Easthampton Savings Bank v. City of Springfield, 874 F. Supp. 2d 25

Springfield enacted two 2011 ordinances: Foreclosure Ordinance regulating maintenance of vacant/foreclosing residential properties and a Mediation Ordinance mandating mediation for owner-occupied foreclosures.
Plaintiffs are banks with mortgages in Springfield seeking a declaratory judgment and equitable relief, and they move for judgment as a matter of law while the City cross-moves for dismissal or summary judgment.
Foreclosure Ordinance requires maintenance duties, a cash bond of at least $10,000, and a regulatory database; it defines owner broadly to include mortgagees in foreclosure; enforcement is stayed awaiting procedures.
Mediation Ordinance requires mortgagees foreclosing owner-occupied properties to participate in a city-approved mediation program and to attempt to negotiate a commercially reasonable alternative to foreclosure; if no agreement, mediator certificates the good-faith participation.
The ordinances took effect December 13, 2011, apply to mortgages existing as of that date, and the court ultimately denies Plaintiffs’ motion and grants Defendant’s cross-motion for dismissal/summary judgment; the decision addresses preemption, Contracts Clause, and tax/fee issues, among others.
The court additionally considers ripeness and notes the case is ripe for adjudication despite no enforcement scheme having been implemented yet.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Preemption by state law	Plaintiffs contend both ordinances are implicitly preempted by Chapter 244.	Defendants argue no sharp conflict with state law and local rules can coexist with state foreclosure statutes.	No preemption; no sharp conflict.
Contracts Clause violation	Foreclosure Ordinance substantially impairs contractual relations between banks and mortgagors.	Ordinance serves important public purpose and is reasonably tailored.	No Contracts Clause violation.
Unlawful tax vs regulatory fee	Cash bond is an unlawful tax because part funds general foreclosure efforts.	Bond is a regulatory fee balancing costs of regulation and benefits to the public.	Bond constitutes regulatory fee, not a tax.
Other constitutional claims ( vagueness, takings, due process)	Ordinances are vague and/or violate takings and due process.	Regulations are reasonably tailored to public health and safety objectives; no taking or due process violation.	Claims lack merit; denial of relief on these grounds.

Bloom v. City of Worcester, 363 Mass. 136 (Mass. 1973) (latitude to municipalities; no sharp conflict with state law)
Grace v. Town of Brookline, 379 Mass. 43 (Mass. 1979) (sharp conflict standard for preemption)
Fortuno v. United Auto.,, Aerospace, Agric. Implement Workers, 633 F.3d 37 (1st Cir. 2011) (substantial impairment inquiry; reasonableness/necessity test)
U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (U.S. 1977) (economic regulation deference to legislative judgment)
Emerson College v. City of Boston, 391 Mass. 415 (Mass. 1984) (tax vs regulatory fee distinction; regulatory framework costs)
Silva v. City of Attleboro, 454 Mass. 165 (Mass. 2009) (fee characterization; limited benefit to the payer; regulatory scheme costs)