Petition for Writ of Certiorari — In re City of Henderson

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OFFICE DETER

No. 93-

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1993

IN RE CITY OF HENDERSON, A NEVADA

MUNICIPAL CORPORATION, JAMES GOFF, CHIEF

OF POLICE OF THE CITY OF HENDERSON,

Petitioners

Vv.

NEVADA ENTERTAINMENT INDUSTRIES, INC.,

A NEVADA CORPORATION AND DANIEL BISHOP,

Real-Parties In Interest

ON PETITION FOR A WRIT OF MANDAMUS (OR

CERTIORARI UNDER RULE 11) TO THE UNITED

STATES COURT OF APPEALS FOR THE NINTH

CIRCUIT, AND THE HON. JAMES R. BROWNING,

AND WILLIAM C. CANBY, JR., CIRCUIT

JUDGES, AND ROBERT J. KELLEHER, SENIOR

DISTRICT JUDGE SITTING BY DESIGNATION

PETITION FOR A WRIT OF MANDAMUS

(OR CERTIORARI UNDER RULE 11)

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SHAUNA M. HUGHES JAMES J. CLANCY

City Atlomey (Counsel of Record)

LIZA CONROY CAROL A. CLANCY

Assistant City Attomey 9055 La Tuna Cyn. Rd.

Sun Valley, CA 91352

City of Henderson (818) 352-2069

240 Water Street

Henderson, NV 89015

(702) 565-2394 Counsel for Petitioners

Whether, the Huffman abstention

doctrine is to be applied differently

from other abstention doctrines; that

is, under Huffman v. Pursue, Ltd., 420

U.S. 592 (1975), must the United States

District Court defer to the state court

judicial system and dismiss for lack of

subiect matter jurisdiction the federal

civil rights action of a State of Nevada

citizen which seeks to enjoin

enforcement of a quasi-judicial order of

the Henderson City Council, sitting as a

hearing board for the State of Nevada;

which revoked the federal plaintiffs’

business license to do business in

Henderson, Nevada, based on the City

Council’s finding of a fraudulent

business license application; which

-jii-

order was pending in the state system

and had been issued and served, but

stayed for 10 days to permit an appeal

to the Nevada State District Court;

during which stay the Nevada citizen

fiied a civil rights lawsuit for an

injunction under 42 U.S.C. Section 1983

be considered; the lack of which the

City of Henderson pleaded as a defense

on a motion to dismiss for lack of

subject matter jurisdiction under the

Eleventh Amendment and this Court’s

abstention ruling in Huffman, supra.

Whether an Opinion expressing a

unanimous decision of the Court of

Appeals for the Ninth Circuit:

(1) that the principles of law

-iii-

expressed by Chief Justice

Rhenquist in Huffman v. Pursue,

Ltd. control and that the

abstention doctrine applies to the

facts set forth; and

(2) that the federal

plaintiffs have not stated a cause

of action which establishes subject

matter jurisdiction for a_ federal

injunction under 42 U.S.C. Section

1983; and

(3) that the cause of action

must be dismissed for lack of

subject matter jursidiction; and

(4) in which the Court has

made findings of fact and

conclusions of law and entered a

Judgment thereon, in a written

Opinion which the Court has

certified for publication as meeting the

federal standards set forth in Rule 36

of the Federal Rules of Appellate Proce-

dure and which has been published as 8

-iv-

F.3d 1348 (CA 9, 1993);

may thereafter be withdrawn by the Court

without providing a good and lawful

reason?

III

Whether the Ninth Circuit Court of

Appeals Order dated April 7, 1994

reading The petition for rehearing is

granted. The opinion reported at 8 F.3d

1348 (CA 9 1993) is withdrawn is_ void

for: (1) lack of subject matter

jurisdiction, and (2) its failure to

give any reason for the withdrawal?

IIla

Whether a writ of mandamus will lie

to require that the April 7, 1994 Order

be vacated as a void order?

