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Appeals court opinion favors Clipper Mill residents sued by developer after they objected to housing plans

Condominium and townhouse owners in Clipper Mill have the right to publicly oppose future development in their Baltimore community and are protected against lawsuits that aim to censor or intimidate critics, a state appeals court ruled.

A Maryland Court of Special Appeals judge Thursday affirmed a lower court’s decision dismissing a $25 million lawsuit that Clipper Mill’s developer filed against residents who spoke out against more housing.

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“The developer filed the complaint for the improper purpose of deterring the residents and their homeowners’ associations from engaging in protected communications in opposition to development, which is bad faith,” the opinion said. “The developer did not allege any facts showing that the residents acted with constitutional malice.”

The project’s former developer, VS Clipper Mill LLC, filed suit in June 2020 after residents opposed a proposal before city planners seeking a revision to allow 30 townhouses on a parking lot and 98 apartments in an old mill building.

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In December 2020, a Baltimore Circuit Court judge dismissed what he called a “bad faith” lawsuit and questioned whether it was filed in retaliation for residents opposing development plans.

That judge, John S. Nugent, found the complaint violates Maryland’s anti-SLAPP statute, which protects individuals or groups against Strategic Lawsuits Against Public Participation. The law defines such lawsuits as brought in bad faith against those exercising First Amendment rights to challenge or oppose public matters, often before a government body.

VS Clipper Mill had argued that residents and their homeowner associations gave up their legal right to oppose future plans for the Woodberry development along the Jones Falls when they bought their homes. The lawsuit said residents are bound by restrictive covenants in land records.

The appeals court’s opinion said the developer failed to show that residents violated community declarations and that residents had the right to voice public opposition in court and in city government proceedings.

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The appeals court upheld the lower court’s ruling, saying the anti-SLAPP law worked as designed to prevent a lawsuit from “hitting its target of deterring or extinguishing public participation in governmental proceedings in opposition to the plaintiff’s interests.”

Larry Jennings, co-founder and senior managing director of ValStone Partners, which had become the project’s developer in 2017, said Friday that the property and development rights have been sold to Baltimore-based commercial real estate firm MCB Real Estate. Jennings, who previously called opponents to his plans “obstructionists” and said most residents supported the plans, said Friday he had no further comment.

Principals of MCB Woodberry Developer LLC, named the lawsuit’s successor appellant in October, could not be reached on Friday morning.

The attorney representing residents and associations in the lawsuit, including The Council of Unit Owners of The Millrace Condominium and The Homes At Clipper Mill Homeowners’ Association, said Friday the transaction related to the property and development rights occurred sometime in June.

“We do not know the details of the transaction and the extent to which Mr. Jennings is still involved,” said the attorney, Thomas J. Minton.

Minton said his clients, who own or live in condominiums, are relieved by the decision.

“They should not have to face a $25 million lawsuit, and be forced to turn over to the developer all of their business and personal computer and phone records going back several years, and all of their personal financial data, simply because they opposed his revised plan for development in the neighborhood,” Minton said.

It was unclear what the appeals court’s decision would mean for continued redevelopment of the enclave of once-industrial 19th century buildings in the Woodberry neighborhood along the Jones Falls.

The city’s Planning Commission had approved ValStone’s projects, before residents appealed the decision to the Circuit Court, arguing that City Council approval is needed for major changes to the original development plan. Original plans from 2003 envisioned transforming what was once an abandoned mill into a mix of upscale homes, shops and offices, now anchored by the Woodberry Kitchen restaurant.

VS had accused the two community associations and five residents named in the lawsuit of waging an illegal campaign to obstruct development plans, costing the developer millions of dollars in delays and expenses.

John C. Murphy, a Baltimore attorney representing Clipper Mill condo and townhouse owners in zoning appeals cases now before the Court of Special Appeals, said the appeals court’s ruling on the lawsuit should deter similar lawsuits against residents and neighborhood associations in the future.

The opinion is the first appellate decision interpreting the state’s SLAPP law, passed in 2004, Murphy said.

“For neighborhoods, going to zoning hearings and testifying and participating is just routine,” he said. “It’s the way they operate.”

He called the developer’s lawsuit “totally off the wall, totally inconsistent with the way our society works.”

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