Imagine the following – a solidly performing hotel, diligently paying its occupancy and property taxes, that has a 95 percent customer satisfaction rating is surprised one morning by the local sheriff paying the hotel a visit. The sheriff has a posse of deputies in tow, carrying padlocks and a “notice of violation.” The sheriff informs the manager on duty that he is there to shut the hotel down for violating the town’s nuisance laws. A quick review of the notice of violation states that the hotel is in violation of a provision of the ordinances prohibiting any condition on a property that “endangers the public welfare.” After a brief and awkward conversation with the sheriff, the hotel is surprised to learn that a ring of identity thieves has been using the hotel (and the hotel’s complimentary wi-fi services) as its base of operations and, over the last 12 months, unbeknownst to the hotel, there had been four different arrests of identity thieves who used the hotel in this way.
Can a sheriff shut down a hotel without a court order for crimes allegedly committed by the hotel’s guests, and what can a hotel do about it?
Across the country, nuisance laws that can impact hotel operations exist at the state, county and municipal level. Largely, these laws are aimed at reducing or eliminating structural defects and unsanitary conditions. One can easily imagine local code enforcement officers invoking nuisance laws to condemn a dilapidated building. However, nuisance laws may sometimes be used to seek remedies against hotels at which criminal activity has occurred – or where local law enforcement believes criminal activity is occurring.
A growing number of jurisdictions have specifically deemed various types of criminal activities that occur on a property to be public nuisances. In other jurisdictions, law enforcement officials may use generic provisions in structural nuisance ordinances that prohibit “anything affecting the public safety” as a window to call criminal activity a “nuisance.” In some cases, the expedited remedies available to the government and, in some instances, private citizens, can catch a hotel operator unaware leaving little time to respond, correct the issues or prepare an adequate defense. These laws are often intentionally vague so as to allow an enforcing party broad discretion. Moreover, contributing to the difficulty in compliance, nuisance laws are often unclear as to who has enforcement authority and decides the standards for whether a condition qualifies as a nuisance. Other times, local laws are in conflict with state laws, or the nuisance provision references older ordinances that are designed for unrelated issues.
Law enforcement officials seeking to abate criminal nuisances often invoke the specter of expedited injunctive relief, such as shutting a hotel down on only a few days’ notice, if the hotel refuses to meet certain demands. Such demands may include, without limitation, turning over hotel guest registries, demanding that the hotel refuse certain categories of reservations or event requests, or hiring additional security. Complying with these demands not only impacts a property’s bottom line, but may also conflict with the hotel’s posted privacy and confidentiality provisions and the hotel’s brand standards or impose reporting and other requirements on hotel staff that could, if not managed appropriately, give rise to other claims. Additionally, those seeking to enforce criminal activity nuisance abatement laws could also make the dispute “public,” which can impact the property’s and the brand’s image.
Understanding the operation of the various types of nuisance laws and the variety of common defenses, along with an understanding of the specific nuisance laws in effect in the local jurisdictions where your properties are located, can facilitate a prompt, standardized response.
As stated previously, the most common types of nuisance abatement laws are those adopted at the county or municipal level regarding structural defects and/or sanitary conditions. Most municipal codes empower the fire marshal, sheriff or similar code enforcement officer to make inspections of buildings to determine if fire hazards, structural defects or unsanitary conditions exist, and provide a host of remedies, ranging from summary procedures by which the enforcement official can close the building, impose incarceration or simply impose fines and other penalties, including the recovery of attorney fees. Responsibility for compliance with the code (and therefore the party against whom any fines or criminal penalties may be enforced) often includes the owner and/or property manager.
Enforcement of nuisance laws related to criminal activity occurring at a hotel is always a source of concern. Many jurisdictions have laws that specifically define certain types of criminal activity occurring on real property to be public nuisances. Typically targeted activities include violent crimes, firearm violations, drug-related offenses, prostitution, human trafficking and organized crime, despite the fact there may only be a few offenses over a certain period of time and regardless of whether the hotel initiated the call to law enforcement for assistance. Even in jurisdictions with no specific criminal nuisance laws, some enforcing parties have attempted to include any criminal activity into the broad and vague definition of “unsafe condition” (see identity theft scenario above) or similar terms found in ordinances typically used for structural defects.
Under one state statute, for example, it is deemed a public nuisance any time there have been three or more arrests, three or more arrest warrants indicating a pattern of criminal activity, or issuance of three or more citations for a violation of an enumerated list of municipal ordinances (the list includes sale/possession of drugs and violation of noise ordinances) within the year preceding the filing of an action for abatement of such offenses.
At the local level, in the same state referenced above, the ordinances prohibit any nuisances that threaten life, health or safety of the public, including “any condition which would constitute a public nuisance at common law.” That local ordinance only applies to “tenement housing,” but one might argue that, based on the language of the ordinance, it applies to hotels. Similarly vague definitions of “public nuisance” in other jurisdictions range from “anything that causes injury or damage to the health or life of any other person” to “anything that substantially annoys . . . the comfort, health, repose, or safety of the public; and in any way render[s] the public insecure in life or in the use of property. . . .” Ambiguities in local ordinances, like whether or not “tenement housing” ordinances relate to hotels and the broad definitions of what may constitute a nuisance, highlight the difficulty hotels face in evaluating if such laws apply and resisting enforcement attempts by law enforcement.
It is not a surprise that structural and sanitary nuisances tend to have very expedited procedures through which enforcement officials can take remedial action, including attempting to place the property into receivership, shutting the establishment down and vacating any guests. The rationale behind the expedited procedures is that, if the enforcement official can identify some part of the structure of the building or some health concern that is an immediate threat to the health or safety of those occupying the building, it is in the public interest to have a procedure to immediately have the building vacated. For less serious structural violations, common remedies include fines or assessing cleanup/construction costs against the property owner.
For criminal activity nuisances, remedies tend to be less expedited than is the case with structural nuisances, but still have very short timeframes. For example, under one state law, a show cause hearing may be set within 10 days of serving the property owner with the summons and complaint regarding the abatement action. However, in many jurisdictions, temporary ex parte orders (i.e., TROs) may be obtained under certain circumstances. Fines and jail time may also be imposed.
Common defenses may include the following:
In most cases, the hotel will work with the enforcement official to find an amicable resolution as the possible negative outcomes weigh on the hotel’s decisions. It could be costly and time intensive to pursue the hotel’s defenses, and the vague and broad definitions in the ordinances fail to provide clear guidance. Even if a foolproof legal defense is available, the best practice is, of course, to first try to work with enforcement officials to attempt to achieve mutual goals.
So . . . what can you do to anticipate, protect against, and proactively mitigate the risk of an unwanted visit from your local sheriff or code enforcement officer related to the criminal activity nuisance concerns?
First, knowing the applicable laws/ordinances is important. Second, it is paramount that the hotel maintain a good relationship with law enforcement to demonstrate, when necessary, that the hotel is diligently and proactively attempting to eliminate any perceived criminal activity (in certain instances a policy and procedure refresher with the hotel staff is the best place to start). Third, a combined systematic review by both the risk and operations teams may provide early detection of activities that may already be under the eye of law enforcement.
Kelly Franklin Bagnall is Director of Dykema's Hospitality & Gaming Industry Group, and Chais Sweat is a Senior Attorney in Dykema’s Commercial Litigation Group. Both are resident in the firm's Dallas Office.