Easthampton Savings Bank v. City of Springfield

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SJC-11612

EASTHAMPTON SAVINGS BANK & others1 vs. CITY OF SPRINGFIELD.

Suffolk. September 4, 2014. - December 19, 2014.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &
Hines, JJ.

Constitutional Law, Home rule, Home Rule Amendment. Municipal
Corporations, Home rule, By-laws and ordinances, Fees.
Mortgage, Foreclosure. Massachusetts Oil and Hazardous
Material Release Prevention Act. State Sanitary Code.

Certification of questions of law to the Supreme Judicial
Court by the United States Court of Appeals for the First
Circuit.

Tani E. Sapirstein for the plaintiffs.
Thomas D. Moore, Associate City Solicitor (Lisa C. deSousa,
Associate City Solicitor, with him) for the defendant.
The following submitted briefs for amici curiae:
Lee D. Goldstein for Harvard Legal Aid Bureau & others.
Robert G. Rowe, III, of the District of Columbia, for
American Bankers Association, Inc.
Francis J. Nolan & Nathalie K. Salomon for Real Estate Bar
Association for Massachusetts, Inc., & another.
Michael McDonagh for Massachusetts Association of Realtors.

1
Chicopee Savings Bank, Hampden Bank, United Bank, Monson
Savings Bank, and Country Bank for Savings.
 2

Henry C. Luthin, First Assistant Corporation Counsel, &
Brandon H. Moss for Massachusetts Municipal Lawyers Association,
Inc.
William F. Sheehan, of the District of Columbia, & Brenda
R. Sharton & Thomas M. Hefferon for Massachusetts Bankers
Association, Inc.

SPINA, J. We consider in the present case challenges

brought against two ordinances adopted by the city of

Springfield (city) in response to a wave of foreclosures

triggered by the economic downturn of 2008. The United States

Court of Appeals for the First Circuit has certified the

following questions to this court, pursuant to S.J.C. Rule 1:03,

as appearing in 382 Mass. 700 (1981):2

"1. Are Springfield's municipal ordinances Chapter
285, Article II, 'Vacant or Foreclosing Residential
Property' (the [f]oreclosure [o]rdinance) or Chapter 182,
Article I, 'Mediation of Foreclosures of Owner-Occupied
Residential Properties' (the [m]ediation [o]rdinance)
preempted, in part or in whole, by those state laws and
regulations identified by the plaintiffs?

"2. Does the [f]oreclosure [o]rdinance impose an
unlawful tax in violation of the Constitution of the
Commonwealth of Massachusetts?"

Easthampton Sav. Bank v. Springfield, 736 F.3d 46, 53 (1st Cir.

2013).

2
Supreme Judicial Court Rule 1:03, as appearing in 382
Mass. 700 (1981), provides: "This court may answer questions of
law certified to it by . . . a Court of Appeals of the United
States . . . when requested by the certifying court if there are
involved in any proceeding before it questions of law of this
State which may be determinative of the cause then pending in
the certifying court and as to which it appears to the
certifying court there is no controlling precedent in the
decisions of this court."
 3

We answer the first question that the mediation ordinance

is preempted by G. L. c. 244 and that the foreclosure ordinance

is preempted by G. L. c. 21E and G. L. c. 111 but not by G. L.

c. 244. We answer the second question in the negative.3

1. Procedural background. We summarize certain undisputed

facts in the order of certification and in the record before us.

In 2011, in response to an increased number of foreclosures due

to the housing market collapse of 2008 and its effect on public

safety, the city enacted two ordinances addressing properties

left vacant during or after the foreclosure process. The

plaintiffs, six banks holding mortgage notes on properties in

Springfield, filed suit in State court seeking declaratory and

injunctive relief from the enforcement of the ordinances. The

defendant city removed the case to Federal court. The Federal

District Court allowed the city's motion for summary judgment.

The plaintiffs appealed to the United States Court of Appeals

for the First Circuit. That court determined that the outcome

of the case centered on unresolved questions of Massachusetts

3
We acknowledge the amicus briefs filed by the
Massachusetts Bankers Association, Inc.; the American Bankers
Association, Inc.; the Massachusetts Association of Realtors;
and the Real Estate Bar Association for Massachusetts, Inc., and
the Abstract Club in support of the plaintiffs, and the Harvard
Legal Aid Bureau, National Consumer Law Center, National
Community Reinvestment Coalition, Massachusetts Law Reform
Institute, and Massachusetts Alliance Against Predatory Lending;
and the Massachusetts Municipal Lawyers Association, Inc., in
support of the defendants.
 4

law better suited for this Court. We now consider the questions

presented to this court.

