Brown v. City of Royal Oak

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 06a0774n.06

Filed: October 18, 2006

Case No. 05-1238, 05-1483

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

JOHN MARK BROWN, )

)

Plaintiff-Appellant, )

) ON APPEAL FROM THE

v. ) UNITED STATES DISTRICT

) COURT FOR THE EASTERN

CITY OF ROYAL OAK, MICHIGAN, et al., ) DISTRICT OF MICHIGAN

)

Defendants-Appellees. )

)

_______________________________________ )

)

)

BEFORE: BATCHELDER, SUTTON, Circuit Judges; and FORESTER, District Judge.*

ALICE M. BATCHELDER, Circuit Judge. Plaintiff-Appellant, John Mark Brown

(“Brown”), his mother, and his brother were the successor trustees of the Barclay Trust, which held

the stock and liquor license of the Redcoat Tavern (“the Redcoat”), located in Royal Oak, Michigan.

In 2002, the Trust submitted to the requisite authorities an application to transfer the stock and liquor

license to Brown and his brother. Several months later, the Trust withdrew the application and

Brown filed this action against the City of Royal Oak, the Royal Oak Police Lieutenant Donald

Foster, Assistant City Attorney James Marcinkowski, City Manager Lawrence Doyle, Police Chief

*

The Honorable Karl S. Forester, United States District Judge for Eastern District of Kentucky, sitting by

designation.

Ted Quisenberry, and City Attorney Charles Semchena, (“Defendants”).1 The twelve-count

complaint seeks declaratory and injunctive relief as well as compensatory and punitive damages, and

includes claims under 42 U.S.C. § 1983 that the Defendants’ actions with regard to the application

for transfer of the stock and liquor license denied Brown due process, equal protection and the

fundamental right to choose a career and receive stock, and that the Defendants had failed to prevent

these violations of Brown’s rights. The complaint also includes claims of conspiracy under 42

U.S.C. § 1985(3); negligent failure to prevent constitutional violations, actionable under 42 U.S.C.

§ 1986; malicious abuse of process; denial of due process, equal protection and First Amendment

rights; claims under RICO, 18 U.S.C. § 1962; and state law claims for libel and slander and

intentional infliction of emotional distress.

The district court denied Brown’s motion for partial summary judgment and granted

Defendants’ motion for summary judgment on the RICO claim, dismissing it with prejudice. The

court dismissed the remaining federal claims without prejudice as unripe; and, having dismissed all

of the federal claims, dismissed the state law claims without prejudice. Brown appeals that order.

The court denied Defendants’ claims for attorneys’ fees and Defendants appeal. As we explain

below, we AFFIRM the dismissal of Brown’s due process and equal protection claims without

prejudice. We AFFIRM the dismissal of Brown’s remaining federal claims, but remand with

instructions that they be dismissed with prejudice. Finally, we AFFIRM the dismissal of the state

law claims without prejudice and the denial of Defendants’ motion for attorney fees and costs.

1

The City of Royal Oak has asserted governmental immunity consistent with the Michigan Supreme Court’s

ruling in Ross v. Consumers Power Co., 420 Mich. 567 (1984), and all other defendants have asserted qualified

immunity. At the time of the complaint, Defendants were all government officials acting in their official capacities and

assert immunity from personal civil liability in that their actions did not violate clearly established statutory or

constitutional rights. See Harlow v. Fitzgerald, 457 U.S. 800, 817-18 (1982). The district court, finding that it lacked

jurisdiction over Plaintiff’s claims, did not reach the governmental and qualified immunity defenses.

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I. BACKGROUND

Michigan law requires the Michigan Liquor Control Commission (“MLCC”) to approve any

transfer of a liquor license or of more than 10% stock ownership in an establishment holding a liquor

license. M.C.L. § 436.1529(1). The MLCC considers several factors in approving transfer

applications, including the approval of the local legislative body in which the applicant’s place of

business is located, the opinions of local law enforcement, the applicant’s past convictions for a

felony or a crime involving violence, and any sentences imposed for specific offenses. See M.C.L.

§ 436.1501. Furthermore, the ordinances of the City of Royal Oak provide that “the transfer of

ownership of existing [liquor] licenses . . . will be approved at the sole discretion of the City

Commission,” and that “transfer of ownership of existing licensed establishments shall be reviewed

by the LLC Committee and approved or disapproved by the City Commission.” Royal Oak

Ordinance 2001-06 §§ 2 and 6.

