The United States Court of Appeals for the Sixth Circuit recently held that a trial court in Ohio had jurisdiction to determine whether the City of Dayton, was estopped from refusing to approve Waste Management of Ohio's (WMO) construction of buildings on the south side of landfill property, instead of the west side, as originally designated in a consent decree between the parties. The Sixth Circuit Court's decision reverses a ruling by the United States District Court for the Southern District of Ohio holding that the district court lacked subject matter jurisdiction to address the dispute.
In February 1991, a lawsuit in the Southern District of Ohio arose between WMO and the City of Dayton (City) regarding the City's denial of WMO's request to rezone a large tract of land on the west side of Dayton from single-family residential to industrial. The rezoning was necessary for WMO to develop and operate a sanitary landfill on the rezoned property. A settlement agreement was entered between the parties, which contained a development plan for the landfill, referred to as "PD-69." The settlement agreement and development plan were subsequently incorporated into a consent decree that was entered and approved by the district court on April 16, 1992.
In 1994, WMO, as part of the process for obtaining the final permits required for construction of the landfill, submitted an Overall Site Plan containing design and construction requirements that relocated building and support facilities on the west side of Dayton, instead of the south side, as provided in the consent decree. WMO then proceeded under the Dayton Zoning Code to seek approval of the relocation, which was denied by the Dayton City Commission. The City later filed a motion for an order releasing funds that had been placed in escrow pending resolution of other disputes between it and WMO. WMO then objected to the release of funds, claiming that the City had breached the settlement agreement and consent decree by changing its position regarding the location of the landfill buildings, and that the City was estopped from doing so under the terms of the agreement. The district court dismissed WMO's claim, ruling that the court lacked subject matter jurisdiction to address whether the City was estopped from changing its position. Under the principle of estoppel, a person that states its position on an issue may be prohibited from changing that position if another person has acted in reliance on the first person's position, and a change in that position would harm the other person.
WMO appealed. On appeal, WMO argued that the district court possessed subject matter jurisdiction over the dispute because the consent decree states that the district court "retains jurisdiction over this cause for all purposes" and that either party may "move [the district court] for clarification of th[e] Decree and for supplemental or corrective relief in addition to and/or in lieu of any and all remedies provided for in the aforementioned Settlement Agreement." The City, on the other hand, argued that the district court may not consider whether the principle of estoppel has made a requirement of a consent decree unenforceable.
The Sixth Circuit, in rejecting the City's arguments, held that the consent decree gave the district court jurisdiction over the settlement agreement and consent decree, and WMO's claims that estoppel altered the City's obligations and duties under the consent decree is an issue that concerns the settlement agreement's and consent decree's terms. Further, the Sixth Circuit agreed with WMO that the district court also has inherent subject matter jurisdiction over the dispute because courts have a duty to enforce, interpret, modify and terminate consent decrees as required under the circumstances. Without reaching the merits of WMO's underlying claim, the Sixth Circuit reversed the judgement of the district court on lack of jurisdiction and remanded the case for further proceedings. Waste Management of Ohio v. City of Dayton, No. 96-3977, 132 F.3d 1142 (6th Cir. Dec. 23, 1997).
*article courtesy of Daniella D. Landers of Katten Muchin Rosenman LLP.