Cisneros v. City of Klamath Falls Oregon

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

MEDFORD DIVISION

ELIZABETH CISNEROS;

ANTONIO CISNEROS;

CARLOS FAIERS, Civ. No. 1:19-cv-00296-CL

Plaintiffs, OPINION & ORDER

v.

CITY OF KLAMATH FALLS, et al,

Defendants.

_______________________________________

AIKEN, District Judge:

Plaintiffs Elizabeth Cisneros, Antonio Cisneros, and Carlos Faiers bring this

cause of action against the City of Klamath Falls and several municipal officials,

including Klamath Falls Police Chief David Henslee, City Manager Nathan

Cherpeski, and City Councilor Kendell Bell. The case comes before the Court on a

Motion for Summary Judgment, ECF No. 37, submitted by all Defendants.

Defendants also move to strike some of Plaintiffs' evidence.

Magistrate Judge Mark Clarke issued a Findings and Recommendation

(“F&R”) on the motions. ECF No. 62. Defendants filed their Objections to the F&R,

ECF No. 73, and Plaintiffs have filed their Response to the Objections, ECF No. 79.

For the reasons set forth below, the Court ADOPTS the F&R as modified.

Defendant's motion to strike is DENIED, and Motion for Summary Judgment, ECF

No. 37, is GRANTED in part and DENIED in part. Plaintiffs concede that named

Defendants Eric Nobel and William Adams should be DISMISSED from the case and

the Court accepts those concessions. In summary, Plaintiffs have failed to carry their

burden to show a dispute of material fact regarding their claims under the Fourteenth

Amendment for procedural due process and substantive due process violations.

Defendants’ Motion for Summary Judgment is granted on those claims.

Plaintiffs have raised a sufficient dispute of material fact regarding their claim

for discrimination under the Equal Protection Clause against the City of Klamath

Falls and the individual Defendants, as well as their claim for intentional infliction

of emotional distress under Oregon state law. Issue preclusion does not apply, and

Defendants are not entitled to qualified immunity.

LEGAL STANDARDS

I. Review of Magistrate Recommendations

Under the Federal Magistrates Act, the Court may “accept, reject, or modify,

in whole or in part, the findings or recommendations made by the magistrate judge.”

28 U.S.C. § 636(b)(1). If a party files objections to a magistrate judge’s findings and

recommendations, “the court shall make a de novo determination of those portions of

the report or specified proposed findings or recommendations to which objection is

made.” Id.; Fed. R. Civ. P. 72(b)(3).

For those portions of a magistrate judge’s findings and recommendations to

which neither party has objected, the Act does not prescribe any standard of review.

See Thomas v. Arn, 474 U.S. 140, 152 (1985) (“There is no indication that Congress,

in enacting [the Act], intended to require a district judge to review a magistrate’s

report to which no objections are filed.”). Although no review is required in the

absence of objections, the Magistrates Act “does not preclude further review by the

district judge[] sua sponte . . . under a de novo or any other standard.” Id. at 154. The

Advisory Committee Notes to Fed. R. Civ. P. 72(b) recommend that “[w]hen no timely

objection is filed,” the court should review the recommendation for “clear error on the

face of the record.”

II. Summary Judgment

Summary judgment shall be granted when the record shows that there is no

genuine dispute as to any material of fact and that the moving party is entitled to

judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 247 (1986). The moving party has the initial burden of showing that

no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986); Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). The court

cannot weigh the evidence or determine the truth, but may only determine whether

there is a genuine issue of fact. Playboy Enters., Inc. v. Welles, 279 F.3d 796, 800 (9th

Cir. 2002). An issue of fact is genuine "if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

When a properly supported motion for summary judgment is made, the burden

shifts to the opposing party to set forth specific facts showing that there is a genuine

issue for trial. Id. at 250. Conclusory allegations, unsupported by factual material,

are insufficient to defeat a motion for summary judgment. Taylor· v. List, 880 F.2d

1040, 1045 (9th Cir. 1989). Instead, the opposing party must, by affidavit or as

otherwise provided by Rule 56, designate specific facts which show there is a genuine

issue for trial. Devereaux, 263 F.3d at 1076. In assessing whether a party has met

its burden, the court views the evidence in the light most favorable to the nonmoving

party. Allen v. City of Los Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995).

BACKGROUND

Plaintiffs are Hispanic family members who are the former and current owners

of a Mexican restaurant and lounge called El Palacio in Klamath Falls, Oregon. The

Cisneros’s operated El Palacio in downtown Klamath Falls in a prominent, landmark

building between 2004 and 2017. Their son, Carlos Faiers, is the current owner of

the business. Plaintiffs claim that the City of Klamath Falls (“the City”), the Klamath

Falls Police Department ("KFPD") at the direction of Chief Henslee, and two city

officials, Councilor Bell and City Manager Cherpeski, discriminated against them

and targeted them for a higher level of law enforcement activity due to their race.

