Brown v. City of Royal Oak ( 2006 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 06a0774n.06
Filed: October 18, 2006
Case No. 05-1238, 05-1483
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JOHN MARK BROWN, )
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
CITY OF ROYAL OAK, MICHIGAN, et al., ) DISTRICT OF MICHIGAN
)
Defendants-Appellees. )
)
_______________________________________ )
)
)
BEFORE: BATCHELDER, SUTTON, Circuit Judges; and FORESTER, District Judge.*
ALICE M. BATCHELDER, Circuit Judge. Plaintiff-Appellant, John Mark Brown
(“Brown”), his mother, and his brother were the successor trustees of the Barclay Trust, which held
the stock and liquor license of the Redcoat Tavern (“the Redcoat”), located in Royal Oak, Michigan.
In 2002, the Trust submitted to the requisite authorities an application to transfer the stock and liquor
license to Brown and his brother. Several months later, the Trust withdrew the application and
Brown filed this action against the City of Royal Oak, the Royal Oak Police Lieutenant Donald
Foster, Assistant City Attorney James Marcinkowski, City Manager Lawrence Doyle, Police Chief
*
The Honorable Karl S. Forester, United States District Judge for Eastern District of Kentucky, sitting by
designation.
Ted Quisenberry, and City Attorney Charles Semchena, (“Defendants”).1 The twelve-count
complaint seeks declaratory and injunctive relief as well as compensatory and punitive damages, and
includes claims under 42 U.S.C. § 1983 that the Defendants’ actions with regard to the application
for transfer of the stock and liquor license denied Brown due process, equal protection and the
fundamental right to choose a career and receive stock, and that the Defendants had failed to prevent
these violations of Brown’s rights. The complaint also includes claims of conspiracy under 42
U.S.C. § 1985(3); negligent failure to prevent constitutional violations, actionable under 42 U.S.C.
§ 1986; malicious abuse of process; denial of due process, equal protection and First Amendment
rights; claims under RICO, 18 U.S.C. § 1962; and state law claims for libel and slander and
intentional infliction of emotional distress.
The district court denied Brown’s motion for partial summary judgment and granted
Defendants’ motion for summary judgment on the RICO claim, dismissing it with prejudice. The
court dismissed the remaining federal claims without prejudice as unripe; and, having dismissed all
of the federal claims, dismissed the state law claims without prejudice. Brown appeals that order.
The court denied Defendants’ claims for attorneys’ fees and Defendants appeal. As we explain
below, we AFFIRM the dismissal of Brown’s due process and equal protection claims without
prejudice. We AFFIRM the dismissal of Brown’s remaining federal claims, but remand with
instructions that they be dismissed with prejudice. Finally, we AFFIRM the dismissal of the state
law claims without prejudice and the denial of Defendants’ motion for attorney fees and costs.
1
The City of Royal Oak has asserted governmental immunity consistent with the Michigan Supreme Court’s
ruling in Ross v. Consumers Power Co., 420 Mich. 567 (1984), and all other defendants have asserted qualified
immunity. At the time of the complaint, Defendants were all government officials acting in their official capacities and
assert immunity from personal civil liability in that their actions did not violate clearly established statutory or
constitutional rights. See Harlow v. Fitzgerald, 457 U.S. 800, 817-18 (1982). The district court, finding that it lacked
jurisdiction over Plaintiff’s claims, did not reach the governmental and qualified immunity defenses.
2
I. BACKGROUND
Michigan law requires the Michigan Liquor Control Commission (“MLCC”) to approve any
transfer of a liquor license or of more than 10% stock ownership in an establishment holding a liquor
license. M.C.L. § 436.1529(1). The MLCC considers several factors in approving transfer
applications, including the approval of the local legislative body in which the applicant’s place of
business is located, the opinions of local law enforcement, the applicant’s past convictions for a
felony or a crime involving violence, and any sentences imposed for specific offenses. See M.C.L.
§ 436.1501. Furthermore, the ordinances of the City of Royal Oak provide that “the transfer of
ownership of existing [liquor] licenses . . . will be approved at the sole discretion of the City
Commission,” and that “transfer of ownership of existing licensed establishments shall be reviewed
by the LLC Committee and approved or disapproved by the City Commission.” Royal Oak
Ordinance 2001-06 §§ 2 and 6.