Li AB Arai aip cy

sye

Whether the Ninth Circuit Court of

Appeals Memorandum, dated May 4, 1994,

is also void because of (1) lack of

subject matter jurisdiction, and (2) it

also does not address the underlying

issue that the Opinion and Judgment on

November 2, 1993 may not be withdraw

except for a ‘good and lawful reason’?

IVa

Whether a writ of mandamus will lie

to require that: (1) the Court of

Appeals’ May 4, 1994 Memorandum be

vacated as avoid Order, and (2) the

November 2, 1993 Opinion and Judgment be

reinstated?

-vVii-

TABLE OF CONTENTS

PAGE

pp RE Oe Ee er ee ix

QUESTIONS PRESENTED ON PETITION FOR

WRIT OF MANDAMUS AND WRIT OF

CERTIORARI UNDER RULE 11 OF THE

ee EE, clans Ube bt dnc 6 owe o's i

Raa ds ils ho od aloled 6 os Ube oeee< 1

gE oe a 6

ENS 5 We ala ac 0'b es Slee bas owe Oe 7

STATUTORY PROVISION INVOLVED.......... 9

ee Es 6b wba eb ee Cane sé ee t 9

ee ee ee 9

DEAE eeere Ge Bee GN So wctcccscesede 21

REASONS FOR GRANTING THE WRIT OF

MANDAMUS (OR CERTIORARI UNDER RULE

BS cc e's} ab oO et clnis Wb ale 6 Ces 0 0'e dv 0 0c 42

F THE CITY OF HENDERSON'S

“HUEEMAN” CHALLENGE BEFORE THE

FEDERAL COURT INVOKED FOUR BASIC

JURISDICTIONAL PRINCIPLES OF LAW

WHICH ARE NEVER WAIVED............... 44

iI. THE JURISDICTION ISSUE WAS

Se EE a ok & oe anle Rewer ebee cece dicn 47

III. THE COURT OF APPEALS SHOULD BE

ORDERED TO WITHDRAW ITS MAY 4, 1994

MEMORANDUM AS A DECISION WHICH IS

ULTRA VIRES, BEING IN EXCESS OF

THE COURT’S “SUBJECT MATTER

STE cas dws Gbaetbaees sek cecccnce 48

| sassinidien

-Viii-

TABLE OF CONTENTS

IV. THE COURT OF APPEALS SHOULD BE

ORDERED TO REINSTATE ITS NOVEMBER

2, 1993 OPINION. .... cc cccccvesvevcees 51

V. THE COURT OF APPEALS SHOULD BE

ORDERED TO AMEND ITS NOVEMBER 2,

1993 OPINION TO CONFORM TO THE LAW

IN THE AJONA, CITY OF TEMPE, AND

OTHER NINTH CIRCUIT CASES............ 52

VI. THE COURT OF APPEALS SHOULD BE

ORDERED TO VACATE ITS MAY 4, 1993

MEMORANDUM DECISION AND ITS CONCOMITANT

ORDER THAT ITS MEMORANDUM DECISION MAY

MOT BE CITED. wc cccccsccncsntcccsseres 53

VII. THE COURT OF APPEALS SHOULD BE

ORDERED TO REMAND THE CASE TO THE

UNITED STATES DISTRICT COURT FOR A

HEARING ON THE INJUNCTION BOND AND

DAMAGES TO THE CITY BY VIRTUE OF

THE WRONGFUL INJUNCTION AND THE

CITY’S RIGHT AS THE PREVAILING

DEFENDANT ON THE HUFFMAN ABSTENTION

DOCTRINE TO AN ATTORNEY FEE UNDER

42 U.S.C. SECTION 1988 ON THE GROUND

THAT THE FILING WAS IN BAD FAITH,

FRIVOLOUS, UNREASONABLE AND WITHOUT

FOUNDATION. ....c.ccccccccsveessscseces 60

COMCLUBION. wc ccrccstesvesccscessesess 65

‘

<> ite serie bat

the State of Hawaii,

17 F.3d 1994 (CA 9, 1994)..... S2.-: 87.23

Chisholm v. George,

RN WER SEM Be. see 35

S60 U.0. GOs CEGRII i icc neck od a. 2, 53, 55

Ex Parte Young,

EA We aT See ‘. £,'36.° 29

40, 41, 46, 50

Fresh International Corp. v.