On October 18, 2002, the Barclay Trust submitted the Redcoat stock and liquor license

transfer application to Royal Oak’s Lieutenant Foster. Lt. Foster then performed criminal

background checks of Brown, his brother, and his mother, as part of the criminal investigation report

required by the MLCC. The background checks revealed that Brown had been placed on probation

by the state court in Florida after he was involved in a hit and run accident in 1992; that he had

violated that probation by traveling to Michigan in 1995 without first procuring the consent of his

probation officer; and that there was an outstanding Florida warrant for his arrest for the probation

violation. Lt. Foster’s report also indicated that Kaye Barclay met the police department’s

requirements, but concluded that Brown and his brother did not. On December 27, 2002, Royal Oak

Police arrested Plaintiff on the Florida arrest warrant. On December 30, 2002, Lt. Foster emailed

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the criminal investigation report to City Manager Doyle, and sent the report to the MLCC, Assistant

City Attorney Marcinkowski, and Police Chief Quisenberry.

A scheduled January 2003 Subcommittee meeting regarding the Redcoat transfer application

was adjourned to give Brown the opportunity to obtain cancellation of the Florida warrant. After

a second adjournment in February 2003, the Barclay Trust asked to adjourn the next meeting, now

rescheduled for March 6, 2003. The Subcommittee denied that request and advised the trustees to

attend the meeting. The trustees did not appear at that meeting. Rather, on March 5, 2003, the

Barclay Trust withdrew its liquor license and stock transfer application from the MLCC, and on

March 7, 2003, from the City of Royal Oak. On March 14, Brown and his brother resigned as

successor trustees of the Barclay Trust. Kaye Barclay subsequently filed an amended application for

transfer of the stock and license, naming only herself as trustee. Brown filed this action on June 13,

2003, and on November 10, 2003, the City of Royal Oak approved a transfer of the Redcoat’s stock

and liquor license to his mother, Kaye Barclay.

Brown’s complaint alleges that the Defendants engaged in a conspiracy of unlawful

retaliation, harassment, and “predetermined-denial” of the Barclay Trust’s transfer application. The

district court granted the Defendant’s motion for summary judgment, finding that Brown’s federal

and constitutional claims are not ripe for adjudication because the Trust, through Brown and the

other two successor trustees, withdrew its application before the Commission issued a final ruling.

The district court had original jurisdiction pursuant to 28 U.S.C. § 1331, federal question

jurisdiction, and supplemental jurisdiction under 28 U.S.C. § 1367. We have jurisdiction pursuant

to 28 U.S. § 1291.

II. FEDERAL CLAIMS

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A. RIPENESS

We review issues of justiciablity, such as ripeness, de novo. NRA of Am. v. Magaw, 132 F.3d

272, 278 (6th Cir.1997). “Ripeness is more than a mere procedural question; it is determinative of

jurisdiction. If a claim is unripe, federal courts lack subject matter jurisdiction and the complaint

must be dismissed.” Bigelow v. Michigan Dept. of Natural Resources, 970 F.2d 154, 157 (6th Cir.

1992) (quoting Southern Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 502 (9th Cir. 1990)).

“The ripeness inquiry arises most clearly when litigants seek to enjoin the enforcement of statutes,

regulations, or policies that have not yet been enforced against them.” Ammex, Inc. v. Cox, 351 F.3d

697, 706 (6th Cir. 2003).

As the Supreme Court has explained, the ripeness doctrine stems “both from Article III

limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction.” Reno

v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18, 113 S.Ct. 2485 (1993). The purpose of the

ripeness doctrine is

to prevent the courts, through avoidance of premature adjudication, from entangling

themselves in abstract disagreements over administrative policies, and also to protect

the agencies from judicial interference until an administrative decision has been

formalized and its effects felt in a concrete way by the challenging parties.

Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507 (1967).

In Ammex, Inc., we reiterated the standards for ripeness:

In determining whether a pre-enforcement challenge is ripe, three considerations

must be weighed. The first two deal with the “fitness of the issues for judicial

determination.” One aspect of the “judicial fitness of the issues” is the extent to

which the legal analysis would benefit from having a concrete factual context. The

second aspect of the “judicial fitness of the issues” is the extent to which the

enforcement authority’s legal position is subject to change before enforcement. The

third consideration deals with the “hardship to the parties of withholding court

consideration.”