On October 18, 2002, the Barclay Trust submitted the Redcoat stock and liquor license
transfer application to Royal Oak’s Lieutenant Foster. Lt. Foster then performed criminal
background checks of Brown, his brother, and his mother, as part of the criminal investigation report
required by the MLCC. The background checks revealed that Brown had been placed on probation
by the state court in Florida after he was involved in a hit and run accident in 1992; that he had
violated that probation by traveling to Michigan in 1995 without first procuring the consent of his
probation officer; and that there was an outstanding Florida warrant for his arrest for the probation
violation. Lt. Foster’s report also indicated that Kaye Barclay met the police department’s
requirements, but concluded that Brown and his brother did not. On December 27, 2002, Royal Oak
Police arrested Plaintiff on the Florida arrest warrant. On December 30, 2002, Lt. Foster emailed
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the criminal investigation report to City Manager Doyle, and sent the report to the MLCC, Assistant
City Attorney Marcinkowski, and Police Chief Quisenberry.
A scheduled January 2003 Subcommittee meeting regarding the Redcoat transfer application
was adjourned to give Brown the opportunity to obtain cancellation of the Florida warrant. After
a second adjournment in February 2003, the Barclay Trust asked to adjourn the next meeting, now
rescheduled for March 6, 2003. The Subcommittee denied that request and advised the trustees to
attend the meeting. The trustees did not appear at that meeting. Rather, on March 5, 2003, the
Barclay Trust withdrew its liquor license and stock transfer application from the MLCC, and on
March 7, 2003, from the City of Royal Oak. On March 14, Brown and his brother resigned as
successor trustees of the Barclay Trust. Kaye Barclay subsequently filed an amended application for
transfer of the stock and license, naming only herself as trustee. Brown filed this action on June 13,
2003, and on November 10, 2003, the City of Royal Oak approved a transfer of the Redcoat’s stock
and liquor license to his mother, Kaye Barclay.
Brown’s complaint alleges that the Defendants engaged in a conspiracy of unlawful
retaliation, harassment, and “predetermined-denial” of the Barclay Trust’s transfer application. The
district court granted the Defendant’s motion for summary judgment, finding that Brown’s federal
and constitutional claims are not ripe for adjudication because the Trust, through Brown and the
other two successor trustees, withdrew its application before the Commission issued a final ruling.
The district court had original jurisdiction pursuant to 28 U.S.C. § 1331, federal question
jurisdiction, and supplemental jurisdiction under 28 U.S.C. § 1367. We have jurisdiction pursuant
to 28 U.S. § 1291.
II. FEDERAL CLAIMS
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A. RIPENESS
We review issues of justiciablity, such as ripeness, de novo. NRA of Am. v. Magaw, 132 F.3d
272, 278 (6th Cir.1997). “Ripeness is more than a mere procedural question; it is determinative of
jurisdiction. If a claim is unripe, federal courts lack subject matter jurisdiction and the complaint
must be dismissed.” Bigelow v. Michigan Dept. of Natural Resources, 970 F.2d 154, 157 (6th Cir.
1992) (quoting Southern Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 502 (9th Cir. 1990)).
“The ripeness inquiry arises most clearly when litigants seek to enjoin the enforcement of statutes,
regulations, or policies that have not yet been enforced against them.” Ammex, Inc. v. Cox, 351 F.3d
697, 706 (6th Cir. 2003).
As the Supreme Court has explained, the ripeness doctrine stems “both from Article III
limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction.” Reno
v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18, 113 S. Ct. 2485 (1993). The purpose of the
ripeness doctrine is
to prevent the courts, through avoidance of premature adjudication, from entangling
themselves in abstract disagreements over administrative policies, and also to protect
the agencies from judicial interference until an administrative decision has been
formalized and its effects felt in a concrete way by the challenging parties.
Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S. Ct. 1507 (1967).
In Ammex, Inc., we reiterated the standards for ripeness:
In determining whether a pre-enforcement challenge is ripe, three considerations
must be weighed. The first two deal with the “fitness of the issues for judicial
determination.” One aspect of the “judicial fitness of the issues” is the extent to
which the legal analysis would benefit from having a concrete factual context. The
second aspect of the “judicial fitness of the issues” is the extent to which the
enforcement authority’s legal position is subject to change before enforcement. The
third consideration deals with the “hardship to the parties of withholding court
consideration.”