By contrast, Defendants assert that KFPD, the City, and Chief Henslee were

attempting to address the serious and pervasive criminal activity that plagued

downtown Klamath Falls for many years. They argue that law enforcement incidents

that occurred at or near El Palacio were a result of Plaintiffs failing to abate the over-

consumption of alcohol on the premises and failing to cooperate with law enforcement

activity meant to keep the community safe.

Finally, Defendants assert that the City officials were doing their jobs to

investigate and hold Plaintiffs accountable for the criminal activity taking place at

their establishment.

The parties have submitted hundreds of pages of exhibits, declarations, and

affidavits to support their arguments in this litigation. This evidence establishes

certain facts that are not in dispute—namely that the downtown Klamath Falls area

was subject to a high level of alcohol related criminal activity, and the Klamath Falls

Police Department sought to address and abate such activity in a number of ways,

including increased law enforcement presence and patrolling in that area. It is

undisputed that officers reported numerous incidents involving El Palacio patrons

and patrons of other downtown establishments, and it is undisputed that many of

those incidents were attributed to El Palacio. What is disputed, however, is whether

that attribution was accurate, and whether Defendants' focus on El Palacio was due

to Plaintiffs' race.

Plaintiffs claim that on July 31, 2015, a KFPD officer entered El Palacio and

told Elizabeth Cisneros to shut the bar down. Id. at ¶ 7. Ms. Cisneros stated that

the officer did not have any legal authority to shut the bar down and she refused to

do so. Id. The officer identified himself as the new Chief of KFPD, David Henslee.

Id. Chief Henslee was new to Klamath Falls, having moved there a couple of months

earlier for the position. On August 13, 2015, Chief Henslee sent a letter to Plaintiff

Elizabeth Cisneros advising that El Palacio "has been the location of a pattern of

activity that has the potential to cause the subject property to be declared a 'Public

Nuisance' as defined by City Code." Henslee Decl. at 14. Chief Henslee further

advised that if this pattern of behavior continued, the City could make a Public

Nuisance declaration. Id. Chief Henslee's letter provided the dates, times, violations

and number of arrests for eight incidents that occurred between February 21, 2015,

and July 5, 2015. Id. Plaintiffs claim that, over the next year, the Cisneros family

worked with Chief Henslee to address what Chief Henslee considered to be issues at

El Palacio. Id. at 9.

El Palacio is one of many bars in a few-block-radius in downtown Klamath

Falls. Id. at 8. Directly across the street from El Palacio is a bar called The Pikey,

while the Basin Martini Bar and 618 are on the same block, and Black Dog Billiards

and the VFW are within a couple of blocks. Id. The downtown Klamath Falls area

has a reputation for being a rowdy place with patrons often circulating between the

establishments on weekend nights. Id. at ¶ 8; Oldham Dep. 27:12-28:11, 86:3-12

(attached to Decl. Selvig as Ex. 1). Plaintiffs submit evidence that all the

establishments in this area have issues with these patrons. Decl. E. Cisneros ¶10,

11; Decl. Faiers ¶ 7; Oldham Dep. 31.:13-32:18. Plaintiffs claim that they were

cooperative and attended meetings with Chief Henslee, changed their security

company, hired more security, and closed earlier on weekends in an effort to solve the

issues. Decl. E. Cisneros ¶ 9.

For reasons unknown to Plaintiffs, the first Notice of Public Nuisance issued

by Chief Henslee in August 2015 was dropped without further action. However,

despite this, and despite their efforts at cooperation, Plaintiffs claim that soon after

the first nuisance letter, officers began walking through El Palacio several times a

night, accusing the Cisneros family of refusing to cooperate with them, and

attributing incidents that happened outside of El Palacio to the bar. Decl. Cisneros

¶ 10; Decl. Faiers ¶ 7. As mentioned, El Palacio is in a landmark building downtown

and often used as a geographical reference point. However, Plaintiffs assert that

police reports began identifying incidents that happened in the street between El

Palacio and other bars solely to El Palacio. Decl. E. Cisneros ¶ 10; Decl. Faiers ¶ 7.

Chief Henslee issued a second public nuisance letter to El Palacio on May 18,

2016. Decl. Selvig Ex. 29. He based the notice on his tracking of seventy police

reports that he claimed were associated with El Palacio between January 2015 and

May 2016. Plaintiffs claim that the incidents in many of these reports were not

actually associated with El Palacio, but instead that they happened outside the

premises, in the general downtown area, between patrons of the various bars.

Defendants point to the “location” identified in the police reports, which

attributes the incidents to El Palacio. Defendants claim that officers have no control

over this identified location because it is determined at the time a member of the

public calls to report an incident to law enforcement.

However, Plaintiffs submit evidence indicating that all seventy of these police

reports were radioed into dispatch by KFPD officers, rather than by members of the

public. Plaintiffs claim that Executive Director of Klamath 911 Emergency

Communications District Keith Endacott pointed this out in his deposition,

describing that the origin of the call can be determined on each Computer Assisted

Dispatch (“CAD”) report. When the “Created” and “Dispatched” times are the same,

it is an officer-initiated call. Keith Endacott Dep. 18:09-19:20 (attached to Decl.