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Ammex, 351 F.3d at 706 (citing Abbott Labs. 387 U.S. at 148-49). Furthermore, we noted that

“[w]here, as in this case, the statute at issue has not been enforced against [the plaintiff], and indeed

where a notice of intent to enforce has been explicitly withdrawn, the ripeness doctrine provides the

appropriate analysis for determining whether this case should be heard at this time.” Ammex, 351

F.3d at 706.

1. The Procedural Due Process Claim

In the case before us here, after their request for a third continuance was denied by the

Subcommittee, Brown and the other trustees of the Barclay Trust declined to pursue the Trust’s

transfer application to a final decision from the Royal Oak City Commission and instead withdrew

the application before the Commission could act. Because of Brown’s action, neither the MLLC nor

the Royal Oak city Commission ever denied the Trust’s transfer application or enforced any

regulation against the Trust. Therefore, as was the case in Ammex, there was no formalized

administrative decision.

Brown relies on Nasierowski Brothers Investment Co. v. Sterling Hts., 949 F.2d 890 (6th Cir.

1991), in arguing that his procedural due process claim is instantly cognizable in federal court

despite the Commission’s having issued no “final decision” on the transfer application. We find that

Nasierowski is inapposite.

Nasierowski involved a “pure” procedural due process claim arising from a zoning restriction

and Nazierowski’s request for an injunction prohibiting the city from enforcing an allegedly invalid

zoning classification against his property. Nasierowski, 949 F.2d at 893. The district court held that

a “taking” claim could not be adjudicated in federal court until the plaintiff had exhausted his

administrative remedies and failed in his efforts to obtain a use variance from the appropriate

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regulatory body. The district court held that because Nasierowski had failed to seek a variance from

the Board of Zoning Appeals, his claims were not ripe for adjudication. Id. We reversed, because

we concluded that Nasierowski had not alleged an unconstitutional “taking” of his property, but

instead had asserted that he was deprived of procedural due process when he was not accorded a

public hearing at which to challenge the zoning reclassification of his property. Id. We adhered to

the view that “a procedural due process claim is instantly cognizable in federal court without

requiring a final decision on a proposed development from the responsible municipal agency,” id.

at 894, explaining that

[c]onceptually, in the case of a procedural due process claim, “the allegedly infirm

process is an injury in itself,” whereas, in the context of a takings claim, the alleged

injury – a diminution in property value – cannot be assessed with any degree of

certainty until the municipality arrives at a final decision as to how the property

owner will be permitted to develop his property.

Id. (quoting Hammond v. Baldwin, 866 F.2d 172, 176 (6th Cir. 1989)). We went on to hold that

“Nasierowski’s injuries accrued and attached immediately when Council convened in executive

session and materially deviated from the recommendations of the planning commission, thus

subverting the purpose of the duly conducted notice and comment process.” Id.

Brown argues that Nasierowski controls because he has not alleged a “taking” claim, but has

asserted only that Defendants violated his due process, equal protection and First Amendment rights

by “issuing groundless liquor license violations, engineering his arrest, and issuing a false [police]

report regarding his criminal history, all to provide a basis for recommending disapproval of the

liquor license transfer request.” But Brown’s claim is not comparable to Nasierowski’s. Brown

cannot claim that he was not afforded a public hearing to challenge the denial of the Trust’s

application to transfer the stock and liquor license. Brown was not denied the opportunity for a

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public hearing, and the transfer application was never denied. Rather than attend the Subcommittee

meeting at which the application was scheduled to be considered, the trustees – of which Brown was

one – withdrew the application.

Brown has not alleged that the state or city requirements for transferring liquor licenses or

stock in liquor license establishments are unconstitutional, or that the Royal Oak City Commission

applied them arbitrarily in this case. Brown’s argument seems to be that if the Subcommittee had

considered the application, it would have relied on trumped up historical information and denied the

application, and therefore, the district court erred in distinguishing Nasierowski and in ruling that

Brown’s claims were unripe for federal adjudication. Nasierowski recognized that when “the

claimed injury is the infirmity of the process,” the claim is “instantly cognizable.” Nasierowski does

not extend to claims which are no more than speculation that the process, if it were permitted to

proceed, might be infirm. Brown’s “if we had some ham we could have a ham sandwich if we had

some bread” claim invites precisely the kind of premature adjudication that the ripeness doctrine

exists to prevent.