2. Springfield ordinances. The two ordinances deal

specifically with the foreclosure process. The mediation

ordinance is entitled "Facilitating Mediation of Mortgage

Foreclosures of Owner Occupied Residential Properties" and is

codified in Chapter 7.60 of Title 7 of the Revised Ordinances of

the city of Springfield, 1986, as amended (city ordinances).

The foreclosure ordinance is entitled "Regulating the

Maintenance of Vacant and/or Foreclosing Residential Properties

and Foreclosures of Owner Occupied Residential Properties," and

is codified in Chapter 7.50 of Title 7 of the city ordinances.

a. Mediation ordinance. The mediation ordinance

establishes a program requiring mandatory mediation between

mortgagors and mortgagees. The ordinance requires that, upon

giving notice of a default and the statutory right of redemption

to the mortgagor, mediation must begin within forty-five days.

The mediation consists of a conference between the mortgagor and

mortgagee in which the parties must make a good faith effort to

renegotiate the terms of the mortgage that was the subject of

the notice or otherwise to resolve the pending foreclosure. If,

after a mediation conference, the city-provided mediation

program manager determines that the mortgagee has made a good

faith effort to mediate but that the parties were unable to come
 5

to an agreement to avoid foreclosure, the manager will issue a

certificate stating that the mortgagee has satisfied the

requirements of the mediation ordinance and authorizing the

mortgagee to proceed with its rights pursuant to G. L. c. 244.

Failure of a mortgagee to comply with the mediation ordinance

results in a $300 fine with each day of noncompliance

constituting a separate violation.

b. Foreclosure ordinance. The foreclosure ordinance

requires owners of buildings that are vacant or undergoing

foreclosure to register with the city. The definition of

"owner" includes "a mortgagee of any such property who has

initiated the foreclosure process." Under the ordinance, the

mortgage foreclosure process is initiated by "taking possession

of a residential property pursuant to [G. L. c. 244, § 1]; [or

by] commencing a foreclosure action on a property in any court

of competent jurisdiction, including without limitation, filing

a complaint in Land court under the Servicemembers Civil Relief

Act -- Public Law 108-189 (50 U.S.C.S. App. § 501-536)." In

addition, "where the mortgage authorizes [the] mortgagee entry

to make repairs upon the mortgagor's failure to do so," the

mortgagee has "initiated" the foreclosure process. Read

together, a mortgagee whose mortgage expressly authorizes entry

to make repairs upon the mortgagor's failure to do so is an
 6

owner under the ordinance without any consideration as to

whether the mortgagor has vacated the property.

Under the foreclosure ordinance, an "owner" as defined in

the ordinance is responsible for the maintenance of the

property. The ordinance specifies the minimum requirements of

maintenance, including the filing of a space utilization plan

with the fire commissioner; the removal of hazardous material

from the property; the securing of windows and doorways or the

provision of twenty-four hour on-site security; the removal of

trash, debris, and stagnant water; the draining of water from

plumbing if the property is vacant; the procurement of liability

insurance for the property; and the provision of a $10,000 cash

bond against the possibility of noncompliance. Upon the

satisfaction of these conditions, the city will issue a

certificate of compliance to the owner.

If an owner fails to register a vacant or foreclosing

property with the city and to obtain a certificate of

compliance, the building commissioner, once notified, is

empowered to give notice and order the owner to bring the

property into compliance with the foreclosure ordinance.

Failure to comply with an order to register and its attendant

conditions authorizes the building commissioner and his agents

to enter the property to inspect it and bring it into compliance

with the ordinance. An owner must pay any expenses incurred by
 7

the commissioner in securing an unregistered property within

seven days of receipt of notice, or the city may file a notice

of claim against the property and obtain a lien. The

ordinance's requirement of a $10,000 bond ensures that, should

the owner of a property subject to the ordinance fail to

maintain the property according to the strictures of the

ordinance, the city will be able to recoup the costs of entering

the property and satisfying the maintenance requirements. If

the property is registered and the owner fails to pay the

expenses incurred by the city, the city may draw down the posted

bond. Furthermore, the city will retain an unspecified portion

of the bond as "an administrative fee to fund an account for

expenses incurred in inspecting, securing, and marking said

building and other such buildings that are not in compliance

with [the foreclosure ordinance]."4 Finally, failure to comply

with the foreclosure ordinance results in a $300 per day fine

with each day constituting a separate violation.

