City ordered to stop weaponizing fines against homeowners

Lawyers at the Institute for Justice say they have won a battle with Charlestown, Indiana, and its plan to force property owners in one entire neighborhood to sell to a developer.

"Today's opinion in another rebuke to the city of Charlestown's reckless disregard for state law," said Anthony Sanders, an IJ attorney.

His group represents the remaining homeowners in the Pleasant Ridge subdivision.

"This includes a cap on the amount of fines, and a mandate that fines can only be issued against recalcitrant property owners," he continued.

"The city has wantonly ignored those protections through issuing immediate fines against property owners in its illegal quest to force them to sell their properties to developer John Neace," Sanders said.

The issue is over the state's Unsafe Building Law, which the town adopted, and its Property Maintenance Code. They do not always agree, and it's unclear which applies when, the case contends.

However, the city was using both laws to nitpick at property owners then fine them huge amounts to force them to sell to the developer, the case alleges.

The district court found that the town was not required to follow the UBL, even though it had been adopted. But the court also said homeowners likely would prevail on other sections of the law, so it imposed an injunction preventing further action.

The Indiana Court of Appeals said the homeowners likely also would prevail on that UBL count.

The decision on the neighborhood’s preliminary injunction now goes back to Judge Jason Mount to rule on how the Unsafe Building Law applies in the case and how it prevents the city from issuing fines, IJ said.

IJ explained: "The case arises out of the city’s horrific practice of fining property owners in the Pleasant Ridge neighborhood in an effort to force them out of their homes in order to have the entire area redeveloped by local businessman John Neace. Because of the city’s illegal code enforcement practices, Neace was able to purchase almost two hundred properties for only $10,000 per lot, far less than their tax-assessed values. Many of these sales were made from landlords who had been fined thousands of dollars in violation of the Unsafe Building Law."

IJ Senior Attorney Jeff Rowes said the residents of Pleasant Ridge "have been under assault from the city for years, and this is just the latest rebuke to its unconstitutional and immoral effort to wipe them off the map."

"We now look forward to having the trial court issue a new injunction against the city that includes a requirement that it follow state law."

The court ruling said: "We conclude that the city is required to comply with the UBL and that the city must enforce the PMC within the confines and strictures of the UBL. Accordingly, the trial court clearly erred in finding that the city is not required to follow the UBL.

"Because the trial court found that the UBL was not mandatory, the trial court did not address how the UBL impacts the city's enforcement of the PMC. Some of the privisions in the UBL are permissive, others are mandatory.

"We remand for the trial court to consider how the UBL and the PMC work together in light of our conclusion that the city is bound to enforce the PMC in accordinace with the UBL, and to reconsider the homeowners' claim that the city's manner of enforcing the PMC violates the UBL," the court said.