544 F.3d 1201 (11th Cir. 2008), 07-14761, Schwarz v. City of Treasure Island

Docket Nº:07-14761.
Citation:544 F.3d 1201
Party Name:Matthew SCHWARZ, Gulf Coast Recovery, Inc., a Florida corporation, Plaintiffs-Defendants-Cross-Claimants-Appellants, John Doe I, Jane Doe V, anonymous individuals, Plaintiffs-Appellants, v. CITY OF TREASURE ISLAND, Defendant-Plaintiff-Cross-Defendant-Appellee, City of Treasure Island Code Enforcement Board, Defendant-Appellee.
Case Date:October 08, 2008
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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544 F.3d 1201 (11th Cir. 2008)

Matthew SCHWARZ, Gulf Coast Recovery, Inc., a Florida corporation, Plaintiffs-Defendants-Cross-Claimants-Appellants,

John Doe I, Jane Doe V, anonymous individuals, Plaintiffs-Appellants,


CITY OF TREASURE ISLAND, Defendant-Plaintiff-Cross-Defendant-Appellee,

City of Treasure Island Code Enforcement Board, Defendant-Appellee.

No. 07-14761.

United States Court of Appeals, Eleventh Circuit.

October 8, 2008

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Ethan J. Loeb, David Smolker, Bricklemyer, Smolker & Bolves, P.A., Tampa, FL, for Appellants.

Jean-Paul Daigneault, James L. Yacavone, III, Frazer, Hubbard, Brandt, Trask & Yacavone, LLP, Dunedin, FL, for Appellees.

John P. Relman, Relman & Associates, Washington, DC, for Amicus Curiae.

Appeal from the United States District Court for the Middle District of Florida.

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Before CARNES and MARCUS, Circuit Judges, and DUBOSE, [*] District Judge

MARCUS, Circuit Judge:

Gulf Coast Recovery, Inc. and its principal, Matthew Schwarz, operate six halfway houses for recovering substance abusers in the City of Treasure Island, Florida. Following complaints from neighbors about excessive noise, constant turnover, and the use of the properties for recovering addicts, the City investigated one of the houses and cited Schwarz for violating a City zoning ordinance that limited occupancy turnover. The City's Code Enforcement Board upheld the citation after a public hearing. The Board then socked Schwarz with a $250 per day fine for that house. Thereafter, the City cited two more houses for violating the same ordinance.

Rather than appeal the Board's decisions in state court, Schwarz, Gulf Coast Recovery, Inc., and several John and Jane Does residing in the houses (collectively “ Gulf Coast" ) sued Treasure Island and the Board (collectively “ the City" ) in federal court. They alleged that enforcement of the occupancy-turnover rule against the halfway houses amounted to disparate treatment, disparate impact, and a failure to reasonably accommodate the disabled under the Fair Housing Act (“ FHA" ), 42 U.S.C. § 3601 et seq. , the Americans with Disabilities Act (“ ADA" ), 42 U.S.C. § 12101 et seq. , and the Rehabilitation Act (“ RA" ), 29 U.S.C. § 701 et seq. , and violated the equal protection clauses of the Federal and Florida Constitutions. For good measure, Gulf Coast also claimed that the hearings conducted before the Board violated Schwarz's right to due process under the Federal and Florida Constitutions. After denying Gulf Coast's request to supplement its amended complaint to add an unrelated claim, the district court granted final summary judgment to the City. See Schwarz v. City of Treasure Island, 521 F.Supp.2d 1307 (M.D.Fla.2007). Gulf Coast appeals from the denial of leave to supplement and the entry of final summary judgment.

Although we agree with nearly all of the district court's conclusions, we differ in one important respect: on this record, we cannot determine whether Treasure Island must accommodate four of the six halfway houses because a genuine issue of material fact may exist about whether living in the halfway houses is “ necessary" to afford recovering substance abusers an “ equal opportunity to use and enjoy" the halfway houses. 42 U.S.C. § 3604(f)(3)(B). Accordingly, we affirm the district court's denial of leave to supplement and its order of summary judgment on all but the reasonable accommodation claim, which we remand for further proceedings consistent with this opinion.


We begin with the essential undisputed facts and procedural history. The City of Treasure Island is a small coastal community on Florida's Gulf Coast. Treasure Island has only 7,500 permanent residents, but during tourist season the area's warm sun, soft sand, and gentle surf draw vacationers and snowbirds by the thousands, doubling the City's winter population. Although these visitors are surely a boon to Treasure Island's business community, housing them in the City's residential areas disrupts the sense of community and stability treasured by the City's permanent residents.