, } | Lal Re] : :

re Se aie eS) | See 58, 63

Huffman v. Pursue, Ltd. ’

420 U.S. 592 (1975)........ vee fem * 9

iO Bic BO. BO, 21, 22. 23.

$4. 38, 26.1 27s. 28, 29,32,

S4, 62,: 462, 42;.45, 47, 49,

50, 51, 53, 55, 56, 61

bal

eS ee ay 61

Midd - ty Ethic oe

Garden State Bar Ass'n,

Pg Sgt Ge” ae 55, 61, 62

Mitchum v. Foster,

7 oe eee tease). .,..4, 38.°37..40. 41

ee a ere 2, 3, 26

TABLE OF AUTHORITIES

PAGE

FEDERAL CASES

New Orleans Public Service v.

69%. U5 Bee Bees bia ee ods 63, 64, 65

Nintendo of America, Inc. v.

Lewis Gallob Toys, Inc.,

5G Fie ee Se as cc cc vec scene 60

ose : Tale -

Christian Schools, Inc.,

PS gue Oe Bee cL Ne. Pe ee 63, 65

Partington v. Gedan,

S60 Fiage TG CCAD, . BOOS). occ caccs 58, 63

Partington v. Gedan,

961 Fie CSR LOA. O, AGORD.. h vins bv es 59, 63

Pennzoil Co. v. Texaco, Inc.,

468 0.8. °S Si aa a ke xe ss 45

Rooker v. Fidelity Trust Co.,

263 US 81S. EG eka eet ass 2, 53, 55

Stanley v. University of So. Cal.,

id FF. 38° 3383 CGS, Bees sce xs 26. 32

Stratton v. St. Louis Southwestern

Railroad Co.,

OR EL RE >t oe Serer en Gory er 9

Watson v. Buck,

ae Bee ee OE Ds 8 soe dw ed ec ek 14

Will v. U.S.,

Be ee PCS 6 Sc ae Ke a es 9

MIS i Site as teeters

-xi-

TABLE OF AUTHORITIES

PAGE

FEDERAL CASES

World F Drink: E ;

City of Tempe,

me By Ge oy, Sida Bl Pe. Sree a2, 236,

$32, 83, 36

Younger v. Harris,

SOE Gi. aes OE ROOTES CU Kw He 8 8 Ka 20, 41

STATE CASES

Florida Power & Light Co. ae Canal

t] r . Fi da,

423 So.2d 421 (Fla. Dist. Ct. App. 1982)

(eee Cased ot gp. & t<-d... 6% 22, 48

Las Vegas v. Nevada Entertainment, Inc.

772 P.2@ 1275 (Nev.&.Ct., 1989)....432,

CONSTITUTIONAL PROVISIONS

Uni Stat ; 7

Amendments

Ca A. ko er ee aS eat oe We 54

THR SS 27, 20, 46, 46, B64

Eleventh....5, 44, 418. 22, 27,

29, 20, 26, 42, 43;

44, 46, 54

POMP COIs 656 8 6 Oe Oe 54

FEDERAL STATUTES

28 U.S.C.

Section 1651(a)

i ee ee Ps ks oso 0 0 oe oe

Section 2283

(Anti-Injunction

oo 4S a ar ere

-“Zzii-

a2 lS «.