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Ammex, 351 F.3d at 706 (citing Abbott Labs. 387 U.S. at 148-49). Furthermore, we noted that
“[w]here, as in this case, the statute at issue has not been enforced against [the plaintiff], and indeed
where a notice of intent to enforce has been explicitly withdrawn, the ripeness doctrine provides the
appropriate analysis for determining whether this case should be heard at this time.” Ammex, 351
F.3d at 706.
1. The Procedural Due Process Claim
In the case before us here, after their request for a third continuance was denied by the
Subcommittee, Brown and the other trustees of the Barclay Trust declined to pursue the Trust’s
transfer application to a final decision from the Royal Oak City Commission and instead withdrew
the application before the Commission could act. Because of Brown’s action, neither the MLLC nor
the Royal Oak city Commission ever denied the Trust’s transfer application or enforced any
regulation against the Trust. Therefore, as was the case in Ammex, there was no formalized
administrative decision.
Brown relies on Nasierowski Brothers Investment Co. v. Sterling Hts., 949 F.2d 890 (6th Cir.
1991), in arguing that his procedural due process claim is instantly cognizable in federal court
despite the Commission’s having issued no “final decision” on the transfer application. We find that
Nasierowski is inapposite.
Nasierowski involved a “pure” procedural due process claim arising from a zoning restriction
and Nazierowski’s request for an injunction prohibiting the city from enforcing an allegedly invalid
zoning classification against his property. Nasierowski, 949 F.2d at 893. The district court held that
a “taking” claim could not be adjudicated in federal court until the plaintiff had exhausted his
administrative remedies and failed in his efforts to obtain a use variance from the appropriate
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regulatory body. The district court held that because Nasierowski had failed to seek a variance from
the Board of Zoning Appeals, his claims were not ripe for adjudication. Id. We reversed, because
we concluded that Nasierowski had not alleged an unconstitutional “taking” of his property, but
instead had asserted that he was deprived of procedural due process when he was not accorded a
public hearing at which to challenge the zoning reclassification of his property. Id. We adhered to
the view that “a procedural due process claim is instantly cognizable in federal court without
requiring a final decision on a proposed development from the responsible municipal agency,” id.
at 894, explaining that
[c]onceptually, in the case of a procedural due process claim, “the allegedly infirm
process is an injury in itself,” whereas, in the context of a takings claim, the alleged
injury – a diminution in property value – cannot be assessed with any degree of
certainty until the municipality arrives at a final decision as to how the property
owner will be permitted to develop his property.
Id. (quoting Hammond v. Baldwin, 866 F.2d 172, 176 (6th Cir. 1989)). We went on to hold that
“Nasierowski’s injuries accrued and attached immediately when Council convened in executive
session and materially deviated from the recommendations of the planning commission, thus
subverting the purpose of the duly conducted notice and comment process.” Id.
Brown argues that Nasierowski controls because he has not alleged a “taking” claim, but has
asserted only that Defendants violated his due process, equal protection and First Amendment rights
by “issuing groundless liquor license violations, engineering his arrest, and issuing a false [police]
report regarding his criminal history, all to provide a basis for recommending disapproval of the
liquor license transfer request.” But Brown’s claim is not comparable to Nasierowski’s. Brown
cannot claim that he was not afforded a public hearing to challenge the denial of the Trust’s
application to transfer the stock and liquor license. Brown was not denied the opportunity for a
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public hearing, and the transfer application was never denied. Rather than attend the Subcommittee
meeting at which the application was scheduled to be considered, the trustees – of which Brown was
one – withdrew the application.
Brown has not alleged that the state or city requirements for transferring liquor licenses or
stock in liquor license establishments are unconstitutional, or that the Royal Oak City Commission
applied them arbitrarily in this case. Brown’s argument seems to be that if the Subcommittee had
considered the application, it would have relied on trumped up historical information and denied the
application, and therefore, the district court erred in distinguishing Nasierowski and in ruling that
Brown’s claims were unripe for federal adjudication. Nasierowski recognized that when “the
claimed injury is the infirmity of the process,” the claim is “instantly cognizable.” Nasierowski does
not extend to claims which are no more than speculation that the process, if it were permitted to
proceed, might be infirm. Brown’s “if we had some ham we could have a ham sandwich if we had
some bread” claim invites precisely the kind of premature adjudication that the ripeness doctrine
exists to prevent.
