Frankenmuth's Walmart Block Cost the City $3.7 Million

The Loesel family owned a 37-acre tract just outside Frankenmuth, Michigan. In 2005 they signed a conditional agreement to sell roughly 23 acres to Walmart for nearly $3 million. Before the deal closed, city officials learned of the planned sale and passed an ordinance capping new retail buildings at 65,000 square feet, a limit that made a Walmart supercenter impossible. Walmart cancelled, and the Loesels were left holding land they could no longer sell at the agreed price.

The family sued the city under 42 U.S.C. Section 1983, arguing the size cap was enacted specifically to target their property and deny them the same treatment given to other landowners. Andrew Kochanowski of Sommers Schwartz, P.C. handled the case for the Loesels.

The first trial, held in the Eastern District of Michigan in early 2010, ended with a jury awarding the Loesels $3.6 million. The city appealed, and the Sixth Circuit reversed in August 2012, finding the jury instructions may have allowed a verdict on an improperly framed animus theory. The case went back for retrial.

At the second trial in March 2014, a new jury returned a verdict of $3.8 million. With years of accrued interest and attorneys' fees added, the total liability exposure climbed to roughly $5 million by mid-2014. Facing that exposure and the prospect of continued appellate litigation, Frankenmuth agreed to a $3.7 million settlement. The agreement was filed in Bay City federal court on November 12, 2014, and closed the case with no further appeals.