Pro's Sports Bar & Grill, Inc. v. City of Country Club Hills ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-2082
P RO ’S S PORTS B AR & G RILL, INC.,
T HARON B RADLEY, C ARLA N ELSON
and P ATRICIA N ELSON,
Plaintiff-Appellees,
v.
C ITY OF C OUNTRY C LUB H ILLS,
an Illinois Municipal Corporation,
D WIGHT W ELCH, Mayor
and D EBORAH M. M C ILVAIN , Clerk,
Defendant-Appellants.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 08-cv-6031—Joan B. Gottschall, Judge.
A RGUED O CTOBER 29, 2009—D ECIDED D ECEMBER 16, 2009
Before F LAUM, M ANION, and W OOD , Circuit Judges.
F LAUM, Circuit Judge. This is a dispute between a bar,
Pro’s Sports Bar & Grill (“Pro’s”), and the City of Country
Club Hills (the “City”) over a liquor license. Pro’s claims
2 No. 09-2082
that it was given the standard liquor license for bars in
Country Club Hills. The City claims that the bar was
given a license that allows it to operate only with more
restricted hours than is typical. The license initially
given to Pro’s made no mention of an hours restriction.
After the City reissued the license with the restricted
hours and began enforcing them—without a hearing or a
vote by the city council—Pro’s brought a claim against
the City under 42 U.S.C. § 1983, alleging a violation of
both its procedural due process rights and its right to
equal protection. Pro’s then moved for a preliminary
injunction prohibiting the City from enforcing the
limited hours. The district court found that Pro’s was
likely to prevail on its due process claim (but not its
equal protection claim)1 and faced irreparable harm if
forced to continue operating under the more limited
hours. The district courted granted the preliminary in-
junction. The City appeals. For the reasons set forth
below, we affirm the district court’s decision.
I. Background
Pro’s is located at 18601 South Cicero Avenue, in the
City of Country Club Hills, a southern suburb of Chicago.
Tharon Bradley, Carla Nelson, and Patricia Nelson, the
owners of Pro’s, are also plaintiffs in this litigation. The
City of Country Club Hills is governed by an elected
mayor, an elected clerk, and ten elected aldermen (two
from each of the City’s five wards). The mayor, Dwight
1
On appeal, Pro’s does not rely on its equal protection claim.
No. 09-2082 3
Welch, and the clerk, Deborah McIlvain, are named as
defendants, along with the City itself.
To obtain a liquor license in Country Club Hills, a
business must apply and satisfy certain preliminary
requirements. The applicant must then secure from the
city council an ordinance granting that particular
business a license. The municipal code in Country Club
Hills defines several types of liquor licenses, two of
which are relevant here: Class A, for restaurants, and
Class B, for bars. The code also sets the permissible hours
of operation for these establishments. Both Class A and
Class B licenses allow the holder to remain open until
2 a.m., Monday through Friday, and 3 a.m. on Saturday
and Sunday.
Pro’s satisfied the application requirements for a liquor
license, and the city council considered an ordinance to
grant Pro’s a license on November 26, 2007. The parties
dispute what took place at this meeting. Helpfully, the
meeting was videotaped. The district court viewed this
video and summarized it in its written opinion
granting the preliminary injunction.
Thirty-nine minutes into the meeting, the council
turned to the “Economic Development” portion of its
agenda, the only item being whether to pass an
ordinance granting Pro’s a liquor license. Alderman
Tyrone Hutson, one of the aldermen for Ward 3, where
Pro’s is located, was granted the floor. He did not im-
mediately introduce the proposed ordinance, however.
Instead, he began by explaining that he wished to
“amend the ordinance, and place a time frame on the
liquor license.” He proposed limiting the hours of
4 No. 09-2082
alcohol sales to 11 p.m. on weekdays and 12:30 a.m. on
weekends. At Mayor Welch’s direction, Hutson intro-
duced the amendment via motion. Hutson called for a
vote, but Welch stated that a discussion of the amend-
ment must occur first. Welch spoke for about three
minutes about the license process generally, then observed
that Pro’s was surrounded by residential zoning. Welch
said that he did not have a problem with the hours pro-
posed by Hutson and emphasized that Pro’s license, like
all other licenses, would last only until May 1 of the
following year, at which time it would need to be re-
newed. He indicated that he traditionally defers on deci-
sions related to liquor licenses to the aldermen from the
particular ward where the business is to be located and
asked “Tom” if he had “anything to say.” “Tom” is not
identified in the video but was presumably Thomas
Comein, the other alderman from Ward 3. He agreed with
proposed hours and said that if there was a problem, the
police would take care of it.
