Glenn Puit: Less SLAPP-Happy?

February 22, 2009 | |

State Representative Kevin Elsenheimer’s bill aimed at curbing lawsuits against local officials’ land use decisions gained little traction in the Michigan Legislature last year.

A costly legal battle between a big-box developer and Emmet County’s Bear Creek Township is winding down, and the news is mixed.

The development company mostly lost its case, but the winners—the township’s taxpayers—will still have to foot a big bill for defending themselves in court. And calls for protecting local governments from such lawsuits have yet to trigger legislative action in Lansing.

The battle between Bear Creek Township and the Petoskey Investment Group, a downstate development firm, began when the company sued the township for delaying its plan to build a 70-acre apartment and big-box store project just beyond Petoskey’s city limits.

The delay occurred because local citizens, weary of big-box developments in their rural community, tried to stop the project. Several years of legal wrangling, however, led to victory for the developer, which then built a Lowe’s big-box store, a modest strip mall, and some apartments on the property.

Then, with its project underway, PIG sued the township for damages, claiming that the delays due to the strong local opposition cost the company $6 million. It was the fourth PIG lawsuit against Bear Creek Township, which has now spent more than $400,000 defending itself against the firm.

Bear Creek Township’s defense in the latest case largely succeeded. Circuit Court Judge Charles Johnson tossed out roughly 90 percent of the developer’s suit; only one count of the original litigation is pending, and the potential damages the developer could still win are minimal.

But, according to one township attorney, Stephen Tressider, even if that final count goes down, local taxpayers have no recourse for getting back most of the money spent on legal defense.

“We are chasing them for about ten grand,” Mr. Tressider said. “That’s all we can get under the court rules.”

Cases like this are part of a disturbing trend in Michigan: Developers sue small, local governments that resist their plans because constituents want them to. Such attempts at punishing local governments for obeying the public even have a name: SLAPP suits—strategic lawsuits against public participation.

In one recent, particularly egregious example, big-box retailer Meijer Inc. was part of an effort to sue several Acme Township officials as private citizens, not as public officials, for opposing a development they wanted. Some of those suits were thrown out of court, but some are still on appeal.

Those personal legal attacks prompted state Representative Kevin Elsenheimer, a northwest Michigan Republican, to propose anti-SLAPP legislation.

His bill would have tripled the monetary damages awarded to SLAPP defendants. However, the representative recently told the Great Lakes Bulletin News Service, the bill never got a full hearing. He said that the legislation “may or may not” come up this session; as new House minority leader, he’s traditionally precluded from introducing new bills.

Meanwhile, Petoskey Investment Group is in serious financial trouble. According to one report, the company’s development, excluding the Lowe’s box, is on the verge of foreclosure. There are also rumors of the court levying a substantial lien on the property.

And Scott Chapelle, a lawyer who is one of the driving forces behind the development, is now listed on a foreclosure filing for a property near Good Hart, in Emmet County, that is worth $3.3 million, according to one local newspaper.

Mr. Chappelle did not respond to an email request for comment.


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