three of the council's five members voted to rezone the property.

         In July 2015, 202 North Monroe sued the City in state court, alleging that the City violated its substantive-due-process rights and that the City's actions constituted an unconstitutional regulatory taking of its property. The City timely removed the case to the United States District Court for the Western District of Michigan.

         In federal district court, Caleb Sower, Kristine Sower, and Neighbors for Neighborhood, Inc., sought to intervene as defendants and cross-plaintiffs. They sought intervention as a matter of right, arguing that the resolution of the case would impede their ability to oppose rezoning and suggesting that, by settling the case, the City would be able to rezone the property without satisfying the super-majority approval requirement still in place as a result of their protest petition. They also sought permissive intervention, arguing that their proposed cross-claim shared a common question of law or fact with 202 North Monroe's claims against the City.

         The district court denied the motion to intervene in October 2015. The court held that the intervenors' proposed interest of "defeating the rezoning application" was moot because the City had denied 202 North Monroe's application and that any concern that the City's denial could be overturned was "too generalized to support a claim of intervention of right." No. 1:15-cv-785, DE 26, Page ID 437. The district court also denied permissive intervention.

         In December 2015, the City and 202 North Monroe entered into mediation and eventually reached a settlement. The city council approved the settlement by a simple majority in January 2016 after discussing the pending litigation in a closed session. On February 1, 2016, the district court approved the settlement by entering a consent judgment that "ordered, adjudged, and decreed" that:

1. The Subject Property is hereby rezoned from R-2 to PUD.
2. The Clerk of the City of Rockford shall cause the Zoning Ordinance Map to be amended to identify the zoning classification of the Subject Property as PUD.
3. The Planned Unit Development Agreement (the "PUD Agreement") attached hereto as Exhibit B is hereby approved.
4. Within thirty (30) days after the date of this Judgment, the Clerk of the City of Rockford shall cause the PUD Agreement to be recorded with the ...

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