Arkona, LLC v. Cheboygan, County of et al
Filing
48
OPINION and ORDER Granting in Part Plaintiff's 45 Motion to Lift Stay and Directing Parties to Appear for Scheduling Conference. (IN-PERSON Scheduling Conference set for 5/10/2022 at 10:00 AM before District Judge Thomas L. Ludington. ) Signed by District Judge Thomas L. Ludington. (KWin)
Case 1:19-cv-12372-TLL-PTM ECF No. 48, PageID.967 Filed 05/09/22 Page 1 of 3
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
ARKONA LLC and DIANNE KASBOB,
on behalf of themselves and all others
similarly situated,
Plaintiffs,
v.
Case No. 1:19-cv-12372
Honorable Thomas L. Ludington
United States District Judge
COUNTY OF CHEBOYGAN and COUNTY
OF MONROE,
Defendants.
_______________________________________/
OPINION AND ORDER GRANTING IN PART PLAINTIFFS’ MOTION TO LIFT
STAY AND DIRECTING PARTIES TO APPEAR FOR SCHEDULING CONFERENCE
This is a class action brought under 42 U.S.C. § 1983 to recover the surplus proceeds from
tax-foreclosure sales conducted in two Michigan counties.
In June 2021, the case was stayed pending the disposition of a set of cross-appeals in Freed
v. Thomas, Nos. 21-1248/21-1288/21-1339 (6th Cir. 2021). Freed is set to decide at least two
issues relevant to this case: (1) whether tax-equity claimants may hold Michigan counties liable
under Monell v. Department of Social Services of City of New York,1 and (2) whether just
compensation under the Fourteenth Amendment equals the surplus proceeds of the foreclosure
sale (i.e., the difference between the delinquent taxes and the sale price) or the “lost equity” in the
property (i.e., the difference between the delinquent taxes and the fair-market value). See Br. for
Def.-Appellee Michelle Thomas and Def.-Appellee/Cross-Appellant County of Gratiot at 3, Freed
v. Thomas, Nos. 21-1248/21-1288 (6th Cir. Mar. 7, 2022).
1
436 U.S. 658 (1978).
Case 1:19-cv-12372-TLL-PTM ECF No. 48, PageID.968 Filed 05/09/22 Page 2 of 3
Recently, in a similar case pending before this Court, the Sixth Circuit held that sovereign
immunity does not shield Michigan counties from tax-equity actions brought under § 1983. See
Fox v. Saginaw Cnty. ex rel. Bd. of Commissioners, No. 21-1108, 2022 WL 523023, at *4–6. (6th
Cir. Feb. 22, 2022). Although the Sixth Circuit expressly declined to reach the Monell issue due
to lack of jurisdiction, its rationale for denying sovereign immunity seems to favor Monell liability.
See id. at *6 (“The counties were not required to act as an FGU or to foreclose on any given
property, and yet they chose to do so.”); Westmoreland v. Butler Cnty., 29 F.4th 721, 730 (6th Cir.
2022) (“Under Monell, a municipality can be liable under § 1983 when an official ‘policy or
custom’ caused a violation of the plaintiff's constitutional rights.” (quoting Monell, 436 U.S. at
694)).
Given the Sixth Circuit’s recent decision, Plaintiffs have filed a motion to lift the stay,
arguing that the equities now favor issuing class notice and completing discovery. See ECF No.
45 at PageID.946 (noting that “Freed has been pending for more than a year at the Sixth Circuit
and even the State of Michigan . . . has argued that the counties are at least liable as to surplus
proceeds”). Plaintiffs also seek to compel the parties to attend a scheduling conference that will be
held in Fox on May 10, 2022.2
Defendants, however, seek to keep the stay in place. ECF No. 47. They note that the Sixth
Circuit remains poised to decide many of the remaining issues in this case, including Monell
liability and the proper measure of compensation. Id. at PageID.959–60.
“The power to stay proceedings is incidental to the power inherent in every court to control
the disposition of the causes in its docket . . . .” FTC v. E.M.A. Nationwide, Inc., 767 F.3d 611,
626–27 (6th Cir. 2014) (quoting Ohio Env’t Council v. U.S. Dist. Ct., 565 F.2d 393, 396 (6th Cir.
2
Counsel in this case is also counsel in Fox.
-2-
Case 1:19-cv-12372-TLL-PTM ECF No. 48, PageID.969 Filed 05/09/22 Page 3 of 3
1977)). “Where the stay motion is premised on the alleged significance of another case’s imminent
disposition, courts have considered the potential dispositive effect of the other case, judicial
economy achieved by awaiting adjudication of the other case, the public welfare, and the relative
hardships to the parties created by withholding judgment.” Caspar v. Snyder, 77 F. Supp. 3d 616,
644 (E.D. Mich. 2015).
To the extent Plaintiffs seek to lift the stay to attend the Fox scheduling conference, their
motion is well founded. This case and Fox present many of the same issues and share some of the
same counsel. For these reasons, allowing counsel to discuss these issues and their
case-management needs at one meeting would serve judicial economy.
To the extent Plaintiffs seek to lift the stay entirely, however, their motion is best addressed
after the scheduling conference. The conference will provide this Court—and the parties—with a
better
understanding
of
the
case,
the
parties’
case-management
needs,
and
the
parties’ “relative hardships.” See Caspar, 77 F. Supp. 3d at 644. The parties might even reach a
scheduling agreement that resolves the stay issue.
Accordingly, it is ORDERED that Plaintiffs’ Motion to Lift the Stay, ECF No. 47, is
GRANTED IN PART and DENIED IN PART. Plaintiffs’ Motion is GRANTED to the extent
they seek to compel the parties to attend the scheduling conference on May 10, 2022. Plaintiffs’
Motion is DENIED WITHOUT PREJUDICE in all other respects.
Further, it is ORDERED that the parties are DIRECTED to appear for a scheduling
conference on May 10, 2022, at 10:00 AM EDT.
Dated: April 14, 2022
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
-3
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?