PENINSULA TOWNSHIP — A group of Northern Michigan wineries and a trade group representing them have filed a federal lawsuit against Peninsula Township alleging that their businesses are losing hundreds of thousands of dollars per year because of the municipality’s unconstitutional ordinances.
In the lawsuit, filed Wednesday in the U.S. District Court for the Western District of Michigan, the Wineries of the Old Mission Peninsula Association and its 11 members said the violation of their constitutional rights is “even more egregious given that (the township’s) own attorney concluded more than a year ago that portions of the Winery Ordinance are unconstitutional.”
Chris Baldyga, co-founder of 2 Lads Winery and president of the association, said the members have been working with township officials over the last two years on a process to modernize the ordinances, but the parties are “still so far apart” that the group needed to take legal action to protect their companies.
“Maybe it’s because we were coming from such old and antiquated laws and any proposed change seemed so radical that talks just broke down,” Baldyga told MiBiz. “We’d love to sit down with them to create a legal framework that allows for the success of all wineries out here, and also improves the climate for new entrants.”
The case alleges that Peninsula Township in Grand Traverse County enacted ordinances that violate free speech protections, illegally restrict commerce and amount to regulatory taking of the plaintiffs’ full use of their property.
According to the filing, the ordinances restrict the types of events that wineries can hold to wine and food cooking classes, meetings of 501(c)(3) nonprofit organizations that are based in Grand Traverse County and meetings of agricultural groups.
The companies allege the township has leveraged the ordinance as a “content-based restriction on speech” that prohibits them from hosting weddings, political fundraisers, family reunions and religious services, among others, in violation of the First and Fourteenth Amendments.
“Peninsula Township has unfettered discretion in interpreting the meaning of the definition of Event and in limiting the number of times that a winery can use its land to engage in certain types of protected speech, including religious and political speech,” the plaintiffs state in the case.
The loss of the business associated with those events costs each of the wineries hundreds of thousands of dollars annually, according to the filing.
Baldyga said other restrictions that tie the number of people a winery can host at each event to it growing 1.25 tons of fruit in the township or buying that amount from other farmers in the township make it impossible to plan ahead, so most wineries eschew offering their space for events. However, being able to host even small-scale events throughout the year would help even out some of the seasonality of the winery business.
“Not that the profitability of wineries is based on events, but it sure as hell helps to flesh out those activities in terms of profitability throughout the year,” he said.
In other instances, the township attempts to regulate the wineries in a manner that is preempted by the Michigan Liquor Control Code, according to the filing. That includes mandating that wineries close by 9:30 p.m., prohibiting amplified music, barring wineries from operating restaurants and banning the use of their kitchens for catering services.
“The rural character of Old Mission Peninsula is superb, and we don’t want to see that change. I don’t think you’ll see us operating our tasting rooms until 2 a.m., but even to have a family reunion or wedding reception from 7 p.m. to 10 p.m. is something we want,” Baldyga said. “It’s not that we want to have rock concerts until midnight, but we want what they can do in Leelanau or Benzie counties. They’re more attractive places to start a winery because of how much more open they are.”
Other allegedly unconstitutional provisions in the ordinances include forcing wineries to promote Peninsula Township agriculture and limiting merchandise only to products “directly related to the consumption and use of fresh and/or processed agricultural produce,” not items such as T-shirts, coffee cups or bumper stickers.
As well, the plaintiffs allege that restrictions that they can sell only Old Mission Peninsula appellation wine restricts their ability to buy grapes from outside the region or from out of state growers, in violation of the Commerce Clause.
In addition to 2 Lads, other wineries joining in the case include Bowers Harbor Vineyard & Winery Inc., Brys Winery LLC, Chateau Grand Traverse Ltd., Chateau Chantal, Peninsula Cellars, Hawthorne Vineyards, Bonobo Winery, Tabone Vineyards LLC, Black Star Farms LLC and Mari Vineyard.
Township officials were not immediately available for comment.
The 10-count lawsuit seeks a judgment declaring the winery ordinances violate the U.S. Constitution and asks the court to prevent the township from enforcing the ordinances while the case is pending. They also seek monetary damages and for the court to award plaintiffs for “reasonable costs, including attorneys’ fees, incurred in bringing this action.”
The wineries are represented by attorneys at the Grand Rapids office of Miller, Canfield, Paddock and Stone PLC.
Baldyga said the wineries are ready to come to the table with the township and continue the conversation and hope for a quick resolution.
“The farms that are here just want to maintain production and continue to grow,” he said. “They want to plant more vines, make sure they’re on stable footing and have the ability to compete with the other counties and regions.”
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