2. The Equal Protection Claim
Brown claims that the Defendants’ actions in regard to the application for transfer of the
stock and liquor license of the Redcoat deprived him of his right to equal protection of the laws. In
Bigelow v. Mich. Dep’t of Natural Res., 970 F.2d 154 (6th Cir. 1992), in which plaintiffs raised,
among other things, related claims of due process violation, equal protection violation, and improper
taking of property, we held that, like their taking claim, plaintiffs’ equal protection claim was subject
to ripeness review under Williamson County Regional Planning Comm’n v. Hamilton Bank of
Johnson City, 473 U.S. 172 (1985). Brown has not demonstrated the requisite finality here because
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he cannot show that his pursuit of further administration action would not be productive. See
Bigelow, 970 F.2d 158-59. Accordingly, we conclude that the district court did not err in dismissing
Brown’s equal protection claims on ripeness grounds.
B. The remaining federal claims
With the exception of the RICO claim,2 the district court dismissed all of Brown’s federal
claims because it found that they were not ripe for adjudication. We agree, as we have already
explained, that the procedural due process claim and the equal protection claim are not ripe. We will
affirm the dismissal of the remaining claims, but on other grounds. See Russ’ Kwik Car Wash, Inc.
v. Marathon Petroleum Co., 772 f.2d 214, 216 (6th Cir. 1985) (“A decision below must be affirmed
if correct for any reason, including a reason not considered by the lower court.”) We have combed
the 1690 pages of this record, and we conclude that Defendants are entitled to summary judgment
on each of Brown’s remaining federal claims because Brown has failed to provide sufficient
evidence to raise a genuine issue of material fact as to any of those claims.
We turn first to Count VI, Brown’s substantive due process claim. Brown claims that the
Defendants’ actions have deprived him of his “property interest relative to his right to receive a
bequest of Redcoat stock and a liberty interest relative to his right to pursue a career as manager of
[the Redcoat,]” and that “Defendant’s actions were arbitrary and capricious and there was no rational
basis for the refusal to recommend approval of the stock transfer with Plaintiff as trustee.” Brown
does not specify which Defendant acted arbitrarily, but from the context we assume he refers to Lt.
Foster, the officer who conducted the background investigation and recommended that Brown and
his brother did not meet the requirements for transfer of the stock and license. Brown apparently
2
The court dismissed the RICO claim on the merits and Brown does not appeal that aspect of the judgment.
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complains that actions actually taken by the Defendants – as opposed to actions that he believed they
would take had the application not been withdrawn – were arbitrary and without rational basis. The
record before the district court on summary judgment does not contain evidence to raise a genuine
issue of fact material to this claim. We note, for example, that it is undisputed that Brown is in fact
a manager of the Redcoat. There is no evidence in this record to support a claim that the Defendants
have prevented him from managing the tavern or from pursuing that career. Nor could a rational jury
conclude, based on the evidence in this record, that the citations issued to the Redcoat for violations
of the liquor laws over the years were issued in an attempt to provide a basis for some later action
by the City with regard to a transfer of the Redcoat’s stock or the liquor license, or that the
investigations of the Redcoat or Brown – or his mother and brother, for that matter – were
undertaken for abusive or illegitimate reasons. In short, the record contains no evidence of executive
action that could “properly be characterized as arbitrary, or conscience shocking, in a constitutional
sense,” County of Sacramento v. Lewis, 523 U.S. 833, 846 (1998), or of “conduct intended to injure
in some way unjustifiable by any government interest [which] is the sort of official action most likely
to rise to the conscience-shocking level.” Id. at 849.
