Collecting Civil Penalties: Follow Requisite Procedures or Collect Nothing
The recent Appeals Court case of Maroney v. Planning Board of Haverhill, 19-P-566 (Appeals Court June 15, 2020) highlights the pitfalls for municipalities that seek to collect civil penalties for bylaw or statutory violations without following all necessary steps. The building inspector of the City of Haverhill had an ongoing issue with a developer of a 55-unit subdivision. The building department issued several building permits but subsequently refused to issue building permits and issued cease and desist letters threatening imposition of monetary penalties if a condition of the development’s special permit was not fulfilled.
The developer filed suit in Superior Court to compel issuance of the building permits, and the building inspector filed a counterclaim seeking to collect civil penalties under three different provisions of the law: The local City ordinance, M.G.L. c. 40, § 21D, and the State building code M.G.L. c. 148A, § 2. The building inspector prevailed at Superior Court , but the Appeals Court ruled against the building inspector on all three grounds:
The Court ruled that M.G.L. c.40A, §7 gives municipalities the authority to impose penalties, but only pursuant to the process set out in Burlington Sand and Gravel, Inc. v. Harvard, 31 Mass. App. Ct. 261 (1991), which requires either that the municipality file a lawsuit for injunctive relief in Superior Court or file a criminal complaint in District Court or Superior Court pursuant to M.G.L. c. 40, § 21. Burlington Sand and Gravel does not allow for collection via counterclaim, as the City had attempted here.
If provided by bylaw or ordinance, the procedures for noncriminal disposition pursuant to M.G.L. c. 40, § 21D may also be followed. In this case, the City never sent the developer the required notice under Section 21D of the amount of the penalty and the option to pay in lieu of appearing in District Court.
The reliance on the State building code was similarly unavailing. M.G.L. c. 148A, § 2 requires that the municipality provide notice to the offender of the specific code violations, the amount of the assessed penalty, and the option to pay in lieu of appearing before the municipal hearing officer. The cease and desist letters that the City relied upon for notice did not specify the amount of the fine, nor did they inform him of his right to pay or seek a hearing.
Dracut appealed the arbitrator’s award to Superior Court. The Superior Court vacated the arbitrator’s award on the ground that the award exceeded the arbitrator’s authority by “infringing on the nondelegable authority of the fire chief” to manage the Department and make decisions regarding public safety. The Appeals Court, however, reversed the Superior Court’s decision. It recognized that the non-delegable authority doctrine requires that some issues be “reserved to the sole discretion of the public employer so as to preserve the intended role of the governmental agency and its accountability….” With respect to the Fire Chief, the Appeals Court acknowledged that M.G.L. c.48, §42 (the “strong Fire Chief” statute) grants fire chiefs “full and absolute authority in the administration of the department,” including the authority to make all “rules and regulations for [the Department’s] operations….” The Court was not persuaded, however, that this authority was sufficient to permit a change of policy with respect to attendance at union meetings without bargaining.
The decision does include one silver lining for municipalities. The counterclaim sought assessment of civil penalties for illegal activity from the date that it began until the date he stopped upon receipt of the letters. The Appeals Court stated that it was not ruling that a municipality could never collect penalties retroactively, that is, to the time before the offender is told to stop.
We assume, although we need not decide, that fines may be imposed for actions that took place prior to the issuance of a notice or cease and desist order. A person should not be able to violate the State building code and local bylaws without risk of civil penalty, so long as they fall into line once they are caught. The extent to which such retrospective fines can be imposed on a daily basis, as the city attempted to do here – and if so, for how far into the past – are questions for another day. All we hold here is that the city did not follow the necessary procedures to impose the fines at issue.