Winery Lawsuit: Judge Awards Nearly $50 Million to Old Mission Peninsula Wineries

In a 75-page Bench Opinion released July 7, 2025, Judge Paul K. Maloney awarded nearly $50 million in damages to the Old Mission Peninsula wineries who filed a lawsuit against Peninsula Township back in 2020.

Maloney, who has presided over the case for the past five years from the U.S. District Court’s Western Michigan district, says the Township’s zoning ordinance at the center of the case is unconstitutional. It’s an opinion that could have far-reaching effects for wineries and communities across the country.

“After decades of strife, arbitrary enforcement, and frustration, the Plaintiff-Wineries sued Peninsula Township,” he writes.

OMP Wineries: “Court’s Decision Reaffirms Wineries’ Constitutional Rights”

In a press release issued July 7, the wineries say that Maloney’s decision reaffirms the wineries’ constitutional rights and condemns unlawful ordinances.

“The wineries of the Old Mission Peninsula Wine Trail (OMPWT) have emerged victorious in their long-standing federal lawsuit against Peninsula Township,” notes the press release. “The court’s decision reaffirms the wineries’ constitutional rights and marks the end of a 16-year battle that challenged restrictive zoning ordinances which had unjustly hindered their operations. The court awarded almost $50 Million in damages to the wineries to compensate for the profits lost from unconstitutional and unlawful ordinances.

“The wineries, a cornerstone of the local economy, have always been more than just family farms and businesses — they are vital contributors to the community, supporting regional agriculture and employing hundreds across the Old Mission Peninsula. Whether welcoming visitors to their tasting rooms, hosting celebrations, or leading agritourism initiatives, these regional partnerships have been central to their mission. The wineries firmly believe in protecting and preserving local agriculture, and this commitment will only strengthen as they move ahead.” Read more here.

Peninsula Township: “Pursuing An Appeal is Likely Necessary”

Peninsula Township Supervisor Maura Sanders notes, “We acknowledge the ruling issued on July 7, 2025, in the Wineries of Old Mission Peninsula litigation. The Township and its legal counsel are thoroughly reviewing the Court’s findings and the damages awarded. In our view, the ruling raises significant legal and factual questions that may merit further consideration.”

She adds, “As such, the Township believes that pursuing an appeal is likely necessary. We are currently evaluating all available legal remedies and options and will take further action as appropriate.”

Ability to Host Events at the Center of Ruling

The nearly $50 million in damages ($49,263,007.70, to be exact) is being awarded primarily because the Township’s zoning ordinance prohibited wineries from holding both small and large events. The damages range from $275,118.50 to Peninsula Cellars for small events, to $11,726,910 to Chateau Chantal for large events. The amounts cover a time period from Oct. 21, 2017 to Dec. 13, 2022 (three years before the wineries filed the lawsuit in 2020 up until the Township repealed the ordinance that was the subect of the lawsuit).

Some of the wineries are not receiving damages because they operate under different zoning regulations.

Maloney’s Opinion largely sides with the wineries. He writes, “Instead of calling witnesses, the Township relied on government documents, some of which were decades old,” and that “Neither the Township nor PTP [Protect the Peninsula] presented a fact witness — subject to cross examination — who could explain the meeting minutes and give them a credibility litmus test.”

Meanwhile, “The wineries’ fact witnesses were model witnesses, knowledgeable, and tough to cross examine,” writes Maloney. “They told a single story through twelve lenses, the PTZO [Peninsula Township Zoning Ordinance] was unreasonable, burdened their operation, and at times made them rethink continuing their enterprises on the OMP.”

Previous Rulings

Maloney previously ruled on several parts of the case, including amplified music (the Township Board may not prohibit it, but may regulate the level of sound), hours of operation (shall be determined by the Township Board, but no later than 9:30 p.m.), and catering (kitchen facilities may be used for on-site food service, but not for off-site catering).

He also previously ruled that the Township’s ordinance requiring that there be at least 85 percent of fruit grown on the Peninsula in any product they sell violated what’s known as the “Dormant Commerce Clause.” Additionally, he writes, “The Michigan Liquor Control Code and the Wineries’ Wine Maker and Small Wine Maker licenses allow the Wineries to source grapes, juice, or finished wine from anywhere in the world.”

On one of the issues resolved previously, Maloney writes, “This court rules that any subsection of Section 8.7.3(10) that uses the term ‘Guest Activity’ is unconstitutionally vague and must be stricken from the Township Ordinances.”

