Easthampton Savings Bank v. City of Springfield
21 N.E.3d 922
Mass.2014Background
- Springfield enacted two 2011 ordinances responding to post-2008 foreclosure-related blight: a mandatory mediation ordinance (Chapter 7.60) and a vacant/foreclosing-property maintenance/registration ordinance (Chapter 7.50).
- Mediation ordinance: requires mediation within 45 days after notice of default; mortgagees must obtain a city certificate of compliance or face $300/day fines; failure prevents proceeding to foreclosure under the ordinance.
- Foreclosure ordinance: requires owners (expressly including mortgagees who have "initiated" foreclosure or who have contractually authorized entry to repair) to register vacant/foreclosing properties, meet maintenance standards, post a $10,000 bond, obtain a city compliance certificate, and faces $300/day fines and possible city entry to cure and lien recovery.
- Six mortgagee-plaintiffs sued seeking declaratory/injunctive relief; federal district court upheld the ordinances; the First Circuit certified questions of Massachusetts law to the SJC.
- SJC framed issues as whether each ordinance is preempted by state law (G. L. c. 244; G. L. c. 21E; G. L. c. 111/statutory sanitary code) and whether the foreclosure registration charge is an unlawful tax.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the mediation ordinance is preempted by G. L. c. 244 (foreclosure statute) | Mediation ordinance conflicts with state foreclosure scheme and frustrates statutory scheme; state intended to occupy the field | Ordinance complements state law and can be complied with alongside it | Held: Mediation ordinance is preempted by G. L. c. 244 (invalid) |
| Whether the foreclosure/maintenance ordinance is preempted by G. L. c. 244 | Foreclosure ordinance intrudes on state foreclosure process | Ordinance does not affect statutory foreclosure procedures and avoids conflicts by its terms | Held: Not preempted by G. L. c. 244 (ordinance does not alter foreclosure procedures) |
| Whether the foreclosure/maintenance ordinance is preempted by G. L. c. 21E (OHMRPA) | Ordinance forces mortgagees to enter/possess and thereby can strip statutory lender safe-harbor from hazardous-release liability | City contends ordinance excludes persons exempted by state law and so does not conflict | Held: Preempted by G. L. c. 21E (OHMRPA) because state comprehensively occupies hazardous-release liability and protects secured lenders from being treated as owners absent possession/abandonment |
| Whether the foreclosure/maintenance ordinance conflicts with G. L. c. 111 and the State sanitary code | Ordinance imposes bond posting, immediate entry and administrative bond drawdown that conflict with the code's enforcement scheme (orders, court remedies, receiver rules, bond limited to receivers) | City relies on local police powers and argues complementary enforcement | Held: Preempted by G. L. c. 111 / State sanitary code (conflicts with the code's remedies and bonding scheme) |
| Whether the foreclosure registration charge is an unlawful tax | The charge is a tax raising revenue and lacks statutory authorization | City characterizes the exaction as a regulatory fee tied to particularized services and enforcement costs | Held: The charge is a lawful regulatory fee (not a tax), but the court did not decide whether the precise amount is reasonable or whether the city had statutory authority beyond assuming it existed |
Key Cases Cited
- Wendell v. Attorney Gen., 394 Mass. 518 (inference of preemption where legislative intent occupies field)
- Bloom v. Worcester, 363 Mass. 136 (need for "sharp conflict" to invalidate local law)
- Grace v. Brookline, 379 Mass. 43 (statutory purpose frustrated by local law supports preemption)
- BFP v. Resolution Trust Corp., 511 U.S. 531 (foreclosure traditionally a state function)
- Taygeta Corp. v. Varian Assocs., 436 Mass. 217 (OHMRPA is comprehensive and preemptive)
- Perez v. Boston Hous. Auth., 379 Mass. 703 (appointment of receiver under sanitary code is extraordinary/remedial)
- Emerson College v. Boston, 391 Mass. 415 (distinguishing fees from taxes; particularized benefit test)
- Doe, Sex Offender Registry Bd. No. 10800 v. Sex Offender Registry Bd., 459 Mass. 603 (regulatory-fee framework and factors)
- Silva v. Attleboro, 454 Mass. 165 (lesser weight to voluntariness in regulatory-fee analysis)
- Nuclear Metals, Inc. v. Low-Level Waste Mgt. Bd., 421 Mass. 196 (regulatory fees defraying costs of regulatory scheme)
- Boston Gas Co. v. Newton, 425 Mass. 697 (local regulation conflicting with comprehensive state scheme is invalid)