GSL Holdings, LLC v. Charter Township of Lyon, Michigan (Sixth Circuit Rejects Developer's Civil-Rights Claims Over Permitting Delay)

Full write-up

The U.S. Court of Appeals for the Sixth Circuit, in a published opinion by Circuit Judge Andre B. Mathis filed November 9, 2026, affirmed summary judgment against a Michigan real estate developer that sued a township and its supervisor under 42 U.S.C. Section 1983 after permitting delays scuttled a build-to-suit industrial lease. The decision in GSL Holdings, LLC v. Charter Township of Lyon, Michigan illustrates how difficult it is for a commercial developer to convert a frustrating, deal-killing permitting dispute with a municipality into a viable federal constitutional claim.

GSL Holdings owns roughly six acres of land in an industrial park in Lyon Township, Michigan. In December 2020, GSL signed a lease with Moba Americas, Inc., a manufacturer serving the egg industry, agreeing to build a commercial facility on the parcel and have it ready for occupancy by October 1, 2021, a tight ten-month runway. The timeline was complicated from the outset: the property lacked access to the public sewer system, meaning GSL needed an on-site septic system and a corresponding permit from the Oakland County Health Division before construction could begin. The county had previously told GSL, in connection with an earlier 2018 permit application on the same property, that it would not grant a septic permit unless GSL combined the parcel with an adjacent lot, something GSL still had not done as of early 2021.

Lyon Township preliminarily approved GSL's site plan in January 2021, but under the township's ordinances a developer still needs a building permit, and separately, approval from county health authorities, before construction can commence. Over the following months, GSL secured engineering reviews and applied for foundation and shell permits, but had not yet applied for the septic permit or moved to combine the lots. According to the court's recitation of the record, a GSL representative grew impatient with the pace of the process and emailed the township's entire board of trustees directly in March 2021, a move the township's attorney flagged as potentially risking a violation of Michigan's Open Meetings Act. The township agreed to proceed with its building-plan review only if GSL signed a hold-harmless agreement releasing the township from liability tied to that review, which the parties executed. GSL submitted its septic permit application on March 9, 2021, but the county again declined to process it because GSL still had not combined the two lots.

The relationship deteriorated from there. GSL claims a township building coordinator told it in late March that foundation and shell permits were ready for pickup, but GSL never retrieved them; on April 5, the township informed GSL that, per the direction of Township Supervisor John Dolan, no building permit would issue until after a utility pre-construction meeting, which itself could not be scheduled until GSL obtained its septic permit. In a last attempt to salvage the project, the township in May 2021 proposed a second hold-harmless agreement that would have let GSL begin construction without the septic permit if GSL agreed to extend the public sanitary sewer to the site at its own cost. GSL called the proposal atypical and unduly burdensome, and the parties never signed it. The October 2021 occupancy deadline passed unmet, and GSL ultimately negotiated a termination of its lease with Moba rather than holding the tenant to its original commitment.

GSL sued the township and Dolan, asserting equal-protection, due-process, and First Amendment retaliation claims under Section 1983, along with a Michigan Freedom of Information Act claim, arguing the delays were the product of unconstitutional municipal conduct rather than ordinary permitting friction. The district court granted summary judgment to the defendants on the federal claims, and the Sixth Circuit affirmed, rejecting GSL's theories that the township's insistence on a completed septic permit and county lot-combination, or its reaction to GSL's direct outreach to the township board, amounted to a constitutional violation rather than ordinary, if costly, municipal process.

For commercial and industrial developers negotiating build-to-suit leases with tight occupancy deadlines, the lesson is to account for permitting dependencies that sit with a separate government body entirely, since delays there can doom a project timeline regardless of the municipality's own conduct. A hold-harmless agreement a municipality conditions further review on is not a mere formality and can foreclose later arguments that the review process itself caused a delay; direct communication with a governing board outside normal channels carries its own legal and relationship risk under state open-meetings laws; and absent evidence a delay was pretextual or discriminatory, courts are likely to treat the dispute as an ordinary land-use disagreement rather than a federal constitutional violation.

Case timeline