Maloney declined to issue an injunction for the Township under Federal Rule of Civil Procedure 65, (an injunction is a court order that either directs a party to do something or stop doing something), because the zoning ordinance at the center of the lawsuit has been repealed. Many subsections of former sections of the ordinance that were challenged by the wineries in the lawsuit were repealed or substantially revised by Amendment 201, which was adopted by the Township Board on Dec. 13, 2022.

A separate Judgment was issued yesterday, as well, which states simply that in accordance with the Bench Opinion, a judgment has been entered.

It remains to be seen whether the damages are covered by Township insurance, whether residents of the OMP will be liable for some of the cost, or whether the Township’s former attorneys might possibly be liable.

In 2024, the Township filed a lawsuit against their former attorneys, Greg Meihn and Matthew Wise, as well as the attorneys’ current and former law firms. The Township claims the attorneys engaged in legal malpractice while representing the Township during the winery lawsuit. This lawsuit is ongoing.

“As a result of Defendants’ failure to timely list one or more experts and timely produce expert reports, the Township is now forced to bring a proverbial knife to a gunfight in the ongoing litigation,” notes the Complaint, “creating a critical disadvantage for it in responding to the Wineries’ grossly-inflated damages claims, and exposing the Township to far greater liability than it ever would have if Defendants had complied with the standard of care.”

Highlights From the Bench Opinion

PTP is a NIMBY Group. Maloney writes that Protect the Peninsula, a longtime watchdog group on the Peninsula that petitioned and was granted the right to join the case, “is largely a NIMBY [Not in My Backyard] group devoted to stifling development on the OMP.”

Lack of Witnesses. He notes that, “At trial, Plaintiffs called twelves fact witnesses, one damages expert, and two rebuttal experts. Peninsula Township did not call a single witness. Protect the Peninsula did not call any fact witnesses but did call one expert to opine on the reasonableness of the PTZO [Peninsula Township Zoning Ordinance].”

Riddled With Hearsay. “The Township’s reliance on meeting minutes and other documents raises an issue,” writes Maloney. “How much weight and credibility should the court give to them? Plaintiffs objected to these documents’ admissibility at trial because, in their view, the documents are riddled with hearsay. Even so, the court admitted the documents into the record over Plaintiffs’ continuing hearsay objection.”

Is a Winery a Viable Business? Throughout the litigation, winery owners testified about the viability of operating a winery on the Peninsula. John Kroupa, owner and general manager of Peninsula Cellars, testified that “he wants his children to maintain his farm in the future, but he is unsure whether that is a viable prospect given the Township’s PTZO.” Chris Baldyga, co-owner of Two Lads Winery and the president of Wineries of Old Mission Peninsula (WOMP), said that “if he were unable to farm and maintain his winery, he would explore selling his property for housing development.”

Commercial Speech Regulation. During testimony from former Township Supervisor Rob Manigold, he noted that there was a concern regarding whether merchandise sold at wineries such as logo’d clothing, coffee cups and bumper stickers would venture outside of agriculture use and into commercial use. The court concluded, “Not even the Township Supervisor understood the regulations. The Township could not muster a single fact witness to testify regarding the supposed reasonableness of the PTZO, and the Township did not even attempt to call the previously deposed Township officials.”

Ag or Commercial Uses? Former Planner Gordon Hayward testified that “The Township’s governmental interests are harmed by the sale of non-logo’d merchandise because it degrades the agricultural industry and that, over time, through that degradation, the agricultural industry will tend toward commercial uses. In other words, Defendants rely on a slippery slope fallacy — any inch toward a hybrid agricultural and commercial use will inevitably degrade the OMP’s rural character. Mr. Hayward also testified that the Township engaged in long-standing and reasonable efforts to carefully tailor the zoning ordinances such that they would support agriculture and agricultural production. That view is not reconcilable with this record … The overwhelming proofs at trial indicated that the Township’s purported interests in preserving agriculture would lead to situations where farms could not exist on the OMP … Perhaps the easiest way to support agriculture on the OMP would be to support the farmers there, and the PTZO does not do that.”

The Price of Farmland. Gary McDowell, an expert in rural development, agriculture preservation, and agricultural tourism, testified that increasing — rather than decreasing — the value of farmland is in the best interests of the farmers. “And the one part I was really surprised at is when [Dr. Daniels] talked about trying to reduce the price of farmland,” he said. “I’ve just never heard of that before. That was just something with all my years of development, economic development commissions, I did serve over 20 years on the Chippewa County’s economic development commission working with the townships, we’re always trying to increase land values, that’s so important for a farmer, of course, when you retire, that’s your retirement. You don’t have 401Ks or pension plans. And farmers have to borrow money all the time to operate, to buy equipment. And it’s always the bank wants to see your net worth. And the biggest part of that, almost the whole part, is your farm.”