2. The Equal Protection Claim

Brown claims that the Defendants’ actions in regard to the application for transfer of the

stock and liquor license of the Redcoat deprived him of his right to equal protection of the laws. In

Bigelow v. Mich. Dep’t of Natural Res., 970 F.2d 154 (6th Cir. 1992), in which plaintiffs raised,

among other things, related claims of due process violation, equal protection violation, and improper

taking of property, we held that, like their taking claim, plaintiffs’ equal protection claim was subject

to ripeness review under Williamson County Regional Planning Comm’n v. Hamilton Bank of

Johnson City, 473 U.S. 172 (1985). Brown has not demonstrated the requisite finality here because

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he cannot show that his pursuit of further administration action would not be productive. See

Bigelow, 970 F.2d 158-59. Accordingly, we conclude that the district court did not err in dismissing

Brown’s equal protection claims on ripeness grounds.

B. The remaining federal claims

With the exception of the RICO claim,2 the district court dismissed all of Brown’s federal

claims because it found that they were not ripe for adjudication. We agree, as we have already

explained, that the procedural due process claim and the equal protection claim are not ripe. We will

affirm the dismissal of the remaining claims, but on other grounds. See Russ’ Kwik Car Wash, Inc.

v. Marathon Petroleum Co., 772 f.2d 214, 216 (6th Cir. 1985) (“A decision below must be affirmed

if correct for any reason, including a reason not considered by the lower court.”) We have combed

the 1690 pages of this record, and we conclude that Defendants are entitled to summary judgment

on each of Brown’s remaining federal claims because Brown has failed to provide sufficient

evidence to raise a genuine issue of material fact as to any of those claims.

We turn first to Count VI, Brown’s substantive due process claim. Brown claims that the

Defendants’ actions have deprived him of his “property interest relative to his right to receive a

bequest of Redcoat stock and a liberty interest relative to his right to pursue a career as manager of

[the Redcoat,]” and that “Defendant’s actions were arbitrary and capricious and there was no rational

basis for the refusal to recommend approval of the stock transfer with Plaintiff as trustee.” Brown

does not specify which Defendant acted arbitrarily, but from the context we assume he refers to Lt.

Foster, the officer who conducted the background investigation and recommended that Brown and

his brother did not meet the requirements for transfer of the stock and license. Brown apparently

2

The court dismissed the RICO claim on the merits and Brown does not appeal that aspect of the judgment.

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complains that actions actually taken by the Defendants – as opposed to actions that he believed they

would take had the application not been withdrawn – were arbitrary and without rational basis. The

record before the district court on summary judgment does not contain evidence to raise a genuine

issue of fact material to this claim. We note, for example, that it is undisputed that Brown is in fact

a manager of the Redcoat. There is no evidence in this record to support a claim that the Defendants

have prevented him from managing the tavern or from pursuing that career. Nor could a rational jury

conclude, based on the evidence in this record, that the citations issued to the Redcoat for violations

of the liquor laws over the years were issued in an attempt to provide a basis for some later action

by the City with regard to a transfer of the Redcoat’s stock or the liquor license, or that the

investigations of the Redcoat or Brown – or his mother and brother, for that matter – were

undertaken for abusive or illegitimate reasons. In short, the record contains no evidence of executive

action that could “properly be characterized as arbitrary, or conscience shocking, in a constitutional

sense,” County of Sacramento v. Lewis, 523 U.S. 833, 846 (1998), or of “conduct intended to injure

in some way unjustifiable by any government interest [which] is the sort of official action most likely

to rise to the conscience-shocking level.” Id. at 849.