3. Preemption. The Home Rule Amendment authorizes a

municipality by ordinance or bylaw to "exercise any power or

function which the general court has power to confer upon it,

which is not inconsistent with the constitution or laws enacted

by the general court in conformity with powers reserved to the

4
The city has represented that this fee would likely be
between $500 and $1000. Easthampton Sav. Bank v. Springfield,
736 F.3d 46, 49 n.3 (1st Cir. 2013).
 8

general court by section eight" of the Home Rule Amendment. See

art. 89, § 6, of the Amendments to the Massachusetts

Constitution. See also G. L. c. 43B, § 13 (Home Rules

Procedures Act). Municipal bylaws are presumed to be valid.

Marshfield Family Skateland, Inc. v. Marshfield, 389 Mass. 436,

440 (1983). The plaintiffs argue that the ordinances are

inconsistent with several laws enacted by the General Court and

thus are unconstitutional. The city argues that no conflict

exists with the specified laws and that, should this court

conclude otherwise, the foreclosure ordinance by its own

language avoids any conflict.

In determining whether a local ordinance or bylaw is

inconsistent with a State statute, the "question is not whether

the Legislature intended to grant authority to municipalities to

act . . . , but rather whether the Legislature intended to deny

[a municipality] the right to legislate on the subject [in

question]." Wendell v. Attorney Gen., 394 Mass. 518, 524

(1985). Municipalities enjoy "considerable latitude" in this

regard. Bloom v. Worcester, 363 Mass. 136, 154 (1973). There

must be a "sharp conflict" between the ordinance or bylaw and

the statute before a local law is invalidated. Id. Such a

conflict "appears when either the legislative intent to preclude

local action is clear, or, absent plain expression of such

intent, the purpose of the statute cannot be achieved in the
 9

face of the local by-law." Grace v. Brookline, 379 Mass. 43, 54

(1979).

Legislative intent to preclude local action can be express

or inferred. St. George Greek Orthodox Cathedral of W. Mass.,

Inc. v. Fire Dep't of Springfield, 462 Mass. 120, 126 (2012).

When express, the task of determining the inconsistency between

a local enactment and a State law is relatively easy. See

Wendell, 394 Mass. at 524. More difficult are the instances

when the Legislature is silent on the issue of local regulation

and a party challenging a local enactment asserts that "a

legislative intent to bar such local action should be inferred

in all the circumstances." Id. When "legislation on a subject

is so comprehensive that an inference would be justified that

the Legislature intended to preempt the field," a municipal law

cannot stand. Id. See Anderson v. Boston, 376 Mass. 178, 186

(1978) (construing campaign finance laws as "preempting any

right which a municipality might otherwise have to appropriate

funds for the purpose of influencing the result on a referendum

question"). "In a close case, the considerations influencing

the decision depend on the particular circumstances and a

perception of the extent to which the Legislature has or has not

made a preemptive intent clear. In such an analysis, it is not

inappropriate to take note of what has or has not been
 10

traditionally a matter of local regulation." Wendell, 394 Mass.

at 525.

The plaintiffs have identified three statutes that they

argue are in conflict with the ordinances: G. L. c. 244, the

Massachusetts foreclosure statute; G. L. c. 21E, the

Massachusetts Oil and Hazardous Material Release Prevention Act

(OHMRPA); and G. L. c. 111, §§ 127A-127L, the State sanitary

code. We address each in turn.

a. Massachusetts foreclosure statute. The plaintiffs

argue that the foreclosure statute preempts the foreclosure

ordinance. The First Circuit has asked us also to consider

whether the foreclosure statute preempts the mediation

ordinance. As we explain, we conclude that the foreclosure

statute preempts the mediation ordinance in whole but find no

preemption of the foreclosure ordinance.

i. Mediation ordinance. General Laws c. 244 establishes

three means by which the equity of redemption of a mortgage may

be foreclosed. They are foreclosure (1) by action, G. L.

c. 244, §§ 3-10; (2) by entry and possession, G. L. c. 244,

§§ 1, 2; or (3) by sale under the power of sale in a mortgage,

G. L. c. 244, §§ 11-17C. General Laws c. 244, § 35A, as amended

by St. 2010, c. 258, § 7, gives a mortgagor of residential real

property in the Commonwealth 150 days to cure a payment default

before foreclosure proceedings may be commenced. A foreclosing
 11

mortgagee may reduce the 150-day period to ninety days by

certifying that it has engaged "in a good faith effort to

negotiate a commercially reasonable alternative to foreclosure

. . . involv[ing] at least 1 meeting, either in person or by

telephone, between [the parties or their representatives,]" and

that the meeting was not successful. G. L. c. 244, § 35A (b).