Selvig as Ex. 2); Decl. Selvig Ex. 27. Plaintiffs assert that this evidence supports

their claim that officers were misattributing incidents that happened in the

downtown area only to El Palacio, even when other establishments and patrons were

involved.

After the second public nuisance letter was issued in May 2016, Chief Henslee

met with Antonio Cisneros and Carlos Faiers. Decl. Carlos Faiers ¶ 8. Plaintiffs

claim that Chief Henslee told them during that meeting that he was going to try to

get their liquor license revoked. Id. He also said, “It's not your bar that's the problem,

it's the people and your culture” and that El Palacio needs to be “pulled up like a

weed.” Id. Chief Henslee disputes the context of these comments and the significance

of this conversation.

Plaintiffs claim that around this same time Chief Henslee began pressuring

the Oregon Liquor Control Commission (“OLCC”) to start an investigation into El

Palacio for a history of serious and persistent problems (“HSPP”) in violation of ORS

471.315(1)(c). Decl. Selvig Ex. 5-6. OLCC investigator Kent Oldham was the person

in charge of gathering information to assist the OLCC in determining whether to

start an HSPP investigation. Oldham Dep. 23: 17-24:07. Oldham is a dual-

investigator of both licensing and enforcement and has worked in that capacity in

Klamath County for over twenty years. Id. at 13:09-13, 12:15-21. Oldham also served

as a reserve officer for the KFPD for 13 years. Id. at 12:21-13:03; 96:18-20. Plaintiffs

claim that KFPD collected the seventy police reports referenced in Chief Henslee's

second public nuisance letter and supplied those reports, on its own initiative, to

Oldham, beginning in late 2015. Id. at 22:05-21.

Oldham testified that KFPD did not supply police reports for any other

establishments on its own initiative to Oldham during this time. Id. at 22:14-16.

Oldham also testified that he did not know of problems associated with El Palacio at

that time. Id. at 27:01-05. Oldham testified that the VFW and Black Dog Billiards

were establishments with issues comparable to El Palacio. Id. at 27:12-28:11. He

also described that the establishments in the downtown area in general had issues

with problematic patrons for about eight years before the El Palacio investigation.

Id. at 86:03-12. Despite that history, El Palacio has been the only HSPP investigation

Oldham has conducted in his twenty-one years with the OLCC. Id. at 33:25-35:11.

Since Oldham is the only OLCC investigator in Klamath County, this means that El

Palacio is the only establishment in the county to undergo an HSPP investigation in

the last two decades. Id. at 13:14-16.

Oldham prepared an Intake/Compliance Action Report on June 23, 2016,

recommending that an HSPP investigation occur based on the police reports provided

by KFPD. Id. at 82:02-14; Decl. Selvig Ex. 14. After the June 23, 2016 report, Oldham

began investigating all subsequent incoming police reports. Oldham Dep. 32:23-

33:21. In his investigation of twelve reported incidents between June 2016 and

February 2017, Oldham found a single instance of an OLCC violation attributable to

El Palacio. Id. at 60:17-61:23, 64:08-15, 76:01-06; Decl. Selvig Ex. 21. This single

instance involved serving alcohol to a minor during an OLCC sting operation. Id.

Fifteen establishments were targeted by the sting operation: El Palacio was one of

nine that served alcohol to the minor. Oldham Dep. 60:24-61:02.

The other eleven reports investigated by Oldham either were not OLCC

violations or could not be attributed to El Palacio. Id. at 37:10-38:20, 39:20-40:16,

510:4-52:21, 53:01-55:08, 55:16-57:05, 57:08-59:21, 66:01-16, 68:03-69:16, 69:23-

71:07, 71:11-72:07, 72:17-73:14; Decl. Selvig Ex. 15-20, 22-26. Regarding the patrons

involved in the various reports, Oldham testified that “there needs to be more

concrete evidence that the patron frequented the premises, rather than, you know,

being in the CAD notes.” Oldham Dep. 53:12-17, 56:21-25, 96:21-23.

While Oldham's investigation was ongoing, Chief Henslee submitted a letter

to the OLCC dated August 22, 2016. Decl. Selvig Ex.7. This letter was an

“Unfavorable Recommendation For Liquor License Renewal,” for El Palacio. Id. In

the letter, Chief Henslee highlighted all seventy police reports upon which he based

the May 18, 2016 public nuisance notice. Id. Oldham testified that this is the only

unfavorable recommendation regarding a liquor license renewal for a downtown

Klamath Falls establishment that OLCC has received from KFPD. Oldham Dep.

44:22-45:21, 46:16-25.

In April 2017, OLCC held an administrative hearing, ultimately revoking the

Cisneros' liquor license. Id. at 35:22-36:2, 76:17-23. Decl. Selvig Ex. 30. After the

Cisneros' s lost their liquor license, their son Carlos Faiers purchased the business

from his parents and applied for his own liquor license from the OLCC. Decl. Faiers

¶ 19. The Klamath Falls City Council held a public hearing and then submitted a

recommendation on approving or denying the application to the OLCC. Plaintiffs

claim that this type of action was unusual for the City Council. Decl. Selvig Ex. 8.