Brown has not provided evidence from which a jury could conclude that the Defendants

refused or failed to prevent any of the harms of which he complains, or that Brown suffered any

cognizable injury as the result of an official policy or custom of the City pursuant to which the

individual Defendants acted or failed to act, or that any of the Defendants had or exercised any

supervisory authority over any other of the Defendants as alleged in Count II. Nor does the record

contain any evidence sufficient to permit a finding, required in order to prevail on Count III, a claim

under 42 U.S.C. § 1985(3), that any Defendant acted on the basis of racial or other class-based

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animus with regard to Brown or that any two of the Defendants acted in concert such that they were

engaged in a conspiracy. In the absence of the evidence necessary to establish the conspiracy

required to prevail on a claim under § 1985(3), Brown cannot prevail on Count IV, a claim that the

Defendants violated 42 U.S.C. § 1986, which provides a cause of action against persons who, with

knowledge of the §1985 conspiracy and the power to prevent the conspirators’ wrongful acts, fail

to do so. Finally, the record contains no evidence from which a jury could find in Brown’s favor on

Count VIII, his claim that the Defendants’ actions were in retaliation for the filing of – and prevailing

in – a lawsuit against the City. Certainly this would qualify as protected activity for purposes of a

claim of retaliation under the First Amendment, but the record clearly demonstrates that Brown was

not a party to that lawsuit.

We affirm the district court’s dismissal of these claims, but because Brown failed to provide

sufficient evidence to raise a genuine issue of fact material to any of them, they must be dismissed

with prejudice.

III. ATTORNEYS’ FEES

Defendants filed a Motion for Attorney Fees on December 29, 2004. On March 11, 2005,

the district court denied the Defendants’ motion, and Defendants now appeal. We review the denial

of a Motion for Attorney Fees for abuse of discretion. See Riddle v. Egensperger, 266 F.3d 542, 547

(6th Cir. 1995).

Defendants argue that they are entitled to attorneys’ fees and costs because Brown and his

counsel were aware from the outset of the litigation that his claims were without legal or factual

foundation. Defendants maintain that they are entitled to $206,677.00 in attorneys’ fees pursuant

to 42 U.S.C. § 1988 and 28 U.S.C. § 1927. Section 1927 of Title 28 provides:

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Any attorney or other person admitted to conduct cases in any court of the United

States or any Territory thereof who so multiplies the proceedings in any case

unreasonably and vexatiously may be required by the court to satisfy personally the

excess costs, expenses, and attorneys’ fees reasonably incurred because of such

conduct.

The district court disagreed and was not persuaded that the of conduct Brown’s counsel

“unreasonably and vexatiously” multiplied the proceedings:

The fact that plaintiff pleaded in his complaint that the liquor license transfer

application was withdrawn before the City Commission or MLLC ruled on the

transfer application does not demonstrate that plaintiff’s constitutional claims were

frivolous, unreasonable, without foundation, or pursued in bad faith, as required to

award reasonable attorney fees to a prevailing defendant under § 1988. While

ultimately unsuccessful, plaintiff advanced non-frivolous arguments why the ripeness

doctrine should not apply. See Nasierowski Brothers v. Sterling Hts., 949 F.2d 890,

894 (6th Cir. 1991).

On appeal, Defendants contend that the court abused its discretion in denying their motion

for fees. Noting that they had prevailed on the RICO claim below, entitling them to awards under

§ 1988, Defendants go on to argue that attorney fees should be awarded because the Plaintiff’s action

was frivolous, unreasonable, or without foundation. Defendants argue that under this standard for

awarding attorney fees spelled out in Christiansburg Garment v. EEOC, 434 U.S. 412, 421 (1978),

attorney fees should be awarded when the court finds that the claim was groundless at the outset “or

that the plaintiff continued to litigate after it clearly became so.” Hughes v. Rowe, 449 U.S. 5 (1980).

The district court recognized and considered the Christiansburg Garment framework for

analyzing Defendants’ motion and nevertheless held that Brown’s claims did not rise to the level of

“frivolous, unreasonable, or without foundation.” The court considered Brown’s argument from

Nasierowski and found it sufficient to withstand a challenge under § 1988 and § 1927. The court

reviewed the entire record and determined that fees were not warranted. Brown’s constitutional

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claims may have lacked real legal merit from the beginning, but his attempt to extend Nasierowski

presented a non-frivolous legal argument and the district court was entitled to deny attorneys’ fees

after considering the merits of that argument. While we might have come to a different result, we

find no abuse of discretion here.

CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court dismissing

Brown’s procedural due process and equal protection claims without prejudice because they are not

ripe. We AFFIRM the dismissal of all of the remaining federal claims, but because we conclude

that they are wholly unsupported by the evidence in the record, we remand those claims to the district

court with instructions to dismiss them with prejudice. We AFFIRM the dismissal of the state law

claims without prejudice on the grounds stated by the district court. Finally, we AFFIRM the denial

of Defendants’ motion for attorney fees and costs.

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