A good faith effort requires the mortgagee to consider the

mortgagor's current circumstances, an analysis of the net

present value of a modified mortgage loan compared to the

"anticipated net recovery following foreclosure[,] and . . . the

interests of the creditor." G. L. c. 244, § 35A (c). Should

the good faith effort fail, the mortgagee must provide the

mortgagor with an affidavit setting forth "the time and place of

the meeting, parties participating, relief offered to the

borrower, a summary of the creditor's net present value analysis

and applicable inputs of the analysis and certification that any

modification or option offered complies with current [F]ederal

law or policy." G. L. c. 244, § 35A (f).

A comparison of the foreclosure statute and the mediation

ordinance reveals similar attempts to give mortgagees an

incentive to negotiate with the mortgagors before proceeding to

foreclose. The city contends that the mediation ordinance

complements and does not conflict with the foreclosure statute

because a mortgagee could comply with both laws. We disagree.
 12

The Legislature's decision to utilize the proverbial "carrot" of

a shorter right-to-cure period trumps the city's choice of the

"stick" of a daily fine. Furthermore, the ordinance by its own

terms does not allow a mortgagee to proceed with foreclosure

before obtaining a certificate of good faith mediation, a direct

impingement on the process of foreclosure.

Mortgage foreclosure regulation traditionally has been a

matter of State, and not local, concern. See Walsh, The Finger

in the Dike: State and Local Laws Combat the Foreclosure Tide,

44 Suffolk U. L. Rev. 139, 180-187 (2011) (reviewing legal

challenges to efforts by municipalities to regulate mortgage

foreclosure process). See BFP v. Resolution Trust Corp., 511

U.S. 531, 541-542 (1994) (noting traditional State-level

management of foreclosure). The mediation ordinance alters what

the Legislature determined, as a matter of policy, to be the

just medium between the parties involved in the contemplation of

a mortgage foreclosure. By so doing, the ordinance necessarily

"frustrate[s] the purpose" of the foreclosure statute. Wendell,

394 Mass. at 529.

The Legislature's amendment of the foreclosure statute in

2012 provides further support for our conclusion that the

foreclosure process is wholly a matter of State regulation

absent an expression of a clear intent to allow local

regulation. General Laws c. 244, § 35B, inserted by St. 2012,
 13

c. 194, § 2, prohibits a mortgagee from proceeding with

foreclosure by sale if the mortgage loan at issue in the

foreclosure qualifies as a "certain mortgage loan," as defined

by G. L. c. 244, § 35B (a). If the loan qualifies, the

mortgagee must conduct an analysis of whether the mortgagor is

capable of paying a modified mortgage loan, and it must offer

the mortgagee any such identified loan. See G. L. c. 244,

§ 35B (b). This analysis and offer, if any is forthcoming,

constitute objective evidence of a good faith effort to prevent

foreclosure. Id. We think the differing treatment of lenders

based on the particular circumstances of the mortgage loan in

question indicates that the Legislature considered and rejected

other possible means of regulation. Accordingly, we discern a

legislative intent to occupy the field to the exclusion of other

options -- including further regulation at the local level.

ii. Foreclosure ordinance. The foreclosure statute does

not preempt the foreclosure ordinance. As we stated above,

G. L. c. 244 establishes procedures by which the equity of

redemption in a mortgage may be foreclosed. The foreclosure

ordinance does not impact that process. Although a mortgagee's

duty to maintain and repair arises under the ordinance and other

liabilities may arise from actions required under the ordinance,

nothing in the ordinance affects the procedures for foreclosing

the equity of redemption. It is immaterial for purposes of
 14

liability under the ordinance that the ordinance considers the

foreclosure process initiated at a different moment than the

statute because the ordinance does not purport to have any legal

effect on the statutory foreclosure process.5 We therefore

conclude that the foreclosure ordinance does not conflict with

the foreclosure statute.6

b. Massachusetts Oil and Hazardous Material Release

Prevention Act. As we explain, we determine that the

foreclosure ordinance is inconsistent with G. L. c. 21E, the

OHMRPA. The foreclosure ordinance requires an "owner of a

vacant and/or foreclosing property" to "[r]emove from the

property, to the satisfaction of the fire commissioner,

hazardous material as that term is defined in Massachusetts

General Laws, chapter 21K, as that statute may be amended from

time to time . . . ." The plaintiffs argue that the foreclosure

ordinance's definition of "owner" is broader than the definition

5
As discussed infra, where the mortgage authorizes the
mortgagee to make repairs upon the mortgagor's failure to do so,
the mortgagee is deemed to have initiated the foreclosure
process.
6
The foreclosure ordinance also is not inconsistent with
G. L. c. 266, § 120, the criminal trespass statute. The
criminal trespass statute applies to those who enter "without
right." G. L. c. 266, § 120. A mortgagee may have a right to
enter property either under the terms of the mortgage or under
G. L. c. 244, § 9.
 15

