The township bent the rule for someone else years ago. That was not enough
A Michigan developer that fought a township over withheld building permits struck out on every constitutional claim at the Sixth Circuit.
The US Court of Appeals for the Sixth Circuit on November 9 affirmed summary judgment for Charter Township of Lyon Township, Michigan, rejecting equal-protection, due-process, and First Amendment retaliation claims brought by GSL Holdings, LLC under 42 U.S.C. Section 1983.
The dispute started with a deadline nobody could move. In December 2020, GSL leased a roughly six-acre parcel in a Lyon Township industrial park to Moba Americas, an egg-industry machinery manufacturer, and agreed to build a facility ready for occupancy by October 2021. Ten months, start to finish.
The property had no public sewer access. That meant GSL needed a septic permit from the Oakland County Health Division before construction could begin - but the county had denied an earlier application for the same property around 2018 and said it would not reconsider until the developer combined the parcel with an adjacent lot. As of early 2021, GSL still had not applied to do so.
The township preliminarily approved the site plan in January 2021 but its code required developers to “secure all necessary permits from other agencies as applicable to the project” before building. Lyon Township executed a hold-harmless agreement in March to let plan review proceed. Then in April, the township supervisor directed staff not to issue permits until the sewage question was resolved. A second proposed agreement - requiring GSL to extend the public sewer at its own cost if the septic permit fell through - went unsigned. The Moba deadline came and went. The lease was terminated.
GSL’s equal-protection claim rested on one comparator: SW North America, which received a building permit from the township around 2017 without a septic permit in hand. The township conceded that was a mistake by a building coordinator who no longer worked there. One bent rule four years earlier, the court held, did not strip the township of a rational basis for enforcing it now.
On due process, the court applied Michigan law requiring both a lawful permit and “construction work of a substantial character” on the property before a vested interest exists. GSL had neither. Even assuming permits issued in March 2021, no construction happened before the reversal in April.
The First Amendment claim turned on an email a GSL representative sent to the entire township board pressing for faster action. The township’s attorney responded that emailing the full board risked violating Michigan’s Open Meetings Act. The court found the restriction content-neutral, narrowly tailored, and leaving open other channels of communication.
For developers and permitting teams, the practical lesson is hard to miss: a municipality that bent a rule for someone else years ago is not obligated to bend it again, and the Constitution does not require otherwise.
The remaining claims in the case were settled before trial.
