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Rogers Group, Inc v. City of Fayetteville

December 27, 2010

ROGERS GROUP, INC., APPELLEE,
v.
CITY OF FAYETTEVILLE, ARKANSAS, APPELLANT.



Appeal from the United States District Court for the Western District of Arkansas.

The opinion of the court was delivered by: Smith, Circuit Judge.

Submitted: September 21, 2010

Before BYE, BEAM, and SMITH, Circuit Judges.

Rogers Group, Inc. ("Rogers Group") brought suit in district court*fn1 against the City of Fayetteville, Arkansas, ("the City") seeking to prevent the enforcement of the City's ordinance regulating rock quarries in or near the City's corporate limits. The complaint alleged that the City lacked authority to license and regulate Rogers Group's quarry. Rogers Group moved for a preliminary injunction to enjoin the ordinance prior to its enforcement date, and the district court granted the preliminary injunction. On appeal, the City argues that the district court erred in granting the preliminary injunction. We affirm.

I. Background

Rogers Group operates a limestone quarry ("the Quarry") in an unincorporated section of Washington County, Arkansas. It began leasing the Quarry in February 2007. The Quarry is located entirely outside, but within one mile of, the corporate limits of the City. Rogers Group operates the Quarry pursuant to air and water quality permits issued by the Arkansas Department of Environmental Quality and additional permits issued by the Federal Mine Safety and Health Administration. Rogers Group also operates the Quarry as a pre-existing, nonconforming use under Washington County's zoning ordinance. The Quarry is not located within the City's planning or zoning authority.

In early 2009, the City, responding to noise and vibration complaints from citizens living near rock quarries, began considering an ordinance to regulate and license rock quarries operating in or near the City's corporate limits. Although Rogers Group maintains that it never agreed to be regulated by the City and consistently denied that the City had jurisdiction over the Quarry, it participated in the City's ordinance drafting discussions and meetings. In fact, the City incorporated a number of Rogers Group's recommendations into the proposed ordinance. On October 20, 2009, the Fayetteville City Council passed Ordinance No. 5280, entitled "AN ORDINANCE TO PREVENT INJURY OR ANNOYANCE WITHIN THE CORPORATE LIMITS OF FAYETTEVILLE BY REGULATING ROCK QUARRYING FACILITIES SO THAT THESE FACILITIES WILL NOT BE NUISANCES" ("the Ordinance").

The Ordinance provides for the licensing and regulation of rock quarries. It purports to find that "the operation of a rock quarry would be a nuisance to the citizens and City of Fayetteville, Arkansas[,] if operated or used other than as prescribed in [the Ordinance]." Thus, in order to operate a rock quarry within the City or one mile beyond the City's corporate limits, a quarry operator must obtain a license from the City after demonstrating its full compliance with all requirements of the Ordinance. The Ordinance limits quarry operations to a total of 60 hours per week and allows "major noise producing activities"*fn2 only between 8:30 a.m. and 4:30 p.m., Monday through Friday. Further, the Ordinance restricts rock blasting to a five-hour period on the first and third Wednesday of each month. In addition, a quarry must comply with several "safeguards and measures" to protect the City's roads from all vehicles, regardless of ownership, exiting the quarry.*fn3 An "operator, manager, or employee" of a quarry subject to the Ordinance may face criminal punishment for violating the Ordinance, and the quarry may have its license suspended or revoked for multiple violations. In addition, the City may fine the quarry for each violation of the operational hour and rock blasting restrictions.

At the preliminary injunction hearing, Darin Matson, Rogers Group's Vice President of Aggregate Operations, testified that Rogers Group would lose approximately $13,000 per week under the Ordinance's restrictions. Matson conceded that the Ordinance's blasting restrictions reflect the frequency of Rogers Group's current blasting operations. Nevertheless, Matson believed the blasting restrictions would limit Rogers Group's ability to bid on and meet larger customer orders. This restricted bid ability, in turn, would hinder its competitiveness in the Northwest Arkansas market. Matson also testified that the Ordinance would restrict Rogers Group's ability to expand the Quarry. He considered future expansion necessary for the Quarry's long-term viability. Matson further stated that Rogers Group would have difficulty restoring its customer base upon reopening if the City closed the Quarry for violating the ordinance.

II. Discussion

"We review the district court's grant of a preliminary injunction for abuse of discretion, giving deference to the discretion of the district court." Vonage Holdings Corp. v. Neb. Pub. Serv. Comm'n, 564 F.3d 900, 904 (8th Cir. 2009). "An abuse of discretion occurs if the district court rests its conclusion on clearly erroneous factual findings or if its decision relies on erroneous legal conclusions." Id. In determining whether to issue a preliminary injunction, the district court must consider the following factors: (1) the threat of irreparable harm to the movant; (2) the state of balance between this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public interest.

Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc). On appeal, the City argues that the district court erred in granting the preliminary injunction for two reasons: (1) the City had jurisdiction to regulate the Quarry within one mile of its corporate limits, making it unlikely that Rogers Group would succeed on the merits; and (2) Rogers Group did not show that it would suffer irreparable harm if the Ordinance were allowed to go into effect. We review each of these arguments in turn.

A. Probability of Success on the Merits

The City first contends that Rogers Group is unlikely to succeed on the merits of its suit to enjoin the enforcement of the Ordinance. The City argues that it possessed statutory authority to regulate the Quarry because it enacted the Ordinance pursuant to Arkansas Code Annotated § 14-54-103(1). Under this statute, the City contends that it has broad regulatory authority both within and one mile beyond its corporate limits. Under the statute, the City's police power to abate a nuisance extends one mile beyond its corporate limits. Rock quarries, however, are not nuisances per se and normally, like other activities, must be declared so after a judicial determination. See, e.g., Hackler v. City of Fort Smith, 377 S.W.2d 875, 875--77 (Ark. 1964). The City maintains that Arkansas law authorizes a city to exercise its broad regulatory power under ยง 14-54-103(1) to abate ...


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