Federal judge voids Peninsula Township rules, awards wineries nearly $50 million

Peninsula Township now faces a near-$50 million judgment after a federal judge struck down the rules that governed 11 wineries on Old Mission Peninsula, a ruling that could force the small Grand Traverse County township to weigh tax hikes, service cuts or asset sales to cover the loss.

U.S. District Judge Paul L. Maloney of the Western District of Michigan issued a 75-page bench opinion on July 7, 2025, finding that key parts of the township’s land-use ordinance violated the First Amendment and the Dormant Commerce Clause. The case, filed by the wineries in October 2020, grew out of a 16-year fight over how Peninsula Township could regulate farm-based wineries on a narrow peninsula that carries about 42 miles of shoreline and funnels nearly all traffic over one main access route.

Maloney found that township rules went too far when they required wineries to promote Peninsula agriculture at events, a form of compelled speech, and when they limited what branded merchandise wineries could sell. He also rejected grape-sourcing provisions that favored grapes grown on Old Mission Peninsula over fruit from outside the township, ruling that those restrictions ran afoul of interstate-commerce protections. In one line that captured the scale of the case, Maloney said witnesses for the wineries “told a single story through 12 lenses...”

The award, reported variously as $49.2 million or rounded to $50 million, immediately turned a zoning dispute into a fiscal crisis for a township of about 6,000 residents. Peninsula Township’s zoning ordinance dates to June 5, 1972, and was designed to preserve the rural and viticultural character of the peninsula, but the ruling found that several of its restrictions could not survive constitutional review. The decision raises the stakes far beyond Old Mission Peninsula, where wineries, property owners and residents have long argued over tourism, traffic and the reach of local government.

Peninsula Township voted unanimously on July 14, 2025, to appeal. The case had already touched the Sixth Circuit Court of Appeals in 2022, when judges addressed intervention by Protect the Peninsula, the local advocacy group that joined the litigation. Since the verdict, township leaders have been reported to be weighing budget cuts, service reductions, possible asset sales and even a special assessment on residents, while winery representatives have pushed for settlement talks to end the litigation and set a clear path forward. The outcome now will determine not only who pays, but how much control a township can still exercise over agriculture on one of the county’s most visible landscapes.