section 1993... 36° Baten 2: 2 ee

34, 35, 40, 41, 49,

61, 64

Section 7AGOS. o6s:x.kshi«eaidas 60, 61, 64

FEDERAL RULES

U.S. Supreme Court Rules

mene BR... sowelak + oe oie oO ee ae

Federal Rules of Appellate Procedure

Re Gs 5c bs ele Oe eee ‘. ee ee, BA

Fed | Rul + Civil F )

ed DE SCO DD ois ats aS eee 12

SE Re a ee en ee eng 29

Rul + the Ninth Cj

I aa sn etn on eee ce oe 16

Bite (2042 is shi aaa ieee 18

TEXTS

Casad, Robert; Jurisdiction in Civil

Aptiane, ( 1983). <04¢8040eo eee 33

Redish; Fedeial Jurisdiction

COORG). 0 cn seen se eee a6, 2%

aati inn '

No. 93-

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1993

IN RE CITY OF HENDERSON, A NEVADA

MUNICIPAL CORPORATION, JAMES GOFF, CHIEF

OF POLICE OF THE CITY OF HENDERSON,

Petitioners

NEVADA ENTERTAINMENT INDUSTRIES, INC.,

A NEVADA CORPORATION AND DANIEL BISHOP,

Real-Parties In Interest

ON PETITION FOR A WRIT OF MANDAMUS (OR

CERTIORARI UNDER RULE 11) TO THE UNITED

STATES COURT OF APPEALS FOR THE NINTH

CIRCUIT, AND THE HON. JAMES R. BROWNING,

AND WILLIAM C. CANBY, JR., CIRCUIT

JUDGES, AND ROBERT J. KELLEHER, SENIOR

DISTRICT JUDGE SITTING BY DESIGNATION

PETITION FOR A WRIT OF MANDAMUS (OR

CERTIORARI UNDER RULE 11) TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

INTRODUCTION

The City of Henderson, Nevada,

respectfully petitions for a writ of

mandamus or writ of certiorari under

Rule 11 to the United States Court of

-2-

Appeals for the Ninth Circuit and the

Honorable James R. Browning, and William

C. Canby, Jr., Circuit Judges, and

Robert J. Kelleher, Senior District

Judge sitting by designation, requiring

the Ninth Circuit Court of Appeals’ to

withdraw its May 4, 1994 Memorandum

decision as an ultra vires act which is

in excess of the Court’s subject matter

jurisdiction under the Tenth and

Eleventh Amendment to the Federal

Constitution, and the Huffman abstention

doctrine, and the principles stated in

the Rooker-Feldman doctrine; and to

reinstate the Court’s earlier written

Opinion and Judgment which was’ entered

on November 2, 1993, in which the Court,

after de novo review, filed the Court’s

written Opinion which was certified for

publication as meeting the requirements

of FRAP, Rule 36, and Circuit Rule 36-2,

and was reported in the advance’ sheets

as Nevada Entertainment Industries, sNc. |

| |

ings wrt

-3-

v. City of Henderson, 8 F.3d 1348 (CA 9,

Nov. 2, 1993) and held in a_ unanimous

opinion that the Huffman abstention

doctrine did apply and stated, as its

conclusion of law, at page 1353:

“Conclusion™

“The decision of the district court

refusing to abstain from exercising

jurisdiction is REVERSED and the

case is REMANDED to the district

court with instructions to vacate

its judgment and dismiss the

complaint.”

The City of Henderson contends that,

having made the findings of fact that

the Nevada Entertainment’s Civil Rights

complaint (42 U.S.C. Section 1983) was

defective in failing to meet the

“heightened pleadings of extraordinary

circumstances, pursuant to the basic

principles of law expressed in Huffman

Vv. Pursue, Ltd., 420 U.S. 592 at 612-613

(1975), the Ninth Circuit Court of

Appeals had exhausted its jurisdiction

(as well as the U.S. District Court) and

thereby lost subject matter jurisdiction

and thereafter (under the Eleventh

Amendment challenge by the City of

Henderson acting on behalf of the state)

could not take any further judicial

action in relation to the defective

federal complaint, and its April 7, 1994

Order and its May 4, 1994 Memorandum

decision were therefore ultra vires’

(void). See and compare Ex parte Young,

209 U.S. 123 (1908), in which the acts

of the Attorney General of Minnesota

were held to be ‘ultra vires and _ the

essential ingredient upon which the 42

U.S.C. Section 1983 federal action was

ultimately upheld in Mitchum v. Foster,

407 U.S. 225 (1972), as against an

Eleventh Amendment challenge.

