Be Careful How You Regulate

Municipal Law Alert, March 2009

Burnett County learned an expensive lesson on how not to enact ordinances in a recent Court of Appeals decision. Yourchuck Video, Inc. v. Burnett County, 2007AP2093, unpublished slip op. (WI App August 19, 2008). In that case, the County was ordered to pay $200,000.00 in damages because it enacted an ordinance that failed to provide adequate due process under the United States Constitution.

The County enacted an ordinance regulating signs. Yourchuck applied to install a sign larger and taller than the County ordinance permitted. The County rejected the application. When Yourchuck requested a hearing on the rejection, the County informed Yourchuck it could not have a hearing because the ordinance had no provisions for granting variances.

Yourchuck refiled the application. When the application was once again rejected, Yourchuck filed a notice of claim and challenged the constitutionality of the ordinance based on due process. They claimed that they had been denied notice and an opportunity to be heard before they were deprived of their property rights to erect a sign.

The matter went to trial, where the trial court found the ordinance was constitutional. The Court of Appeals, however, reversed that decision. The Court of Appeals held the ordinance was unconstitutional because it did not have a variance or other review procedure for permit applicants to redress grievances. Yourchuck Video, Inc. v. Burnett County, 2004AP2345, unpublished slip op. (WI App July 6, 2005).

The case was returned to the trial court, and a trial was held to determine Yourchuck’s damages caused by the County’s enforcement of its unconstitutional ordinance. The jury awarded Yourchuck $200,000.00 in damages. The County once again appealed and on the second appeal, the Court of Appeals upheld the damage award.

None of the Yourchuck court decisions are published and, therefore, they are not binding on other courts in different cases. However, the decisions serve as a cautionary tale for municipalities. Any governmental entity enacting ordinances should have the ordinances carefully reviewed prior to enactment. Ordinances are a very effective tool for a municipality to utilitize in performing its governmental functions. However, citizens have rights that must be considered by a governmental entity when conducting its business. Failure to comply with those rights can have expensive consequences.

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