A tiny township that juts into Grand Traverse Bay might have to sell assets like the well-known Mission Point Lighthouse - and make massive budget cuts. Residents could also be required to pay a special assessment to pay the judgment.
That's after eleven Peninsula Township wineries won a $50-million lawsuit against the township.
Attorney Steve Ragatzki of the Miller Canfield law firm represents the wineries.
He said for many years, the township wouldn't let them host weddings and other events, conduct off-site catering, advertise wine tastings, or sell non-wine merchandise like branded t-shirts. They were also not allowed to make wine that includes more than 15% of non-township grown grapes.
Ragatzki said the restrictions were unfair and unlawful, and wineries had been asking for permits for decades from a succession of township zoning officers, to no avail.
"Over and over and over again the wineries tried to do things, and over and over and over again the township zoning officer said no. He didn't say why it was no. It was just "no."
Ragatzki said the wineries eventually felt they had no choice but to sue. That was after an attorney sent a demand letter to the township.
"The township attorney agreed! He agreed there were issues with their ordinance — and the township board still wouldn't do anything," Ragatzki said.
Township officials said their winery ordinance was designed to balance the rights of the wineries with the right of residents to enjoy the peace and quiet of the region.
After an eleven day trial, federal district court judge Paul L. Maloney struck down the majority of the township's restrictions against the wineries.
He said the ordinance restrictions violated the wineries' constitutionally protected rights, including free speech rights. Maloney said the township also violated a provision of the Commerce Clause, the Dormant Commerce Clause, which prohibits state legislation that discriminates against, or unduly burdens, interstate commerce.
In his order of judgment, Maloney noted he Township did not call a single fact witness. He included this trial testimony in his order of judgment, as a way to capture what wineries had been dealing with:
Q: [Plaintiffs' attorney] Was Chateau Grand Traverse ever the subject of potential enforcement action by Peninsula Township?
A. [Winery owner] Yes.
Q. What happened?
A. It’s an unfortunate event, but we were -- my wife and I were very involved in resurrecting the local elementary school that was going to be shut down by the public school system. And one of the teachers that was there . . .was a beloved first grade teacher who had breast cancer. And she was Stage 4,
and we decided that we were going to throw a fundraiser for her, that a hundred percent of the proceeds from the sale of our wine tasting room at an event at our winery would go to her directly. And the day of the event, I got a phone call, which again, I’ve never really received any sort of a phone call before on something like this. And it was from -- I believe she was the Township clerk. It was Joanne Westphal.
And she called me up and said, “I see you’re having an event at your winery tonight and you don’t have a permit.” I said, “To the best of my knowledge, I do not require a permit if the event is not going to exceed 75 people.” And she said, “Oh, is that so?” And I go, “Yes, that is so. And I suggest before you call and make a threatening act on me, that you familiarize yourself with our SUP.” And she goes, “Well, we’ll see about that.” And it just struck a chord in me that this was a -- really, a non-concerning event, and I got in my car. It’s only a mile down the road to the Township. I drove down to the Township and I said, “I would like to see Ms. Westphal.” And the lady at the counter said -- went in the back room, talked to her for a little bit, came back out and said, “Ms. Westphal says you need to make an appointment to see her.”
And I said, probably in a little bit of a heated way, another word for posterior, to have her please step out of her office. And I said, “You can’t make a threatening act like that when it’s unenforceable and you do not understand your own rules.” And I just said, “We are holding our event tonight. It’s within the realm of what I can do as a winery.” And I said – that’s
where I left it. And she said, “If it exceeds 75 people, we will know about it.”
So it was implied that -- well, you can take the implication however you want, but it was a very -- like, wow, we are going to be counting cars and numbers.
Needless to say, I think the event was maybe 50 people, and it went off successfully.
Peninsula Township has appealed the judgment to the 6th Circuit Court of Appeals.
Township officials did not respond to multiple requests for comment. A published agenda says they will be discussing ways to pay the judgement at the August 12th Board meeting.
