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Ejs Properties, LLC v. City of Toledo; Robert Mccloskey

September 5, 2012


Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 3:04-cv-7312--James G. Carr, District Judge.

The opinion of the court was delivered by: Karen Nelson Moore, Circuit Judge.


Pursuant to Sixth Circuit Rule 206

Argued: April 19, 2012

Before: MOORE, GIBBONS, and ALARCON,*fn1 Circuit Judges.


In 2002, EJS Properties, LLC ("EJS") wanted to build a charter school at a commercial site on the east side of Toledo. To do this, however, the site first needed to be re-zoned. After initial support for rezoning from Robert McCloskey, the region's city council representative, McCloskey eventually changed his mind and the Toledo City Council voted against re-zoning the site. But according to EJS, McCloskey did more than just change his mind. EJS claims that McCloskey's sudden reversal occurred only after EJS refused to acquiesce to McCloskey's demand that EJS donate $100,000 to a local retirement fund, a demand McCloskey does not deny that he made.

EJS sued the City of Toledo ("City") and Robert McCloskey under 42 U.S.C. § 1983, claiming violations of EJS's rights to substantive and procedural due process, its right to equal protection, and its right to petition under the First Amendment, and asserting a state-law claim of tortious interference with a business expectancy. The district court granted summary judgment for the defendants on all of the constitutional claims. The district court also granted summary judgment to the City on the state-law claim and EJS has since dropped its state-law claim against McCloskey. The district court then denied EJS's motion for reconsideration. EJS appeals with respect to the constitutional claims only. For the following reasons, we AFFIRM.


On April 3, 2002, EJS entered into a written agreement with Pilkington Corporation ("Pilkington") to purchase a twenty-acre parcel from a forty-three-acre lot that Pilkington owned on the east side of Toledo, including an existing technical center that EJS intended to convert into a charter school. The agreement was expressly contingent on obtaining a zoning change away from M-2 (industrial district), which could not house a school. J.A. at 69-70 (Purchase Agreement). EJS also entered into a fifteen-year lease agreement with Lake Erie Academy to open a charter school on the Pilkington site. The lease had no express conditions.

In May 2002, EJS filed its re-zoning petition with the Toledo-Lucas County Plan Commission ("Plan Commission") seeking to change the zone from M-2 to C-2 for restricted offices. The staff of the Plan Commission recommended instead a change to M-3 for a planned industrial district, which would accommodate both a school and light industry. EJS accepted, and on June 13, 2002, the Plan Commission held a public hearing during which support for a charter school was mixed. J.A. at 6-19 (Comm'n Hr'g Tr.). Nonetheless, the Plan Commission recommended re-zoning the site to M-3 and passed the request to the Toledo City Council.

The City Council's Zoning and Planning Committee held a public hearing on the zoning request on July 17, 2002. J.A. at 20-40 (Comm. Hr'g Tr.). Concerns were raised about losing industrial options on the remainder of the lot, and everyone agreed to re- zone only the portion of the Pilkington property needed for the school to M-3 and to keep the remainder of the lot at M-2 for future industrial use. Id. at 33-36. The Committee, which consisted of seven City Council members, voted unanimously to recommend the request proceed to a full vote by the City Council. Id. at 337 (Committee Vote). Per the Toledo City Charter, the re-zoning request was drafted into Ordinance 643-02 and placed on the City Council's agenda for August 13, 2002. Id. at 832-35 (Ordinance).

Prior to the meeting, two executives from Pilkington, John Keil and Randy Berg, had a lunch meeting with Robert McCloskey, who represented the city council district containing the Pilkington lot. McCloskey allegedly asked Pilkington to contribute $100,000 to a local community center to assist retirees from Pilkington (formerly Libby Owens Ford) with prescription drug issues.*fn2 The executives declined. The parties debate whether the request was perceived as a quid pro quo exchange for his vote, but there is no dispute that the request for money was at one point made. See Appellant Br. at 10-11; City Appellee Br. at 7; McCloskey Appellee Br. at 9. Meanwhile, during the re-zoning process, EJS began work on the site. EJS applied for and obtained an "early start building permit" to begin preliminary repairs on the building. EJS claims that it spent $200,000 on repairs and improvements during this time.

At the City Council meeting on August 13, 2002, council member Peter Gerken moved to table consideration of the matter for two weeks. EJS claims that prior to this meeting, McCloskey lobbied the other members to reverse their vote, and when he could not get enough to defeat the measure, McCloskey asked his "close friend" Peter Gerken to table the matter. Appellant Br. at 13. The defendants dispute these facts. J.A. at 745-47 (Gerken Dep.) (indicating desire to obtain information about an "industrial corridor"); id. at 844-45 (Toledo Blade Article) (same). Regardless of the reason, the matter was tabled to August 27, 2002.

The defendants concede that McCloskey then called Keil, Berg, and Erich Speckin, the owner of EJS, and left voicemails with each "seeking a monetary contribution to the retirees' fund in connection with the pending re-zoning Ordinance." McCloskey Appellee Br. at 9. In one call to Keil, McCloskey states:

I am still looking to receive a check for $100,000 to the East Toledo Family Center and I have decided that, no punch line or anything, uh, that I really do not wish to get involved with. We brought this up at our agenda review meeting. We have decided to do a first reading on this. Then it will be heard at the Economic Development Committee sometime in November. Uh, if you want to see the budget goes, if you don't . . . hey that's cool. We'll allow it to die. Uh . . . please contact me. Thank you.

J.A. at 87 (voicemail transcription) (omissions in original).*fn3 In another to Keil, he states:

I have not heard anything from Mr. Berg or anybody else but, uh, as far as I'm concerned, uh, I will not move the project out of committee. I've talked to the majority of council members and they agree with me. And when I explain the whole situation, and uh, I'm sure that City Council, if there are any questions about it, that when they hear the testimony in committee from all the retirees at LOF and how they've been treated, I think there will be a majority, er, uh at least 100% of the Council will say "forget it." So, you guys . . . need to do what you need to do.

J.A. at 89 (voicemail transcription) (omissions in original). The call to Speckin states:

This project is probably not going to happen. Pilkington & Libby Owens Ford are not coming to the table with anything to help. I have the votes on council to stop the project. I don't wish to do this but Pilkington is not cooperating so, therefore, I would be very reluctant to put up any signs at this particular time and also you do need some kind of sign permit to put up signs. Talk to you later.

J.A. at 91 (voicemail transcription). On August 20, 2002, the City Council held its biweekly agenda review meeting, during which it reviewed the ordinance. Nine council members were present, including McCloskey. Robert Williams, an assistant chief operating officer for the City attended to relay Mayor Jack Ford's position regarding the site. According to Williams, the Mayor indicated that he wanted the site to "remain zoned for industrial and commercial use," but he did not state that he opposed the rezoning. J.A. at 646-48 (Williams Dep.).

On August 22, 2002, Keil sent a letter to all members of the City Council and Mayor Ford seeking support for the request and adding that "[c]onsideration should also be given to unrelated issues that may exist between [Pilkington and McCloskey]. Such issues have the potential for exploitation to the detriment of the zoning request . . . ."

J.A. at 96 (Keil Letter). At no point did Pilkington or EJS notify the police or other members of the City Council about McCloskey's request for $100,000; however, at one point Keil informed someone at the Mayor's office of the request.

On August 27, 2002, the City Council voted 7-4 against Ordinance 643-02 to rezone the Pilkington parcel sought by EJS. Of the seven, four had changed their vote from Committee:

Against For

Peter Ujvagi (Chair) - ...

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