The public hearing on Carlos Faiers' application was set for November 6, 2017. Id.

On October 31, 2017, KFPD wrote a letter recommending the City Council

recommend that OLCC deny the application. Id. at 5. Before the hearing, Councilor

Kendall Bell emailed Chief Henslee and requested information about El Palacio. She

stated that this type of pre-hearing discussion was out of the ordinary for her. Bell

Dep. 35:13-36:07, 37:07-13 (attached to Decl. Selvig as Ex. 3); Decl. Selvig Ex. 10.

At the hearing, members of the public testified about concerns that El Palacio

was being targeted based on the Cisneros's race. Bell Dep. 28:15-29:19. The

councilors then voted. Id. at 31:13-14. The 3-2 decision was to recommend approval

of Carlos Faiers' liquor license with the restriction that alcohol sales would not be

allowed after 10:00 p.m.

Two days after the vote, Councilor Bell emailed Chief Henslee stating that she

let the Chief down and was “so very sorry,” and, in a subsequent email, asked what

else could be done concerning El Palacio. Id. at 41:05-42:17, 46:14-14; Decl. Selvig

Exs. 11, 12.

Three days after the vote, Klamath Falls City Manager Nathan Cherpeski

drafted a document entitled, “Thursday Update,” wherein he addressed the City

Council’s vote to “set the record straight” that police were not “unfairly targeting”

Plaintiffs based on race. Decl. Cherpeski Ex. 1. Cherpeski testified that, in general,

addressing issues from past Council votes in a routine update is not ordinary.

Cherpeski Dep. 26:9-22. Cherpeski knew that this document would be posted publicly

on the city's website. Id. at 29:08-12.

On November 21, 2017, Councilor Bell wrote a letter to Plaintiff Carlos Faiers,

reproduced in part below, discussing “the way things play[ed] out” at the City Council

hearing, explaining that she left unaddressed certain points:

“You had three testimonials that stood out to me. One made the

claim that the Police Department was being ‘racist’ in picking on

your business. Being ‘racist’ would have meant that another

establishment with the same long list of incidences was not being

penalized. There are at least 15 other restaurants in the

community that are run by Hispanics that are not being penalized

because they are following the rules. Again no racism can be

claimed.”

Decl. Montoya Ex. 20; Bell Dep. 48:10-50:08; Decl. Selvig Ex. 13. The letter was

copied to Chief Henslee, Oldham, and James Hunter at the OLCC Regional Office.

Decl. Selvig Ex. 13. Councilor Bell stated that she has never sent out any similar

letters after a Council vote. Bell Dep. 49:10-15.

DISCUSSION

Plaintiffs bring the following claims against Defendants: (1) Claims against

the City, acting on its own and through the KFPD, for violations of Plaintiffs'

Fourteenth Amendment civil rights, including their procedural due process rights,

substantive due process rights, and the right to equal protection under the law; (2)

claims for the same violations of Plaintiffs Fourteenth Amendment civil rights,

alleged against the individual Defendants;1 (3) intentional infliction of emotional

1 Defendants raise a pleading issue with this claim. It is true that the specific

allegations contained in this section of the Complaint are poorly pled, merely stating

that Defendants have violated 42 U.S.C. 1983, which is a vehicle for stating an

underlying constitutional claim. Compl. at 41. However, the section also

distress, alleged against the individual Defendants. The first two sets of claims are

necessarily brought under 42 U.S.C. § 1983 and the third is brought under Oregon

law.

Defendants move for summary judgment on all claims. Defendants also move

to strike evidence of audio recording of a conversation between Plaintiffs and Chief

Henslee.

I. Issue Preclusion

In their Motion for Summary Judgment, Defendants argue that the issues in

this case are precluded by the ruling of the OLCC when, after a hearing and a written

decision by an ALJ, the agency cancelled the Cisneros’s liquor license on August 1,

2017. The Court disagrees. Issue preclusion arises in a subsequent proceeding when

an issue of ultimate fact has been determined by a valid and final determination in a

prior proceeding. North Clackamas Sch. Dist. v. White, 305 Or. 48, 52, 750 P.2d 485

(1988). Issue preclusion arises if five requirements are met: (1) the issue in the two

proceedings is identical; (2) the issue was actually litigated and essential to a final

decision on the merits in the prior proceeding; (3) the party sought to be precluded

has a full and fair opportunity to be heard on that issue; (4) the party sought to be

precluded was a party or was in privity with a party to the prior proceeding; and (5)

the prior proceeding was the type to which the court will give preclusive effect. Nelson

incorporates by reference all the prior factual allegations and legal claims. Compl. at

40. Such factual allegations and legal claims are sufficient to state the same plausible

claims for relief that were made under Claim 1, but as alleged against the individual

Defendants instead of the City. To the extent Defendants attempt to have this claim

dismissed under FRCP 12(b)(6), such motion is DENIED.

v. Emerald People's Utility Dist., 318 Or. 99, 104 (1993) (internal citations omitted).