included in the OHMRPA.7 In the plaintiff's view, this

overbreadth directly places the foreclosure ordinance squarely

in conflict with a clearly stated legislative policy. We agree.

The OHMRPA is a statute "drafted in a comprehensive fashion

to compel the prompt and efficient cleanup of hazardous material

and to ensure that costs and damages are borne by the

appropriate responsible parties. To that end, the [Department

of Environmental Quality Engineering] has promulgated extensive

regulations . . . for purposes of implementing, administering,

and enforcing [the OHMRPA]." Taygeta Corp. v. Varian Assocs.,

436 Mass. 217, 223 (2002). Under the OHMRPA, a secured lender

will "not be deemed an owner or operator with respect to the

site securing the loan" if certain conditions are met. G. L.

c. 21E, § 2 (c). However, this exemption from liability under

OHMRPA applies only to "releases and threats of release that

first begin to occur before such secured lender acquires

ownership or possession of the site . . . ." G. L. c. 21E,

§ 2 (c) (1). "Nothing in this definition shall relieve a

secured lender of any liability for a release or threat of

release that first begins to occur at or from a site . . .

during the time that such secured lender has ownership or

7
The definition of "owner" in G. L. c. 21K references the
Massachusetts Oil and Hazardous Material Release Prevention Act
(OHMRPA). Both c. 21K, which addresses the mitigation of
hazardous materials, and the OHMRPA utilize the same definition
of "hazardous material."
 16

possession of such site . . . for any purpose." Id.

Furthermore, "[n]otwithstanding any other provision of this

definition, a secured lender shall be deemed an owner or

operator of an abandoned site . . . if such secured lender . . .

held ownership or possession of such site . . . immediately

prior to such abandonment." G. L. c. 21E, § 2 (c) (2).

The plaintiffs argue that the foreclosure ordinance

forcibly exposes them to liability under the OHMRPA if, in

complying with the mandate of the ordinance, they enter a

property and become mortgagees in possession during or after

which a release or threat of release of hazardous material

occurs. The imposition of liability in such circumstances would

defeat the safe harbor for secured lenders provided by the

Legislature. We agree.

The OHMRPA is a "comprehensive" statute. Taygeta Corp.,

436 Mass. at 223. "Legislation which deals with a subject

comprehensively . . . may reasonably be inferred as intended to

preclude the exercise of any local power or function on the same

subject because otherwise the legislative purpose of that

statute would be frustrated." Bloom, 363 Mass. at 155. Here,

we can infer that the Legislature has decided that secured

lenders not in possession (nor previously in possession) of a

site should not be liable for any hazardous material releases at

that site. The foreclosure ordinance alters that calculus by
 17

requiring mortgagees not yet in possession to enter the property

and assume possession. In so doing, a secured lender may become

liable under the OHMRPA through compliance with the foreclosure

ordinance. As such, the foreclosure ordinance is inconsistent

with the OHMRPA.

The city argues that the very language of the ordinance

eliminates any inconsistency between it and the OHMRPA because

the ordinance does not apply to owners "exempt from such actions

by Massachusetts General Laws." We are unpersuaded by this

argument. "The existence of legislation on a subject . . . is

not necessarily a bar to the enactment of local ordinances and

by-laws exercising powers or functions with respect to the same

subject[,]" but can be a bar when "the Legislature has . . .

[impliedly] . . . forbidden the adoption of local ordinances and

by-laws on that subject." Del Duca v. Town Adm'r of Methuen,

368 Mass. 1, 11 (1975), quoting Bloom, 363 Mass. at 156. Simply

put, a municipality has no regulatory power in a field already

wholly occupied by the State unless explicitly granted such

power to regulate by the statute itself. The city cannot exempt

a secured lender from the foreclosure ordinance if it has no

power to include the lender. See N.J. Singer & J.D. Shambie

Singer, Sutherland Statutory Construction § 47:11, at 326-327

(7th ed. rev. 2014) ("A true statutory exception exists only to

exempt something which would otherwise be covered by an act").
 18

c. State sanitary code. The plaintiffs challenge the

foreclosure ordinance by claiming it is inconsistent with the

Sanitary code and the regulations promulgated under it, 105 Code

Mass. Regs. § 400 (1993), together known as the State sanitary

code (code). "General Laws c. 111, §§ 127A-127N, reflect a

comprehensive legislative attempt to effectuate compliance with

minimum health and safety standards for residential premises."

