Posted by: Patricia Salkin | April 23, 2017

Fifth Circuit Court of Appeals Dismisses Hookah Lounge’s Takings Claims Against City as Unripe

A City of Allen building inspector, Bret McCullough, shut down Mike Jabary’s hookah lounge by leaving a notice on the door of the establishment that summarily revoked Jabary’s certificate of occupancy and informed him that he was violating the city code by doing business without the certificate. Jabary brought a procedural due process claim against the City building inspector and a takings claim against the City of Allen.  The district court dismissed Jabary’s procedural due process claim; however, on appeal, the court determined that the building inspector was not entitled to qualified immunity on the pleadings and reversed. On remand, the building inspector twice moved for summary judgment on Jabary’s procedural due process claim, again based on qualified immunity. The district court denied both motions, finding that there was a genuine issue of material fact as to whether the building inspector acted arbitrarily or had a reasonable basis for determining that there was an emergency requiring summary action. The building inspector appealed both denials of summary judgment on Jabary’s procedural due process claim.
On appeal, the building inspector argued that there was no genuine dispute of fact because the district court determined that unsanitary conditions could allow a jury to determine that there was a reasonable basis for thinking there was a public health emergency, although it also determined that a jury could find otherwise. The building inspector claimed that the unsanitary conditions and concerns over the sale of K2 precluded any argument that he acted arbitrarily or abused his discretion. However, since these arguments attacked the genuineness of the issue of fact identified by the district court rather than its materiality, the court lacked jurisdiction to consider them on interlocutory review and remanded the case for further consideration of Jabary’s procedural due process claims against the building inspector.
Finally, the court found Jabary’s takings claim was not ripe. Here, Jabary’s state court takings lawsuit was dismissed for failure to comply with a reasonable state-law exhaustion requirement because he did not file an administrative appeal within fifteen days of the time his certificate of occupancy was revoked. As such, the court held that while dismissal was appropriate, the dismissal should have been without prejudice due to the fact that the district court lacked subject matter jurisdiction to hear the issue on the merits.
JaBary v City of Allen, 2017 WL 1405744 (5th Cir. CA 4/19/2017)

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