Another alderman, Vincent Lockett, suggested moving
the weekday closing time to 11:30 p.m. so that patrons
would not have to leave before sporting events, such as
Monday Night Football, had ended. Welch opposed
the change, saying that just because the bar had to
stop serving liquor did not mean that patrons had to
leave.2 Welch then said, seemingly to someone in the
crowd, “You guys good with that? All right. All right. Let’s
move on.”
2
This appears to be an incorrect statement of law. See Country
Club Hills Municipal Code, § 13.3.06.
No. 09-2082 5
No vote was taken on the amendment. Instead, after
Welch directed the council to “move on,” Hutson intro-
duced, by motion, the original ordinance, a draft of
which had been prepared before the council meeting.
Hutson introduced it as “an ordinance providing for the
granting of a Class A liquor license” to Pro’s. The motion
received a second. Welch called for discussion and an
unidentified alderman asked whether the original or
amended ordinance was being considered. Welch re-
sponded:
This is amended, but we are going to have to put this,
I talked to our city attorney, we’ll have to put this
into a formal ordinance at the next council meeting,
but I’m going to give them permission to go ahead
and proceed, as the Liquor Commissioner, based on
the Council’s action tonight.
Welch then proceeded to a roll call, and all ten alderman
voted in favor.
The council next met in December of 2007, but did not
revisit Pro’s liquor license. An ordinary Class A liquor
license—with no mention of the restricted hours—was
issued to Pro’s. Bradley, one of the owners, obtained
this license from the clerk, McIlvain, on January 4, 2008.
However, a new “Class A-1” liquor license was “reissued”
on January 8, 2008, signed by McIlvain and Welch. Like
the original “Class A” license, the “Class A-1” license
does not mention any time limitations on the service of
alcohol. The municipal code does not have any
provision describing a Class A-1 license.
6 No. 09-2082
At the preliminary injunction hearing, McIlvain
testified that she was uncertain why she “reissued”
the license to Pro’s, but speculated that she did so in
anticipation of an ordinance that would have created a
Class A-1 license with the limited hours discussed at the
November 2007 council meeting. No such ordinance
was ever adopted. However, the owners of Pro’s claim
that a police officer subsequently showed them the first
page of a draft ordinance that purports to establish such
a classification. Pro’s alleges that the police began en-
forcing these time limitations, resulting in several cita-
tions, arrests of management, and frequent visits by the
police to Pro’s at or shortly before the new closing time.
Bradley testified that this resulted in lost business and
revenues, identifying in particular the refund of fees to
those who had booked private parties that were
terminated early by police and lost bookings to other
bars in the City that could remain open later.
In March of 2008, the city council entertained a motion
to extend Pro’s hours to those of a regular license
holder. That ordinance did not pass, receiving five votes
in support and five votes against.
Pro’s applied for a new license prior to May 1, 2008, as
all licensees were required to do. Pro’s applied for a
Class B license, apparently at the direction of Welch.
When Pro’s received its new Class B license, it stated the
following limitation:
This Liquor License is hereby Granted to Pro’s
Sports Bar & Grill to Sell/Dispense Liquor in the City
of Country Club Hills, until 11:30 pm Sunday
No. 09-2082 7
through Thursday, and until 12:30 pm 3 Friday and
Saturday . . . .
These new hours were not voted on by the city
council, and are not the hours that were discussed at the
November 26, 2007 meeting. At the preliminary
injunction hearing, McIlvain testified that when she
receives an application for liquor license renewal, she
first confirms that the establishment’s dram shop
insurance is still valid and then issues a new one-
year license with the same terms and conditions that the
establishment’s previous license had contained.
Pro’s filed the instant litigation on October 21, 2008,
seeking damages and an injunction under 42 U.S.C. § 1983.
On October 31, 2008, Pro’s moved for a preliminary
injunction. After a preliminary injunction hearing on
December 8 and 9, 2008, the district court concluded that
Pro’s was likely to prevail on its due process claim and
issued the injunction. The City now appeals.
II. Analysis
On appeal from the grant of a preliminary injunction, we
review the district court’s legal rulings de novo, its
factual determinations for clear error, and its balancing
of the factors for an abuse of discretion. See United
Airlines, Inc. v. United Airlines Pilot’s Ass’n, Int’l, 563
F.3d 257, 269 (7th Cir. 2009).
3
All parties agree that “pm” is a typographical error, and
that 12:30 a.m. was intended.