Negron v. Gordon, 373 Mass. 199, 202 (1977). A local board of

health is permitted "to adopt such rules and regulations as, in

its opinion, may be necessary for the particular locality under

its jurisdiction; provided, such rules and regulations do not

conflict with the laws of the commonwealth or the provisions of

the code." G. L. c. 111, § 127A. Enforcement of the code and

any local regulations falls to the local board of health or the

Department of Public Health by service of an order on the owner

of a property. Id. 105 Code Mass. Regs. § 400.200-400.300

(1993). The local board of health and the Department of Public

Health, as well as a tenant, also may petition a court to

enforce the requirements of the code. G. L. c. 111, §§ 127A,

127C. Among the available remedies are criminal or civil

injunctive relief, correction of the violation by the board

itself at the expense of the owner, appointment of a receiver,

or condemnation and demolition of the building. G. L. c. 111,
 19

§§ 127A, 127B, 127I. 105 Code Mass. Regs. § 400.700(B) (1993).

105 Code Mass. Regs. §§ 410.910, 410.950-410.960 (2007).

The appointment of a receiver, while a familiar instrument

of equity, is an extraordinary remedy. Perez v. Boston Hous.

Auth., 379 Mass. 703, 735-736 (1980). General Laws c. 111,

§ 127I, "set[s] forth circumstances that permit a court to

appoint a receiver (i.e., when it 'may' do so) as well as those

circumstances when appointment of a receiver is mandated (i.e.,

when it 'shall' do so)." Boston v. Rochalska, 72 Mass. App. Ct.

236, 243 (2008). Section 127I "require[s] the appointment of a

receiver to undertake remedial action when there are ongoing

sanitary code violations in an occupied building 'and the court

determines that such appointment is in the best interest of the

occupants residing in the property,' but mak[es] the appointment

discretionary when the building is unoccupied or, if occupied,

when the best interests of occupants do not require

appointment." Id. at 244.

The foreclosure ordinance amalgamates two separate

enforcement procedures envisioned in the State sanitary code

into a single regulatory mechanism: the use of the surety bond

and direct entry by an enforcement authority. Under the State

sanitary code, an enforcement authority initially can only issue

an order to the owner (as defined by 105 Code Mass. Regs.

§ 410.020 [2007]) or petition a court for enforcement. Only
 20

after "a failure to comply with an order . . . results in a

condition which endangers or materially impairs the health or

well-being of the occupant or the public" may an enforcement

authority cause "such proper cleaning or repair and charge the

responsible person or persons as hereinbefore provided with any

and all expenses incurred." 105 Code Mass. Regs. § 410.960(A)

(2007). The code requires only receivers to post a bond, not

owners subject to the code. G. L. c. 111, § 127I. Even then,

receivers are required to post a bond only after appointment by

a court of competent jurisdiction. Id.

The foreclosure ordinance requires an owner, subject only

to an administrative order and fine followed by charged expenses

under the code, to post a bond to ensure compliance with the

ordinance. The building commissioner may draw on the bond after

failure of an owner to pay within seven days the expenses of a

direct entry by the building commissioner or his agents. The

code envisions that expenses for such a direct entry can be

recouped by an action at law or by placing a lien on the

property. 105 Code Mass. Regs. § 410.950(D) (2007). The

foreclosure ordinance places a heavier burden on an owner than

does the code to ensure enforcement of essentially the same

mandates by requiring an owner to post a bond where the code

would require none. "Given the comprehensiveness of the [code]

