VanAntwerp Attorneys, LLP
Phone: 606-618-0698

The protection businesses need against frivolous zoning lawsuits

When it comes to real estate, it is all about location, location, location, particularly for businesses looking to expand. After negotiations to acquire the property, announcements are made about the new facility. Communities excited about the convenience and job opportunities welcome the business with open arms.

However, not all arms are open to new business development. Zoning disputes often arise over the land where a building is constructed. Lawsuits by individuals or groups can tie up development indefinitely.

Walmart planned a $30 million Supercenter in Louiseville’s West End. The company promised a low-cost retail option and 300 new jobs. A majority of Jefferson County embraced the company moving in to the community.

However, a small group of local preservationists filed a lawsuit that questioned the validity of the project. The legal action tied up the project’s progress in a prolonged legal battle. Continuing delays over the legal quagmire eventually resulted in Walmart pulling out.

Soon after the withdrawal, the Kentucky Court of Appeals ruled in their favor. It was a decision that would come too late. The lot now sits empty.

In response to that and other legal actions, the Kentucky House of Representatives passed a bill to reduce these types of frivolous lawsuits against businesses. House Bill 72 specifically addressed court cases filed to fight zoning decisions made arbitrarily or capriciously.

In the bill, individuals and neighborhood organizations who file lawsuits over zoning decision and lose in Circuit Court must post a bond if they choose to appeal. Judges can set the bond as high as $100,000 for a suit with merit or up to $250,000 if the jurist sees the case as “presumptively frivolous.”

If plaintiffs lose the appeal, a Circuit Court hearing would determine the actual costs and damages plaintiffs must pay out of the bond.

Opponents, including the lawyer who represented the conservation group against Walmart, claims that the legislation is unconstitutional. If passed, they believe it will deter those with limited legal and financial resources from appealing their cases to the Kentucky Court of Appeals.

The bill, supported by Greater Louisville Inc., now heads to the state Senate.

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