There is no issue preclusion in this case. The hearing and OLCC final order

determined whether sufficient evidence existed to cancel Plaintiffs’ liquor license, not

whether Defendants violated Plaintiffs’ rights under the Fourteenth Amendment, nor

whether Defendants inflicted intentional emotional distress on Plaintiffs by racially

targeting them or trying to put them out of business. Defendants argue that the

ultimate issues of fact determined by the ALJ, and then by the OLCC order, include

whether the police reports, detailed in Chief Henslee’s public nuisance letter and later

submitted to the OLCC for review, were properly attributed to El Palacio instead of

to the downtown Klamath Falls area in general. This dispute is an important part of

Plaintiffs’ case, but it was not “essential” to the OLCC’s final decision and order.

Determination of that fact is not precluded in this case.

II. Defendants' Motion to Strike

Defendants move to strike Plaintiffs’ assertion regarding statements made by

Chief Henslee, including, “It’s not your bar that's the problem, it’s the people and your

culture” and that El Palacio needs to be “pulled up like a weed.” Defendants claim

that they learned for the first time that Faiers recorded this conversation when

Plaintiffs filed their response brief and attached Faiers’ declaration. Because the

recording was not disclosed or produced in discovery, Defendants move to strike the

recording itself and all reference to the conversation from the record.

Federal Rule of Civil Procedure 37(c)(1) provides that if a party fails to “provide

information or identify a witness as required by Rule 26(a) or (e), the party is not

allowed to use that information or witness to supply evidence on a motion, at a

hearing, or at a trial, unless the failure was substantially justified or is harmless.”

At the oral argument hearing on July 30, 2020, Plaintiffs’ counsel informed the

Court that they believed the audio recording had been disclosed and that their failure

to disclose it was inadvertent. Additionally, the content of the recording and the

statements made by Chief Henslee were alleged in the Complaint, allowing for

questions in deposition and interrogatories, even though the audio recording was not

disclosed. Therefore, the Court finds that, while the failure to disclose the existence

of a recording and the audio or transcript itself was not harmless, that failure was

not overly prejudicial, and it was not done in bad faith. The alleged comments were

disclosed to Defendants, so at the very least, those comments should not be

suppressed or stricken. Moreover, Defendants did not dispute the alleged contents of

the recorded comments made by Chief Henslee in their Motion for Summary

Judgment, yet now claim that the recording provides a more accurate context for

Chief Henslee's comments to show that they were not racially motivated. For this

reason, the Court finds that the audio recording should not be stricken from the

record but should be made available to a jury so that the full context and meaning of

the conversation can be weighed along with all evidence in this case.

Ill. Equal Protection Clause of the Fourteenth Amendment

Plaintiffs submit sufficient evidence creating a question of fact as to whether

Chief Henslee, Councilor Bell, and City Manager Cherpeskin violated Plaintiffs’

rights under the Equal Protection Clause to be free from discrimination based on race

and from selective enforcement of the laws. Plaintiffs also raise a question of fact as

to whether that discrimination rose to the level of an informal policy or practice such

that the City may be held liable.

A. Equal Protection: Disparate Treatment

To sustain a claim under the Equal Protection Clause, a plaintiff must provide

(1) evidence of disparate treatment compared to others similarly situated, and (2)

that the acts forming the basis of the plaintiff’s claim were motivated by a

discriminatory purpose. See Pers. Adm'r of Mass. v. Feeney, 442 U.S. 256, 272-74

(1979); Village of Arlington Heights v. Metro. Housing Dev. Corp., 429 U.S. 252, 264-

66. An equal protection claim is established when plaintiffs show they were treated

differently than other similarly situated people. City of Cleburne v. Cleburne Living

Ctr., inc., 473 U.S. 432, 439 (1985). Often, such a showing is impracticable in the

context of a selective enforcement case against a law enforcement officer or entity.

See, e.g., Johnson v. Crooks, 326 F.3d 995 (8th Cir. 2003) (holding that despite the

“seemingly impossible burden,” proof that a similarly situated person was not stopped

is required where motorists challenge their own stop on equal protection grounds);

United States v. Duque-Nava, 315 F. Supp. 2d 1144, 1155 (D. Kan. 2004) (recognizing

that, because “law enforcement agencies do not make or keep records on individuals

they do not stop, and certainly not on ‘similarly situated’ individuals they do not

stop, imposing such a requirement ... effectively denies them any ability to discover

or prove such a claim.”).

Plaintiffs here have submitted evidence, discussed above, that they were

treated differently than other similarly situated, but white-owned establishments in

Klamath Falls. The evidence shows significant criminal activity in the general

downtown area of Klamath Falls, not just near El Palacio. Oldham, the OLCC

investigator, testified that the establishments in the downtown area had problems

with drunk patrons for eight years before the El Palacio investigation, noting law

enforcement incidents at the Black Dog and the VFW.