and the remedies provided therein," it is inconsistent with the
 21

code for a municipality to require a surety bond of an owner in

situations where the code would require none. See Boston Gas

Co. v. Newton, 425 Mass. 697, 704-705 (1997). In addition, the

code's provision for the use of a surety bond limits the city's

power to require such a bond in any other context of code

enforcement. See 105 Code Mass. Regs. § 400.015 (1993) ("Nor

should the existence of the State Sanitary Code limit or

otherwise affect the power of any health authority with respect

to any matter for which the State Sanitary Code makes no

provision"). The city, by the terms of the code, may require

only a surety bond in the manner the code allows. The

foreclosure ordinance requires a surety bond in circumstances

different from those of the code. Thus the foreclosure

ordinance conflicts with the code.8

4. Lawful fee. The plaintiffs challenge the foreclosure

ordinance by characterizing it as an unlawful tax instead of a

lawful fee. The city imposes a charge on foreclosing mortgagees

8
Although we determine that State law preempts the
foreclosure ordinance, the effect of this preemption vis-à-vis a
general severability clause is not before us. "Neither a trial
judge nor this court can consider such alleged ordinances unless
they are put in evidence." Fournier v. Central Taxi Cab, Inc.,
331 Mass. 248, 249 (1954), and cases cited. Nor are local
ordinances "an appropriate subject of judicial notice."
Lawrence v. Falzarano, 380 Mass. 18, 25 n.10 (1980). See Mass.
G. Evid. § 202(c) (2013). We note that the foreclosure
ordinance, unlike the mediation ordinance, does not have a
severability provision specific to itself.
 22

to register the property with the city.9 "A municipality does

not have the power to levy, assess, or collect a tax unless the

power to do so in a particular instance is granted by the

Legislature." Silva v. Attleboro, 454 Mass. 165, 168 (2009),

quoting Commonwealth v. Caldwell, 25 Mass. App. Ct. 91, 92

(1987). The plaintiffs bear the burden of demonstrating the

invalidity of the exaction. Id. The operation of the exaction,

rather than the specific language used to describe it,

ultimately demonstrates its nature. Id. Fees share certain

common characteristics that distinguish them from taxes and

establish the lens through which to determine their nature.

Doe, Sex Offender Registry Bd. No. 10800 v. Sex Offender

Registry Bd., 459 Mass. 603, 610 (2011) (Doe No. 10800).

Utilizing these characteristics, we arrive at the conclusion

that the monetary exaction at issue here is a lawful fee, and

not a tax.

a. Particularized benefit. Fees "are charged in exchange

for a particular governmental service which benefits the party

paying the fee in a manner 'not shared by other members of

society.'" Emerson College v. Boston, 391 Mass. 415, 424

(1984), quoting National Cable Television Ass'n v. United

States, 415 U.S. 336, 341 (1974). In Doe No. 10800, we examined

9
Because we determine that the city's requirement that a
registrant post a bond is preempted by State law, we analyze
this question as if the city charged a fee directly instead of
retaining part of the bond.
 23

whether an exaction that the Legislature authorized from sex

offenders who were required to register with a supervisory board

constituted a regulatory fee or tax. 459 Mass. at 605, 610-615.

There, we further affirmed our reasoning in Silva, 454 Mass. at

170, that "the particularized benefit provided in exchange for

the [regulatory fee] is the existence of the regulatory scheme

whose costs the fee serves to defray." Such fees "serve

regulatory purposes either 'directly by, for example,

deliberately discouraging particular conduct by making it more

expensive,' or indirectly by defraying an agency's regulation-

related expenses." Id. at 171, quoting Nuclear Metals, Inc. v.

Low-Level Waste Mgt. Bd., 421 Mass. 196, 201-202 (1995).

"In the context of regulatory fees, we construe the term

'benefit' broadly to encompass the provision of particular

governmental services to a group of individuals whose actions

have necessitated the regulatory scheme in the first instance

and who should shoulder the burden of paying for such services.

That this may not be viewed as a 'benefit' to [one subject to

the scheme] in the traditional sense of the word does not

detract from the fact that a governmental entity has provided a

particularized 'service' to individuals who require it." Doe

No. 10800, 459 Mass. at 611. The city has stated its belief

that properties in foreclosure are more likely to become

nuisances than other properties and that a downward spiral of
 24

urban blight can occur as nuisance properties in foreclosure

affect the values of other properties around it, thereby

increasing the likelihood of foreclosure. The foreclosure

ordinance attempts to regulate this phenomenon by addressing the

period of time between when a mortgagor has stopped tending to

the property (due either to the futility of the exercise in the

face of foreclosure and unavoidable eviction or to the fact that

the property is already vacant with no party responsible for its

care) and when the mortgagee or new occupant comes into

possession. While the act of foreclosing by mortgagees should

not be equated with the acts of those subject to the regulatory

scheme in Doe No. 10800, foreclosure is nevertheless the

operation that triggers the conditions giving rise to the

perceived necessity for the regulatory scheme. That this

regulatory scheme is not viewed as a benefit by the plaintiffs

does not detract from the fact that the city provides a

particularized service to the plaintiffs in the form of

maintaining property values of their loan collateral through

enforcement of the foreclosure ordinance after foreclosure has

commenced. See Nuclear Metals, Inc., 421 Mass. at 205 ("It is

appropriate that the entities which generate low-level

radioactive waste (and not the taxpayers of the Commonwealth)

should shoulder costs associated with protecting the general

public from the hazards posed by the waste").
 25

b. Costs. Fees, unlike taxes, "are collected not to raise

revenues but to compensate the governmental entity providing the

services for its expenses." Emerson College, 391 Mass. at 425.