8 No. 09-2082
The Fourteenth Amendment prohibits states from
depriving a person of “life, liberty, or property, without
due process of law.” This prohibition applies with equal
force to municipalities. See Home Tel. & Tel. Co. v. City of
Los Angeles, 227 U.S. 278 (1913). We take a two-step ap-
proach to procedural due process claims: first, we ask
whether the plaintiff has been deprived of a protected
liberty or property interest; if so, we ask whether the
deprivation occurred without due process. Doe v. Heck,
327 F.3d 492, 526 (7th Cir. 2003).
Once granted, an Illinois liquor license is a form of
property within the meaning of the due process clause.
See Club Misty, Inc. v. Laski, 208 F.3d 615, 618 (7th Cir.
2000) (citing Reed v. Village of Shorewood, 704 F.2d 943, 948-
49 (7th Cir. 1983)). This interest extends to the license’s
annual renewal. Id. Like revocation during the term of
a license, nonrenewal requires cause and a hearing. Id.;
see also 235 ILCS 5/7-1 to 7-14 (detailing the revocation
process). The City maintains, however, that from the
beginning, Pro’s license was for the limited hours sug-
gested by Alderman Hutson, and thus no deprivation
occurred when the license was renewed with limited
hours. Pro’s, on the other hand, maintains that it was
granted an unrestricted liquor license and was later
deprived of that license.
Determining the nature of Pro’s original license is a
matter of statutory interpretation and thus a question of
law that we review de novo. Tammi v. Porsche Cars N. Am.,
Inc., 536 F.3d 702, 709 (7th Cir. 2008). Under Illinois law,
municipal ordinances are interpreted according to the
No. 09-2082 9
traditional rules of statutory construction. Neri Bros. Const.
v. Village of Evergreen Park, 841 N.E.2d 148, 153 (Ill. App.
Ct. 2005). Illinois directs courts to ascertain and give
effect to the intent of the enacting body, the clearest
indicator of which is the language of the ordinance
itself. Id. at 153-54; see also People v. Donoho, 788 N.E.2d
707, 715 (Ill. 2003).
The original proposed ordinance would have granted
Pro’s a Class A liquor license without additional restric-
tions. The version signed by the mayor and clerk is identi-
cal. Under Illinois law “the official acts of municipal
corporations must be recorded and the records are the
only lawful evidence of the action to which they refer.”
See Western Sand & Gravel Co. v. Town of Cornwall, 119
N.E.2d 261, 264 (Ill. 1954); see also 65 ILCS 5/1-2-6 (“The
contents of all municipal ordinances . . . may be proved
by the certificate of the municipal clerk, under the seal of
the corporation.”) Here, the municipal record—the
signed ordinance—does not contain any hours limitation.
The City advances two different but related arguments
to contest the straightforward language of the ordinance.
First, the City argues that the signed ordinance does not
reflect the city council’s action on November 26, 2007
because of a scrivener’s error. Rather than adopt the
proposed ordinance, the City maintains, the council
adopted an amended ordinance with limited hours. In
the alternative, the City suggests that we interpret the
ordinance based on the intent of the council, which it
argues was to impose an hours restriction on Pro’s.
10 No. 09-2082
Because there was never a vote on Alderman Hutson’s
proposed amendment—indeed, the ordinance had not yet
been introduced at the time the amendment was dis-
cussed—the City relies on Mayor Welch’s comments
before the roll call vote to establish that the council voted
on the amended ordinance. However, Welch’s comments
were at best ambiguous, if not actually contradictory.
He first stated, “This is amended,” but went on to say,
“We’ll have to put this into a formal ordinance at the
next council meeting.” The City argues that the mayor
meant only that the clerk would have to change the text
of the ordinance so that its language reflected the time
limitations, but that would not require action at the
next council meeting. It is unclear how the amendment
could take effect without a vote. Thus, it appears that
the published ordinance accurately reflects the pro-
ceedings before the city council on November 26, 2007.
It is true that we have previously refused to hold a
city to a scrivener’s error in the published version of a
municipal ordinance. See Christ Universal Mission Church
v. City of Chicago, 362 F.3d 423, 428 (7th Cir. 2008). But
there is no evidence of a clerical error here. The City
has not argued that the text of the ordinance considered
by the city council at the November 26, 2007 meeting
differs from the text of the ordinance signed by the
mayor and clerk. Cf. Christ Universal, 362 F.3d at 428. Nor
does it contain an obvious typographical error, like
writing “12:30 p.m.” when it is clear from the context
that “12:30 a.m.” was intended. Rather, the City is
arguing that the clerk should have added an hours re-
striction to the text of the ordinance before its publica-
No. 09-2082 11
tion. But the clerk did not have authority to make this
change, as the council passed no amendment to the
ordinance before adopting it.