Further, the U.S. Court of Appeals

and the U.S. District Court are

concluded by their relitigation findings

on the ‘fraud’ issue, that the quasi-

judicial action taken by the City

Council on behalf of the State was pot

ee ewe a el

-5-

“ultra vires, from which it must _ be

concluded as a matter of law that the

complaint itself which is before the

Ninth Circuit Court of Appeals does pot

and cannot (in the light of the States

continuing Eleventh Amendment’ challenge

in four years of litigation), be amended

to state a valid 42 U.S.C. Section 1983

cause of action, (because of Ex parte

Young) and cannot provide a foundation

for the Court’s judicial action on May

4, 1994.

Since a valid federal civil . rights

action is not pleaded, the complaint

Must be dismissed for failure to state a

cause of action upon which federal

jurisdiction of the subject matter can

be based.

This cause is still before _ the

Ninth Circuit Court of Appeals on

Petitions for Rehearing filed by both

parties. The City of Henderson filed a

Petition for Rehearing on May 18, 1994

-6-

(see copy at Appendix 7), and Nevada

Entertainment has applied for and

received an extension of time until June

21, 1994 in which to file a Petition for

Rehearing.

Petitioners further requests’ that

this Court shorten the time and require

that the Respondents, Court of Appeal

for the Ninth Circuit and Nevada

Entertainment Industries, Inc. et al.,

Real Parties in Interest, file a

response to this Petition by June 21,

1994, so that this Court may have the

opportunity to act upon this Petition

prior to the end of the 1993 October

Term.

OPINIONS BELOW

A copy of the decisions of the

United States District Court, District

of Nevada, and the United States Court

of Appeals for the Ninth Circuit, as to

which petitioner seeks relief, appear at

Appendices 1, 2,3, 5, and 6.

JURISDICTION

The decision and final judgment of

the United States District Court,

District of Nevada, by the Honorable

Lloyd D. George, in the Civil Rights

Action (42 U.S.C. Section 1983) Nevada

Ent bai b Induetn) I ) }

Plaintiff at ._Hend )

al.. Defendants, CV-S-90-264-LDG(LRL),

was filed on November 27, 1992. See

copy Appendix 1.

The Order of the United States

Court of Appeals for the Ninth Circuit

(Noonan and 228. Nelson, Circuit

Judges), continuing preliminary

injunction pending disposition of

appeal, was filed December 22, 1992.

See copy at Appendix 2.

The first Opinion of the United

States Court of Appeals for the Ninth

Circuit which upheld the City’s

contention that the Huffman abstention

doctrine applied in the City’s

cross-appeal of the decision and final

judgment of the District Court in Nevada

En! bai t Industri I Cit

of Henderson et al. was filed November

2, 1993. See copy at Appendix 3.

The Court of Appeals for the Ninth

Circuit, by Order dated April 7, 1994,

(which the City of Henderson contended

is an act in excess of the Court's

subject matter jurisdiction), withdrew

its Opinion dated November 2, 1993. See

copy at Appendix 5.

The Memorandum decision of the

Court of Appeals for the Ninth Circuit,

(which the City of Henderson contends is

an act in excess of the Court’s subject

matter jurisdiction) was filed on May 4,

1994. See copy of Memorandum Decision

at Appendix 6.

The jurisdiction of the United

States Supreme Court as to this Petition

for a prerogative writ is founded on 28

U.S.C. Section 1651(a), Stratton v. St.

-9-

Louis Southwestern Railroad Co., 282

U.S. 10, 16 (1930), and Gili wv. 4...

389 U.S. 90, 95.

The jurisdiction of the United

States Supreme Court as to the

alternative Petition for a Writ of

Certiorari is founded on Rule 11 of the

United States Supreme Court.