Lifting Ordinance Restrictions Equals More Land Preservation. “In theory, if the restrictions in the PTZO were lifted — or the Township imposed a workable zoning scheme — the Wineries would be able to preserve more agricultural land, as many have plans to plant additional acres and expand their farms. On this point, to the extent the OMP locals are concerned about a large influx of traffic and noise, which could precipitate after more development, a simple noise ordinance could be a narrowly tailored solution to serve many of the same interests in protecting the quiet enjoyment of the Township.”

Wineries Have an Interest in Maintaining the Rural Character. “The Wineries also benefit tremendously from its scenic views and unique growing climate. Holding more events, advertising, or more retail space does not unilaterally convert the typical Winery accessory uses (based in agriculture) into purely commercial activity.”

Does the Zoning Ordinance Help to Maintain Rural Character? “The problem is that every one of the remaining PTZO provisions makes operating a farm or winery more difficult. As the Wineries’ representatives testified, in conjunction with farming expert Gary McDowell, farms and wineries need alternate revenue streams to survive. And as Mr. Baldyga described, the alternative to operating a failing business is selling the farmland for residential development. The PTZO provisions do not advance the Township’s interest in maintaining rural character or keeping land in agriculture.”

A Trial Story About Chateau Grand Traverse. Maloney writes, “The court has reviewed hundreds of pages of briefing and listened to more than ten days of trial. One story from the trial, however, captures the spirit of this decades long dispute.” This involves testimony from Edward O’Keefe, Jr., chairman and CEO of Chateau Grand Traverse. From the court transcript:

Q: Was Chateau Grand Traverse ever the subject of potential enforcement action by Peninsula Township?

A. Yes.

Q. What happened?

A. It’s an unfortunate event, but we were — my wife and I were very involved in resurrecting the local elementary school that was going to be shut down by the public school system. And one of the teachers that was there … was a beloved first grade teacher who had breast cancer. And she was Stage 4, and we decided that we were going to throw a fundraiser for her, that a hundred percent of the proceeds from the sale of our wine tasting room at an event at our winery would go to her directly. And the day of the event, I got a phone call, which again, I’ve never really received any sort of a phone call before on something like this. And it was from — I believe she was the Township clerk. It was Joanne Westphal.

And she called me up and said, “I see you’re having an event at your winery tonight and you don’t have a permit.” I said, “To the best of my knowledge, I do not require a permit if the event is not going to exceed 75 people.” And she said, “Oh, is that so?” And I go, “Yes, that is so. And I suggest before you call and make a threatening act on me, that you familiarize yourself with our SUP.” And she goes, “Well, we’ll see about that.” And it just struck a chord in me that this was a — really, a nonconcerning event, and I got in my car. It’s only a mile down the road to the Township. I drove down to the Township and I said, “I would like to see Ms. Westphal.” And the lady at the counter said — went in the back room, talked to her for a little bit, came back out and said, “Ms. Westphal says you need to make an appointment to see her.”

And I said, probably in a little bit of a heated way, another word for posterior, to have her please step out of her office. And I said, “You can’t make a threatening act like that when it’s unenforceable and you do not understand your own rules.” And I just said, “We are holding our event tonight. It’s within the realm of what I can do as a winery.” And I said – that’s where I left it. And she said, “If it exceeds 75 people, we will know about it.”

So it was implied that — well, you can take the implication however you want, but it was a very — like, wow, we are going to be counting cars and numbers. Needless to say, I think the event was maybe 50 people, and it went off successfully.

Maloney’s Opinion notes that Chateau Grand Traverse (which was the first winery on the Old Mission Peninsula), predates the Winery-Chateau Ordinance, and that its Special Use Permit refers to it as a “winery chateau,” which creates confusion as to whether it is subject to the Winery-Chateau Ordinance.

Maloney adds, “The SUP is further confusing in that it allows ‘outdoor functions such as wine tasting parties, festivals, etc.,’ but requires a special permit if these are likely to involve more than 75 people. Chateau Grand Traverse would like to be able to host more than 75 people. The ‘etc.’ has always confused Mr. O’Keefe, and he has no idea if the SUP allows him to hold indoor functions. It also allows ‘low-level mood music’ but Mr. O’Keefe does not know what that means.”

Read the full Bench Opinion here. Read all winery lawsuit news and opinions on Old Mission Gazette here.

Also Read…

New Group Forms to Oppose Winery Lawsuit – How Much Will You Be Liable For?

Opinion: Township Liability Insurance and the Winery Lawsuit

Winery Lawsuit News: Judge Issues Rulings on Amplified Music, Hours and Catering