Here, the fee is paid into "an account for expenses incurred in

inspecting, securing, and marking said building and other such

buildings that are not in compliance with this Section." See

id. at 427 (stating deposit of exaction into general fund

nondecisively weighs in favor of tax, not fee). "The critical

question is whether the fees are reasonably designed to

compensate an entity for its anticipated regulatory expenses."

Doe No. 10800, 459 Mass. at 612. In reviewing this question,

"reasonable latitude must be given to the agency in fixing

charges to cover its anticipated expenses in connection with the

services to be rendered." Southview Coop. Hous. Corp. v. Rent

Control Bd. of Cambridge, 396 Mass. 395, 403 (1985). Such

charges should "not be scrutinized too curiously even if some

incidental revenue were obtained." Id., quoting Opinion of the

Justices, 250 Mass. 591, 602 (1924). "Relevant expenses include

both the direct and the indirect or incidental costs associated

with the particular government service." Doe No. 10800, 459

Mass. at 613.

The plaintiffs argue that the funds that do not apply

directly to the registered compliant properties are utilized to

secure other, noncompliant properties and are never recovered by
 26

the original payor. These excess monies, therefore, indicate

that the exaction is excessive to the costs of the benefit.10

This argument passes over the fact that the foreclosure

ordinance envisions that the expenditures of the city in

entering and securing a noncompliant property will indeed be

initially financed by a portion of the administrative fee from

the compliant properties paid into an account to fund the city's

actions in securing the noncompliant properties but that

ultimately the penalties that other properties will incur

through noncompliance will cover those expenditures of the city.

This initial financing of a portion of the regulatory scheme

beyond the simple processing and registration of a compliant

property is "an indirect or incidental cost[] associated" with

the foreclosure ordinance. Doe No. 10800, 459 Mass. at 613.

c. Voluntariness. The parties agree that the exaction at

issue in the foreclosure ordinance is involuntarily paid. We

have "consistently given less weight to the voluntariness

factor" in the context of regulatory fees. Silva, 454 Mass. at

172. The purpose of the foreclosure ordinance is "to promote

10
The foreclosure ordinance does not specify the amount of
the administrative fee. Therefore, although we discuss the role
of the exaction relative to costs and ultimately determine that
the exaction is a fee, we can make no further determination
whether the exaction unlawfully raises revenue or,
alternatively, compensates the city on the record before us. We
note that the mere fact that a fee creates some revenue does not
transform the fee into a tax. See Opinion of the Justices, 250
Mass. 591, 602 (1924).
 27

the health, safety and welfare of the public, to protect and

preserve the quiet enjoyment of occupants, abutters and

neighborhoods, and to minimize hazards to public safety

personnel inspecting or entering such properties." Exactions

founded upon the police power to regulate particular activities

are regulatory fees. See id. at 168. Accordingly, in this

context, the issue of voluntariness "is of no relevance in

determining whether that charge is a fee or a tax." Id. at 172.

In conclusion, for the aforementioned reasons, we determine

that the city's exaction from those subject to the foreclosure

ordinance would be a lawful fee, rather than a tax.11

Accordingly, we answer the second certified question in the

negative.

We recognize that the city of Springfield has attempted to

address the serious problem of urban blight within its borders

through these ordinances. Although we conclude that the city

may not achieve its goal by ordinance as it has here attempted,

a solution may be provided through the Legislature.

The Reporter of Decisions is to furnish attested copies of

this opinion to the clerk of this court. The clerk in turn will

transmit one copy, under the seal of this court, to the clerk of

11
The plaintiffs also argue that the city lacks the
statutory authorization to impose this exaction. The plaintiffs
point to nothing in the record to support this contention. We
assume, without deciding, that the city does have this authority
pursuant to G. L. c. 40, § 22F, and that the city has duly
adopted this provision.
 28

the United States Court of Appeals for the First Circuit, as the

answers to the questions certified, and will also transmit a

copy to each party.

So ordered.