Defendants assert that Plaintiffs were not treated differently than these other

bars, but the evidence creates a question of fact as to that assertion: First, on August

17, 2016, Chief Henslee sent a Public Nuisance Notice letter to Karen Johnson,

President of the VFW, a bar located within a few blocks of El Palacio. As with the

letters to Plaintiffs, Chief Henslee advised in his letter to Johnson that the VFW “has

been the location: of a pattern of activity that has the potential to cause the subject

property to be declared a ‘Public Nuisance’ as defined by City Code.” Chief Henslee

further advised that if this pattern of behaviors continued, the City Council could

make a Public Nuisance declaration. Chief Henslee's letter provided the dates, times,

violations and number of arrests for five incidents that occurred between July 16,

2016, and August 7, 2016.

These facts show that VFW was “similarly situated” to El Palacio. However,

unlike the continuing law enforcement activity that persisted in Plaintiffs’ case,

Defendants claim that “VFW timely abated the nuisance activities at their

establishment and no further enforcement of the Nuisance Property Ordinance was

taken by KFPD.” Defendants provide no further explanation regarding how the

nuisance activity was abated, nor do they distinguish VFW's situation. If it is a

matter of cooperation with law enforcement, Plaintiffs claim that they did cooperate

with KFPD, adjusting El Palacio's hours, closing early, increasing security, and

changing security companies. Chief Henslee admitted in his second letter that

Plaintiffs made efforts to abate the nuisance. A jury could make a plausible inference

that VFW was not targeted for the same level of continuing law enforcement activity

as El Palacio despite a similar history of criminal activity and a similar effort to abate

that activity. Accordingly, individual Defendants have not met the burden to prevail

on summary judgment.

B. Equal Protection: Discriminatory Purpose

In addition to showing they were treated differently than similarly situated

individuals, Plaintiffs must show that the acts forming the basis of their claim were

motivated by a discriminatory purpose. See Pers. Adm'r of Mass. v. Feeney, 442 U.S.

256, 272-74 870 (1979); Arlington Heights, 429 U.S. at 264-66. A plaintiff does not

have to prove that the discriminatory purpose was the sole purpose of the challenged

action, but only that it was a “motivating factor.” Arce v. Douglas, 793 F.3d 968, 977

(9th Cir. 2015) citing Arlington Heights, 429 U.S. at 266.

The Supreme Court articulated the following, non-exhaustive factors that a

court should consider in assessing whether a defendant acted with discriminatory

purpose: (1) the impact of the official action and whether it bears more heavily on one

race than another; (2) the historical background of the decision; (3) the specific

sequence of events leading to the challenged action; (4) the defendant's departures

from normal procedures or substantive conclusions; and (5) the relevant legislative

or administrative history. Id. at 266-68; Pac. Shores Props., LLC v. City of Newport

Beach, 730 F.3d 1142, 1158-59 (9th Cir.2013). Moreover, when relying on Arlington

Heights to demonstrate that an action was motivated by a discriminatory purpose, a

plaintiff need provide “very little such evidence to raise a genuine issue of fact; any

indication of discriminatory motive may suffice to raise a question that can only be

resolved by a fact-finder.” Pac. Shores Props., 730 F.3d at 1159 (quoting Schnidrig v.

Columbia Mach., Inc., 80 F.3d 1406, 1409 (9th Cir.1996)) (internal alterations

omitted).

The evidence in this case creates a genuine issue of fact as to whether

Defendants’ actions were taken subject to a discriminatory motive. First, it is

undisputed that Plaintiffs are Hispanic and owners of the other similarly situated

bars such as the VFW and The Pikey are white. Second, the comments made by Chief

Henslee that, “It’s not your bar that’s the problem, it’s the people and your culture”

and that El Palacio needs to be “pulled up like a weed,” raise the specter of racial

discrimination. Viewed in the light most favorable to the non-moving party, a

reasonable jury could construe those comments as racially motivated. Third, at the

public hearing on Faiers’ OLCC license application on November 6, 2017, both parties

allege that many members of the public testified about concerns that El Palacio was

being targeted based on the Cisneros’s race, demonstrating that there were

contemporary concerns about the City’s actions. Plaintiffs have therefore raised a

question of fact as to whether individual Defendants’ disparate treatment was

racially motivated.

C. Municipal Liability

Municipalities can be sued for monetary, declaratory, or injunctive relief for

deprivations of constitutional or civil rights. Monell v. Department of Soc. Servs., 436

U.S. 658, 690 (1978). A municipality cannot be held liable for the actions of its

employees under the theory of respondeat superior. Seamons v. Snow, 206 F.3d 1021,

1029 (10th Cir.2000) (citing Monell, 436 U.S. at 691). Plaintiffs seeking to impose

liability on a municipality under section 1983 must identify a municipal “policy” or

“custom” causing their injury. Board of County Com'rs v. Brown, 520 U.S. 397,403

(1997) (citing Monell, 436 U.S. at 694). An unconstitutional deprivation is caused by

a municipal “policy” if it results from decisions of a duly constituted legislative body

or an official whose acts may fairly be said to be those of the municipality itself.

