IL Court of Appeals Holds Municipal Immunity From Tort Liability in Zoning Cases

This post was originally published in Municipal Minute by Julie Tappendorf, Esq. from Ancel Glink and reposted with permission

At Xochi, LLC v. Galena City, Illinois Court of Appeals found City immune from liability under the Tort Immunity Act for claims relating to zoning approvals relating to cannabis dispensaries and upheld the dismissal of the case against the City.

Xochi owns a building in Galena City that has been approved for lease to Verilife, which intends to operate a cannabis dispensary. Verilife required the City to complete a zoning form to certify that the local zoning would permit a cannabis dispensary on the site, as required by the State of Illinois as part of Verilife’s state license application. Prior to Verilife’s request from the City regarding the form of zoning, the City had provided zoning relief for a competing dispensary operator (Fotis), to operate a cannabis dispensary at a location less than 1500 feet from the Xochi building. The city stated that they did not sign the zoning form for the Verilife facility because the facility is within 1500 feet of the Fotis facility, which is prohibited by state and local laws. After City refused to complete the form, Verilife terminated the lease. Xochi then filed a lawsuit against City, claiming City was negligent in not completing the form, resulting in Xochi losing the financial benefits of the lease with Verilife. The city filed a motion to dismiss, arguing that it is immune from liability under the Tort Immunity Act. The court court ruled in City’s favor and Xochi appealed.

The Court of Appeal did not enter into the merits of Xochi’s claim against City, instead agreeing with the circuit court that Section 2-104 of the Immunity Act precludes City from liability. That section organizes as follows:

Local public bodies shall not be liable for damages caused by the issuance, refusal, suspension, or revocation of, or by failure or refusal to issue, refuse, suspend, or revoke, permits, licenses, certificates, approvals, orders, or similar authorizations where the entity or its employees are empowered by law to determine whether or not such license should be issued, denied, suspended or revoked.

The court found that a simple reading of this Section of the Tort Immunity Act applies because the City’s refusal to sign a zoning form for Verilife constitutes a public entity’s “failure or refusal” to provide “approval… or similar authorization.” As a result, Kota is immune from Xochi’s tort claims and the case is properly dismissed.

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