We also decline the City’s invitation to rewrite the
ordinance so that it conforms to its characterization of the
council’s intent. If “the statutory language is clear and
unambiguous, then there is no need to resort to other
aids of construction.” Carter v. Tennant Co., 383 F.3d 673,
682 (7th Cir. 2004) (citing In re D.L., 727 N.E.2d 990,
994 (Ill. 2000)). The plain language of the ordinance
confers a Class A license on Pro’s. A separate section of
the municipal code defines the hours of operation for
Class A license holders. Nothing in the text of the ordi-
nance suggests that the council intended to amend that
section or to exclude Pro’s from its effects. Thus, Pro’s has
a protected property interest in a liquor license with
the same hours as other license holders in the City
of Country Club Hills.
Having established a property interest, Pro’s must still
show that it has been deprived of that property without
due process of law. Pro’s did not receive a pre-deprivation
hearing or any of the other protections of the revocation
process. See 235 ILCS 5/7-1 to 7-14. We have previously
held that denying renewal to a liquor license holder
without a hearing or other adjudication violates due
process. Club Misty, Inc., 208 F.3d at 622.
The City acknowledges that Pro’s did not receive any
sort of hearing when its hours were curtailed. Instead,
relying on Veterans Legal Defense Fund v. Schwartz, 330
F.3d 937, 941 (7th Cir. 2003), and New Burnham Prairie
12 No. 09-2082
Homes, Inc. v. Village of Burnham, 910 F.2d 1474, 1480 (7th
Cir. 1990), the City argues that a state court action for
mandamus would provide all the relief that the plain-
tiffs seek, precluding their procedural due process
claim. These cases rest on the principle that when a state
officer acts in a “random and unauthorized” way—by
unpredictably departing from state law, for example—
the state has no opportunity to provide a pre-deprivation
hearing and may instead satisfy due process by providing
an adequate post-deprivation remedy. See Easter House
v. Felder, 910 F.2d 1387, 1402 (7th Cir. 1990) (en banc).
But mandamus would be an incomplete remedy here.
Pro’s is asking for more than an injunction compelling
the City to issue an unrestricted liquor license. Cf.
Schwartz, 330 F.3d at 941 (holding that plaintiffs, who
sought injunctive relief under 42 U.S.C. § 1983, could get
same relief in a state court mandamus action). The
owners of Pro’s seek damages to compensate them for
the period of time in which the restricted hours were
enforced against them. They allege these damages were
substantial, resulting in lost business in excess of
$50,000. Because no state remedy exists to compensate
plaintiffs for these damages, Pro’s is not foreclosed from
bringing a due process claim.
Finally, we find no abuse of discretion in the district
court’s balancing of the preliminary injunction factors.
A preliminary injunction requires both a showing of
irreparable injury and a likelihood of success on the
merits. Hoosier Energy Rural Elec. Co-op, Inc. v. John Hancock
Life Ins. Co., 582 F.3d 721, 725 (7th Cir. 2009). The district
court concluded that the harm to Pro’s was irreparable
because it was difficult to ascertain the specific amount
No. 09-2082 13
of revenue being lost, and because damages might
come too late to adequately compensate the plaintiff’s
business. See Hess Newmark Owens Wolf, Inc. v. Owens,
415 F.3d 630, 632 (7th Cir. 2005) (“[I]t is precisely the
difficulty of pinning down what business has been or
will be lost that makes an injury ‘irreparable.’ ”); Somerset
House, Inc. v. Turnock, 900 F.2d 1012, 1018 (7th Cir.
1990) (holding that harm is irreparable where damages
“would come too late to save the plaintiff’s business”). The
district court heard live testimony on Pro’s financial
situation and the difficulty of determining exactly how
much revenue Pro’s was losing to other bars who
could remain open later. Nothing suggests that the
district court’s factual findings were erroneous. The
City argues that allowing the preliminary injunction to
stand harms the public interest in alcohol regulation.
Whatever force the City’s argument might otherwise
have, the City cannot have an interest in enforcing an
ordinance that it did not enact. Given the strong likelihood
of success on the merits, the concrete and irreparable
harm to Pro’s outweighs any interest advanced by the
City in continuing to enforce the hours limitation.
III. Conclusion
For the foregoing reasons, we A FFIRM the district
court’s grant of a preliminary injunction.
12-16-09