reVamped LLC v. Pipestone, City of

Background

The case concerned the Calumet Inn in Pipestone, Minnesota. Heliocentrix purchased the hotel in 2012, and Vanda Smrkovski was its sole owner. In 2018, Heliocentrix entered into a contract for deed with reVamped, an entity created and solely owned by Tammy Grubbs. Grubbs operated the hotel while Heliocentrix remained its legal owner.

The hotel had received repeated code-violation notices. In November 2019, a deputy state fire marshal issued an inspection and compliance order listing nine fire-code violations. In January 2020, a fire occurred at the hotel; the room’s sprinklers did not activate, and two children were present. A March 9, 2020 inspection identified five unresolved items from the earlier order and eight new violations. On March 10, Doug Fortune, the City’s code official, issued a Building Closure Order declaring the hotel a distinct fire hazard and requiring occupants to leave by 5:00 p.m. that day. The hotel remained closed under that order until April 30, 2020, when Fortune determined that the cited violations had been remedied sufficiently to remove the condemnation placards. The hotel later received operating licenses again, but it eventually closed indefinitely.

Claims and Motions

The plaintiffs brought two claims. Count I was a claim under 42 U.S.C. § 1983, a statute allowing claims against government officials for constitutional violations. They alleged that the City and Fortune violated procedural due process under the Fourteenth Amendment by failing to provide adequate procedures before and after the closure. The court understood this count to include claims that the City failed to consider an appeal, that the City and Fortune failed to provide an opportunity to remedy safety concerns before closure, and that Fortune violated due process through his actions leading to the closure.

Count II alleged that the closure was an uncompensated regulatory taking under the Fifth Amendment. The parties filed cross-motions for summary judgment, which asks whether the undisputed record entitles one side to judgment as a matter of law without a trial.

Procedural Due Process

The court assumed, without deciding, that the plaintiffs had a constitutionally protected property interest. It nevertheless ruled that the available procedures were constitutionally sufficient.

The Pipestone City Code allowed a person directly affected by a code official’s decision or order to appeal to the City Council by filing a written application within 20 days. The code provided for an appeal hearing, an opportunity to be heard, and a recorded decision that could modify or reverse the closure by majority vote. Minnesota administrative rules also allowed an appeal to the State Building Code Appeals Board if the municipality did not hold an appeal hearing within ten working days after receiving a properly completed appeal application. The City Code and state law further allowed judicial review through a writ of certiorari, a court procedure for reviewing legal errors in an administrative decision.

The court found that the plaintiffs did not invoke these procedures. The City Council discussed the hotel’s closure on March 23, 2020, but did not hold an appeal hearing or vote on the closure. The plaintiffs described that meeting as not being an appeal. Plaintiffs’ counsel prepared an appeal packet for the state board but never submitted it. The plaintiffs also did not seek certiorari review or a writ of mandamus concerning the City’s actions.

The court noted that the record did not establish whether a 19-page document sent by plaintiffs’ counsel to the City attorney qualified as a City Code appeal application because the document was not submitted with the summary-judgment materials. But the court concluded that the plaintiffs were not prevented from using the available appeal procedures. It also noted that the plaintiffs did not argue that those procedures or certiorari review were constitutionally inadequate. The court therefore concluded that there was no procedural due-process violation based on the lack of post-closure review.

The court separately rejected the claim that the plaintiffs were constitutionally entitled to a hearing or an opportunity to make repairs before the emergency closure. The City Code and Minnesota rules authorized expedited closure of a hazardous building without a pre-closure hearing. Relying on the principle that emergency government action may occur before a hearing when the government must act quickly, the court held that the plaintiffs had not shown that additional pre-closure procedures were constitutionally required. The court also rejected the plaintiffs’ argument that Minnesota eminent-domain procedures applied, explaining that the City had used emergency building-safety authority rather than eminent-domain authority.

Qualified Immunity

The court also addressed Fortune’s liability in his individual capacity. Qualified immunity can protect a government official from personal liability unless the official violated a constitutional right that was clearly established at the time.

The court concluded that the plaintiffs had not identified a clearly established right requiring pre-closure process when a city official issues an emergency closure order under the City Code and Minnesota administrative rules. Fortune was therefore entitled to qualified immunity from the individual-capacity claim.

Regulatory-Takings Claim

The court granted the defendants’ motion on Count II. It assumed, without deciding, that the plaintiffs had a protected property interest in owning the Calumet Inn. The court nevertheless held that reasonable building codes and safety ordinances allowing closure of buildings that endanger the public do not generally create a compensable constitutional taking.

The parties agreed that the plaintiffs could not operate the hotel during the closure and that this caused an economic impact. But the temporary closure was intended to address safety concerns, was not alleged to be pretextual or beyond the City’s regulatory authority, and lasted less than two months. The court concluded that the City’s decision to prohibit use of a property presenting a danger to the public could not constitute a regulatory taking under the Fifth Amendment.

Disposition

Judge Jeffrey M. Bryan ordered that the plaintiffs’ motion for summary judgment was DENIED. The defendants’ motion for summary judgment was GRANTED, and all counts in the plaintiffs’ amended complaint were DISMISSED. The pending motions to exclude expert testimony were DENIED as moot, meaning the court found it unnecessary to decide them after resolving the case.