Brown, 520 U.S. at 403-04. Similarly, “custom” has come to mean an act that,

although not formally approved by an appropriate decision maker, has such

widespread practice as to have the force of law. Id. at 404.

Plaintiffs submitted evidence sufficient to raise a question of fact as to whether

the discriminatory actions allegedly taken against them rose to the level of a

municipal custom such that the City may be held liable. The evidence submitted, as

discussed above, raises an inference that the selective enforcement of the City's public

nuisance laws extended to KFPD as a whole, led by its Chief, and implemented by

the officers who increased patrols, conducted walk-throughs of the restaurant, and

attributed incidents and police reports to El Palacio as an establishment. KFPD sent

police reports on its own initiative to Oldham regarding incidents attributed to El

Palacio but did not send similar reports about other allegedly problematic

establishments. KFPD was responsible for sending public nuisance letters to

Plaintiffs, sending the recommendation to the OLCC to cancel the Cisneros's liquor

license, and sending the recommendation to deny Faiers’ liquor license. Two separate

City employees, Councilor Bell and Cherpeski, wrote letters and posted public

statements allegedly disparaging Plaintiffs. That evidence creates a question of fact

concerning whether a widespread practice pervasive enough to rise to the level of an

informal policy or custom existed.

The City submits an extensive amount of evidence to dispute these inferences,

but the Court's role is not to determine which set of facts is more plausible. A jury

should weigh the evidence and determine whether the City discriminated against

Plaintiffs in violation of the Equal Protection Clause by selectively enforcing its public

nuisance laws.

IV. Procedural and Substantive Due Process.

In addition to their equal protection claim, Plaintiffs allege that they suffered

violations of their Fourteenth Amendment rights to procedural and substantive due

process. “A Section 1983 claim based upon procedural due process . . . has three

elements: (1) a liberty or property interest protected by the Constitution; (2) a

deprivation of the interest by the government; (3) lack of process.” Westwood v. City

of Hermiston, 787 F. Supp 2d 1174, 1195 (D. Or. 2011), aff'd, 496 Fed Appx 728 (9th

Cir 2012) (citing Portman v. Cty. of Santa Clara, 995 F.2d 898, 904 (9th Cir.1993)).

“Due process requires notice ‘reasonably calculated, under all the circumstances, to

apprise interested parties of the pendency of the action and afford them an

opportunity to present their objections.’” Kashem v. Barr, 941 F.3d 358, 382 (9th Cir.

2019) (citing United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260,272 (2010)).

Defendants have met their burden to show that they should prevail as a matter of

law on Plaintiffs’ due process claims.

Plaintiffs received adequate notice in the form of the Notice of Proposed

License Cancellation and Proposed Refusal to Renew License. Plaintiffs disputed the

allegations in the notice, and requested a hearing, which was granted. Plaintiffs were

represented by counsel and presented testimony and other evidence contesting the

allegations. Plaintiffs do not argue that the process followed was inadequate. The

Court concludes that Defendants are entitled to summary judgment on Plaintiffs’

procedural due process claim. Further, Plaintiffs not pointed to any specific facts in

their case that fall under the protections of substantive due process. Defendants are

therefore entitled to summary judgment on Plaintiffs’ claims for procedural and

substantive due process violations.

V. Intentional Infliction of Emotional Distress.

“To state a claim for intentional infliction of severe emotional distress, a

plaintiff must plead that (1) the defendant intended to inflict severe emotional

distress on the plaintiff, (2) the defendant's acts were the cause of the plaintiff’s

severe emotional distress, and (3) the defendant's acts constituted an extraordinary

transgression of the bounds of socially tolerable conduct.” McGanty v. Staudenraus,

321 Or. 532, 543, 901 P.2d 841,849 (1995) (internal citation omitted).

Because proof of intent is often indirect and evidence of psychic harm is usually

self-serving, proof of this tort “largely turns on the [third] element, whether a

defendant's conduct is sufficiently outrageous.” House v. Hicks, 218 Or. App. 348, 358

(2008). The determination of whether conduct is socially intolerable is, for the most

part, a fact-specific inquiry. Lathrope Olson v. Oregon Dep't of Transp., 128 Or. App.

405, 408, 876 P.2d 345, 346 (1994).

Accordingly, the court reviews the alleged conduct on a case-by-case basis,

considering the totality of the circumstances involved, to determine whether it

constitutes an “extraordinary transgression of the bounds of socially tolerable

conduct.” Franklin v. PCC, 100 Or. App. 465, 471, 787 P.2d 489 (1990). Whether acts

constitute an “extraordinary transgression of the bounds of socially tolerable conduct”

involves “a judgment of social standards rather than of specific occurrences.” Hall v.

May Dep't. Stores Co., 292 Or. 131, 136-137 (1981). And, it is the defendant's specific

acts, rather than their motives, that must be outrageous. Madani v. Kendall Ford,

Inc., 312 Or. 198, 204 (1991), abrogated on other grounds by McGanty, 321 Or. 532.