Brown has not provided evidence from which a jury could conclude that the Defendants
refused or failed to prevent any of the harms of which he complains, or that Brown suffered any
cognizable injury as the result of an official policy or custom of the City pursuant to which the
individual Defendants acted or failed to act, or that any of the Defendants had or exercised any
supervisory authority over any other of the Defendants as alleged in Count II. Nor does the record
contain any evidence sufficient to permit a finding, required in order to prevail on Count III, a claim
under 42 U.S.C. § 1985(3), that any Defendant acted on the basis of racial or other class-based
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animus with regard to Brown or that any two of the Defendants acted in concert such that they were
engaged in a conspiracy. In the absence of the evidence necessary to establish the conspiracy
required to prevail on a claim under § 1985(3), Brown cannot prevail on Count IV, a claim that the
Defendants violated 42 U.S.C. § 1986, which provides a cause of action against persons who, with
knowledge of the §1985 conspiracy and the power to prevent the conspirators’ wrongful acts, fail
to do so. Finally, the record contains no evidence from which a jury could find in Brown’s favor on
Count VIII, his claim that the Defendants’ actions were in retaliation for the filing of – and prevailing
in – a lawsuit against the City. Certainly this would qualify as protected activity for purposes of a
claim of retaliation under the First Amendment, but the record clearly demonstrates that Brown was
not a party to that lawsuit.
We affirm the district court’s dismissal of these claims, but because Brown failed to provide
sufficient evidence to raise a genuine issue of fact material to any of them, they must be dismissed
with prejudice.
III. ATTORNEYS’ FEES
Defendants filed a Motion for Attorney Fees on December 29, 2004. On March 11, 2005,
the district court denied the Defendants’ motion, and Defendants now appeal. We review the denial
of a Motion for Attorney Fees for abuse of discretion. See Riddle v. Egensperger, 266 F.3d 542, 547
(6th Cir. 1995).
Defendants argue that they are entitled to attorneys’ fees and costs because Brown and his
counsel were aware from the outset of the litigation that his claims were without legal or factual
foundation. Defendants maintain that they are entitled to $206,677.00 in attorneys’ fees pursuant
to 42 U.S.C. § 1988 and 28 U.S.C. § 1927. Section 1927 of Title 28 provides:
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Any attorney or other person admitted to conduct cases in any court of the United
States or any Territory thereof who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to satisfy personally the
excess costs, expenses, and attorneys’ fees reasonably incurred because of such
conduct.
The district court disagreed and was not persuaded that the of conduct Brown’s counsel
“unreasonably and vexatiously” multiplied the proceedings:
The fact that plaintiff pleaded in his complaint that the liquor license transfer
application was withdrawn before the City Commission or MLLC ruled on the
transfer application does not demonstrate that plaintiff’s constitutional claims were
frivolous, unreasonable, without foundation, or pursued in bad faith, as required to
award reasonable attorney fees to a prevailing defendant under § 1988. While
ultimately unsuccessful, plaintiff advanced non-frivolous arguments why the ripeness
doctrine should not apply. See Nasierowski Brothers v. Sterling Hts., 949 F.2d 890,
894 (6th Cir. 1991).
On appeal, Defendants contend that the court abused its discretion in denying their motion
for fees. Noting that they had prevailed on the RICO claim below, entitling them to awards under
§ 1988, Defendants go on to argue that attorney fees should be awarded because the Plaintiff’s action
was frivolous, unreasonable, or without foundation. Defendants argue that under this standard for
awarding attorney fees spelled out in Christiansburg Garment v. EEOC, 434 U.S. 412, 421 (1978),
attorney fees should be awarded when the court finds that the claim was groundless at the outset “or
that the plaintiff continued to litigate after it clearly became so.” Hughes v. Rowe, 449 U.S. 5 (1980).
The district court recognized and considered the Christiansburg Garment framework for
analyzing Defendants’ motion and nevertheless held that Brown’s claims did not rise to the level of
“frivolous, unreasonable, or without foundation.” The court considered Brown’s argument from
Nasierowski and found it sufficient to withstand a challenge under § 1988 and § 1927. The court
reviewed the entire record and determined that fees were not warranted. Brown’s constitutional
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claims may have lacked real legal merit from the beginning, but his attempt to extend Nasierowski
presented a non-frivolous legal argument and the district court was entitled to deny attorneys’ fees
after considering the merits of that argument. While we might have come to a different result, we
find no abuse of discretion here.
CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court dismissing
Brown’s procedural due process and equal protection claims without prejudice because they are not
ripe. We AFFIRM the dismissal of all of the remaining federal claims, but because we conclude
that they are wholly unsupported by the evidence in the record, we remand those claims to the district
court with instructions to dismiss them with prejudice. We AFFIRM the dismissal of the state law
claims without prejudice on the grounds stated by the district court. Finally, we AFFIRM the denial
of Defendants’ motion for attorney fees and costs.
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