To deal with this difficult problem, Treasure Island's zoning scheme divides residences

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into residential dwellings and tourist dwellings, and forbids the latter in its lowest density zoning districts. Under the City's Code of Ordinances, a “ [d]welling, residential" “ means a single-family, two-family, or multiple-family dwelling which is not a tourist dwelling." Code of Ordinances of the City of Treasure Island, Florida § 68-2 (1997) (hereinafter “ Code" ). A “ tourist dwelling," in turn, “ means a single-family or two-family dwelling which is used ... primarily on a daily, weekly, monthly or seasonal basis ...." Id. 1 Tourist dwellings are permitted uses in the three highest density districts-RFM-30, RFH-50, and CG-but forbidden in the RU-75 and RM-15 districts. By barring tourist dwellings in the RU-75 and RM-15 districts, the City has created a limit on the number of times a “ single-family or two-family dwelling" can change occupancy during a twelve-month period in those districts. For convenience, we refer to this limitation embodied in the definition of “ tourist dwelling" as the “ occupancy-turnover rule."

The RU-75 and RM-15 districts are not identical. For our purposes, the main difference between them is that only single-family residential dwellings are permitted in RU-75 districts, while RM-15 districts allow any type of residential dwelling, including multi-family dwellings, such as apartment buildings and condominium complexes.

The application of this zoning scheme, and in particular the application of the occupancy-turnover rule, to Schwarz and his company, Gulf Coast Recovery, is at the heart of this lawsuit. Gulf Coast Recovery is licensed by the Florida Department of Children and Families to provide outpatient rehabilitation services to recovering drug and alcohol abusers at its treatment facility in Treasure Island. Notably, the company's license does not allow it to provide in-patient or residential treatment. As a result, clients must find other accommodations while receiving treatment.

To meet their clients' housing needs, Schwarz and Gulf Coast Recovery own or lease six single- or multi-family properties in Treasure Island. Four of the properties are zoned RM-15, and two are zoned RU-75. Descriptions of the properties and their immediate surroundings are set out in the margin.2

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Although Gulf Coast cannot provide any formal rehabilitation treatment at these properties because it does not have an in-patient license, only clients enrolled in Gulf Coast's treatment programs may move in to them. But residents may stay as long as they wish after completing their outpatient treatment. Clients opting to live in these halfway houses sign short-term leases with Schwarz or Gulf Coast, and generally pay between $1,000 and $2,000 per month to lease a single bedroom. Tenants are required to remain sober and drug-free and to refrain from various other activities while living in the properties. Incorporated into the leases as “ Property Rules," these restrictions include: (1) not consuming drugs or alcohol; (2) not viewing pornography; (3) not possessing weapons; (4) agreeing to maintain the property; and (5) not having overnight guests without the permission of Gulf Coast Recovery.

Because neither Schwarz nor any Gulf Coast counselor lives at any of the properties, primary responsibility for enforcing the rules falls on the tenants, who have a powerful interest in not being exposed to drugs or alcohol during their rehabilitation. Schwarz furnishes each property and provides food, but the residents prepare their own meals, clean up after themselves, do their own laundry, and socialize together in their free time. Although some residents have stayed as long as five months, most residents leave after completing their outpatient treatment, and the average stay is six to ten weeks.

Schwarz and the City of Treasure Island first began to butt heads in late 2004 after neighbors of two of the properties-12305 3rd Street East and 10214 Tarpon Drive-complained about excessive noise and constant turnover, and told the City that the properties were being used as rehabilitation facilities for recovering substance abusers. On December 13, 2004, Treasure Island sent Schwarz a document entitled “ Code Enforcement Detail" observing that he had “ opened up 2 rehab. houses on the island." Doc. 27, Ex. D. A handwritten note on the bottom of the document reads: “ Please come in A.S.A.P. (5 day) to apply for a license for both your homes. See Peggy." Id. After speaking with his attorney, Schwarz went to City Hall to apply for a rental license. Schwarz met with Peggy Proper, a City employee, who asked him to provide specific information about the properties, including the number of tenants, the amount of turnover, and the length of the leases. After Schwarz refused to provide any of this information, Ms. Proper denied his verbal request for a rental license.

Soon thereafter, City Code Enforcement Officer Carol Kitts sent Schwarz the following letter:

It has come to our attention that you have two rentals in this city being used as boarding, halfway, or other type of

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group home where there are more than three unrelated persons living together. The City of Treasure Island requires that a license be obtained for any type of rental use as mentioned above. Please submit a detailed letter explaining the type of rentals you have, the number of leases in each home, what the lease includes, Re: utilities, food[,] furnishings, rules, and activities which take...

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