Viewed in the light most favorable to the nonmoving party, the evidence in the

record raises a question of fact as to the individual Defendants' conduct.

VI. Qualified Immunity on Federal Claims

Defendants assert that Chief Henslee, Councilor Bell, and City Manager

Cherpeski are entitled to qualified immunity from any federal claim. Qualified

immunity protects governmental officials from suits seeking damages provided that

their conduct “does not violate clearly established statutory or constitutional rights

of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S.

800, 818 (1982). Government officials are entitled to qualified immunity if the

conduct did not violate clearly established law. Pearson v. Callahan, 555 U.S. 223,

243 (2009). The Supreme Court has repeatedly held that the right at issue is not

defined at a high level of generality. Ashcroft v. al-Kidd, 563 U.S. 731, 742 (2011).

For a constitutional right to be clearly established, its contours must be sufficiently

clear that a reasonable official would understand that what he is doing violates that

right. “This is not to say that an official action is protected by qualified immunity

unless the very action in question has previously been held unlawful, but it is to say

that in the light of preexisting law the unlawfulness must be apparent.” Hope v.

Pelzer, 536 U.S. 730, 739 (2002).

Defendants argue that “here, no similar case law exists that would put these

Defendants on notice that they would be violating plaintiffs' constitutional rights by

Chief Henslee's mere enforcement of City Ordinances and Councilor Bell and City

Manager Cherpeski's written defense of KFPD.” Def. Reply 40. Plaintiffs have

alleged that Defendants utilized the power, authority, and resources of KFPD and

the City to selectively enforce the City's public nuisance laws for racially

discriminatory reasons. Prior cases provide notice of the unconstitutionality of such

conduct.

For example, in RK Ventures, Inc. v. City of Seattle, nightclub owners argued

that the city of Seattle targeted them based on the hip-hop music their club played

and their African-American patrons. RK Ventures, Inc. v. City of Seattle, 307 F.3d

1045, 1050 (9th Cir. 2002). Such “targeting” included selective enforcement of an

ordinance allowing the City to institute abatement proceedings against businesses it

determined were public nuisances. Id. at 1051. The justification for this ordinance

was to address “the public problems of increased violence, noise, public drunkenness,

drug-trafficking, and other illegal activity.” Id. The night club owners discovered

handwritten notes by a city councilor contemporaneous with the passing of the

ordinance noting that clubs playing hip-hop attract a criminal crowd and that “Black

gangs hanging out are the problem.” Id. The plaintiffs alleged a course of conduct

following adoption of the public nuisance abatement Ordinance by which the City and

the Seattle police intimidated patrons, failed to respond to calls and render assistance

on request, denied requests to hire off-duty police officers to provide security,

threatened to shut down the club, encouraged local residents to complain, provided

false and inflammatory information to the public, targeted plaintiffs for harassment

ticketing, sought to have the club's liquor license revoked, demanded early closing

hours, initiated an abatement proceeding and, ultimately, forced the sale of the club.

Id. at 1062. The Ninth Circuit determined that this evidence was sufficient to raise

a genuine issue of material fact of dissimilar treatment of the nightclub owners with

those catering to a white audience. Id. at 1063.

The facts alleged in this case are not precisely the same, but they follow a

sufficiently similar pattern as to put Defendants on notice that such conduct would

unreasonably violate Plaintiffs' constitutional rights. Plaintiffs’ allegations include

that Chief Henslee directed patrols of El Palacio, including nightly walk-throughs of

the premises, and Plaintiffs assert that under his direction, KDPD engaged in an

informal policy of misattributing criminal incidents in the general area to Plaintiffs'

specific establishment. Plaintiffs assert that Chief Henslee, Councilor Bell and City

Manager Cherpeski in practice treated Plaintiffs’ business differently by than

similarly situated non-Hispanic establishments in the area and that they acted with

intent to shut down El Palacio. Based on RK Ventures, Defendants were on notice

that such conduct, if true, was unconstitutional. Defendants are not entitled to

qualified immunity.

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CONCLUSION

For the reasons above, the Court ADOPTS the F&R as modified. Defendants’

motion to strike is DENIED, and the motion for summary judgment, ECF No. 37, is

GRANTED in part and DENIED in part. Plaintiffs’ claims against Defendants Eric

Nobel and William Adams are DISMISSED. Defendants’ Motion for Summary

Judgment as to Plaintiffs' procedural and substantive due process claims are granted.

Plaintiffs have raised a sufficient dispute of material fact regarding their claim for

discrimination under the Equal Protection Clause, as against the City of Klamath

Falls and the individual Defendants, as well as their claim for intentional infliction

of emotional distress. Issue preclusion does not apply, Defendants are not entitled to

qualified immunity. The court further ORDERS a status conference to be held to

determine next steps in the course of litigation.

It is so ORDERED and DATED this __2_6_t_h_ day of May 2022.

_/_s_/A__n_n_ _A_i_k_e_n___________________

ANN AIKEN

United States District Judge