In 1994, Manta opened a comedy nightclub in the city’s CR-3 regional commercial zone. That was a permitted use in the zone. Six months later, Manta converted the club to an adult cabaret featuring topless entertainment. Adult businesses were not a permitted use in the zone. Manta filed a federal lawsuit claiming the ordinance’s locational limitations were unconstitutionally restrictive. The city responded with a state-court suit seeking an injunction against Manta’s operation. The trial court issued a temporary restraining order against Manta.
A year later, the trial court dissolved the preliminary injunction after finding the city’s ordinance infringed Manta’s First Amendment rights. The Court of Appeal eventually affirmed that ruling and the supreme court declined to review its opinion. During that time, however, Manta was subject to a stay preventing it from operating as an adult business. In all, the state court injunctions and stays kept Manta out of the adult entertainment business for 53 months. Meanwhile, Manta had filed a cross-complaint in state court claiming the city was liable under the federal Civil Rights Act, 42 U.S.C. § 1983, for its lost profits. Following a non-jury trial in which the judge found the city’s actions in attempting to enforce an unconstitutional zoning ordinance violated Manta’s rights, a jury awarded Manta $1.4 million in damages.
The Court of Appeal affirmed the judgment. The Supreme Court stated the general rule that governing bodies can be sued directly under the Civil Rights Act for monetary relief where the claimed unconstitutional act implements a policy statement, ordinance, regulation or decision officially adopted and promulgated by the governing body’s officers, citing Monell v. New York City Department of Social Services, 436 U.S. 658. It noted a number of courts have found cities liable for damages based on official action to enforce an ordinance later found unconstitutional. However, it pointed out, none of the cases cited involved a situation where a court approved the city’s enforcement of its ordinance before the ordinance was found unconstitutional.
The court referred to decisions from the 2nd, 3rd, 5th and 11th U.S. Circuit Courts of Appeal ruling that a trial court’s exercise of independent judgment to uphold allegedly unconstitutional action by a local government agent “broke the chain of causation,” preventing the government agent from being held liable for his or her unconstitutional act. Those decisions caution, however, that the chain of causation is not severed where the court’s decision was based at least in part on a misrepresentation by the local government or its agent.
The court found the reasoning of these decisions persuasive, and declared that where a court is provided with appropriate facts to decide a motion for a preliminary injunction or a stay pending appeal, the court’s intervening exercise of independent judgment interrupts the chain of causation for purposes of § 1983 liability. But the general rule of superseding cause does not apply if the judicial officer reached an erroneous decision because of pressure or being materially misled. The court went on to say it could not decide on the basis of the record before it whether the principle of intervening causation or the exception for pressure or misrepresentation applied in this case. The parties agreed that the declarations the city submitted in support of its request for preliminary injunction contained misinformation regarding the availability of alternate sites for adult entertainment venues within the city, and the city also misrepresented to the appellate court that Manta would suffer no irreparable harm because it had a damages remedy.
The parties disagreed on whether some of the misstatements were in fact misleading and whether any misrepresentations were material. Therefore, the court said, it would send the case back to the trial court to resolve any relevant factual issues and apply the principles of superseding intervening cause.
Manta Management Corp. v. City of San Bernardino, 181 P.3d 159, 75 Cal.Rptr.3d 353 (Ca. Sup. Ct. 4/24/2008).
The opinion can be accessed at: http://www.courtinfo.ca.gov/opinions/documents/S144492.PDF
Special thanks to James D. Lawlor, editor of the Land Use Legal Report for permission to reprint this summary from the Land Use Legal Report (LULR) Vol. 2 no. 10 (April 30, 2008). For information about subscriptions to the LULR and other LULR services, email Lawlor at landlaw@verizon.net.
