Posted by: Patricia Salkin | October 21, 2017

6th Circuit Court of Appeals Holds Adult Entertainment Business Owners and Purchaser Failed to State §1983 Equal Protection Race Discrimination Claim

Arab-American owners and a prospective purchaser of an adult-entertainment business brought an action against the City of Warren, alleging that they were denied equal protection of the law and substantive due process on the basis of their race, that the City violated their right to free speech and association, and that the City denied them substantive and procedural due process through its enforcement of a liquor-control statute. The United States District Court for the Eastern District of Michigan dismissed action on res judicata grounds. The Court of Appeals reversed and remanded, and on remand, the District Court entered summary judgment in City’s favor.

On appeal plaintiffs’ first argued that the district court erred in granting summary judgment because Defendant failed to submit a brief in support. Here, when Defendant moved for summary judgment, it submitted a brief that exceeded the standard 25-page limit set out in Eastern District of Michigan Local Rule 7.1(d)(3)(A). The district court granted Defendant’s motion for leave to file excess pages in a text-only order, but Defendant ultimately noted in a footnote in its reply brief that it confirmed with district court staff that it did not need to re-file the brief as a stand-alone docket entry. Additionally, the court noted that Plaintiffs responded to the brief they claimed was never filed. As such, the district court did not abuse its discretion in not requiring Defendant to file a stand-alone brief.

Plaintiffs next contended that the only evidence the court could consider when reviewing whether there was racial animus in Defendant’s decision to deny Plaintiff’s transfer application at issue was the City Council’s minutes. Plaintiffs failed to cite to any precedent that supported their proposition, however. Nevertheless, the court noted that the evidence contained in the April 2010 City Council minutes provided legitimate and non-discriminatory reasons for the denial of the transfer application. Specifically, the adult entertainment business was located next to homes and did not conform to the zoning ordinance, and the prospective purchaser’s $800,000 investment would involve “a major structural change,” and therefore not comply with the zoning ordinance. Accordingly, the court held that the district court did not err in considering all of the relevant evidence presented when it dismissed Plaintiffs’ § 1983 claims.

Next, Plaintiffs’ race discrimination claim brought pursuant to the Equal Protection Clause of the Fourteenth Amendment, was premised upon Plaintiff Sesi’s and Hakim’s deposition testimony that they “felt” the City Council denied the transfer based on their race. The court rejected this testimony as nothing more than “rank speculation”. Plaintiffs also argued that no other transfer applications were denied in 2009 and 2010, and that the only difference between the applicants whose applications were granted and Plaintiff Hakim was that Hakim is Arab American. In support, however, Plaintiffs referenced one instance where a liquor license transfer application was approved by the City Council, but failed to provide the race of that applicant.

Lastly, the court found Plaintiffs could not claim a due process violation as a matter of law without a protected property or liberty interest at stake. Furthermore, even if there were a recognized property interest at stake, the basis for Plaintiffs’ substantive due process argument were two City ordinances that were enacted after the decision to deny the transfer application was made. Accordingly, the court held that the district court did not err in granting summary judgment in favor of Defendant.

Jon Jon’s, Inc. v. City of Warren, 700 Fed.Appx. 436 (2017)

This post was written by Matthew Loeser, Esq.

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