The special and unusual

circumstances which warrant exercise by

this Court of its discretionary power to

issue the writ of mandamus/or

certiorari, ag requested in this

petition, is set forth in detail under

the heading, Reasons for Granting the

Writ.

STATUTORY PROVISION INVOLVED

The federal civil rights complaint

involved herein was filed under 42

U.S.C. Section 1983.

STATEMENT OF FACTS

Background.

This case has been before this

-10-

Court on two (pre-trial) petitions for a

writ of certiorari:

City of Henderson, a Nevada

Municipal Corp. et al. v. United States

District Court, District of Nevada,

Nevada Entertainment Industries, Inc., a

Nevada corporation and Daniel Bishop,

Real Parties in Interest:

(1) in the Supreme Court of the

United States, October Term 1990, No.

90-1771, filed on May 16, 1991, and

denied on October 7, 1991; and

(2) in the Supreme Court of the

United States, October Term 1992, No.

92-643, filed on October 13, 1992, and

denied on December 7, 1992.

An additional copy of the

petition for writ of certiorari and

supplemental brief in No. 92-643 is

filed with the Clerk of this Court for

purposes of reference in connection with

this Petition for Writ of Mandamus.

-ljlli-

An application for stay of the

trial pending a ruling on the petition

for writ of certiorari in No. 90-1771

was made to Justice O’Connor on May 9,

1991 and denied on May 16, 1991. A

second application in No. 90-1771 was

made to Justice Kennedy who referred the

matter to the Court which denied the

application on June 10, 1991. An

application for stay of the trial

pending a ruling on the petition for

writ of certiorari in No. 92-693 was

made to Justice O’Connor and denied by

her on October 27, 1992.

On November 27, 1992, while the

petition for writ of certiorari in No.

92-649 was still pending in this Court,

the United States District Court filed

its Opinion and entered a judgment in

CV-5-90-264-LDG (LRL). See Appendix A.

On November 27, 1992, the United

States District Court entered an Order

and Final Judgment in which the Federal

-12-

Court erroneously relitigated the

vi whi Ww

hearing board for the State of Nevada

and rendered judgment in favor of said

(quasi-judicial) administrative state

board on the’ stipulated record, lifted

the previously issued preliminary

injunction, and made the following

at pages 7 and 8 of its Decision:

“In the present case,

plaintiffs attempted to circumvent

the City’s Code by following a

course of deception. Initially,

plaintiffs applied for a business

license for an adult business. The

City then informed the plaintiffs

of certain conditions that an adult

business had to meet before a

license would be authorized. In

response to this information,

plaintiffs did not seek judicial

protection from the City's

provisions. Nor did they attempt

to meet the conditions for

obtaining a license for an adult

business. Nor did plaintiffs

Challenge the law by opening and

operating an adult business without

obtaining any license.

“Rather, plaintiffs inquired

whether a business license would be

Py ee Ha CP i

Ws CE Wea binky EAE RLY SL Hane easter aa

hi ad tibia ci eith ath iti as

«{13-

approved for a general business.

The City responded that such an

application for a general business

would be approved. Plaintiffs,

fully aware that a license for a

general business would be approved

whereas an application for an adult

business would be rejected,

Submitted a second application

which specifically omitted any

reference to an adult business.

This second application was

approved and, on February 1, 1990,

plaintiffs opened an adult

business. The City then revoked

the plaintiffs’ business’. license,

finding that plaintiffs had

misrepresented the nature of the

business on the license application

in order to obtain a license. As

permitted by H.M.C. Section

4.04.150, the Council revoked

plaintiffs’ ticense for making a

faise or fraudulent statement in

the application for a license.”

On November 30, 1992, Defendants

ordered Plaintiffs to close their

business.

On December 2, 1992, Plaintiffs

filed their Notice of Appeal from the

Judgment, and also moved the United

States District Court for an injunction

pending aa. pursuant to Rule 62(c) of

the Federal Rules of Civil Procedure.

On December 6, 1992, Defendants

filed a Supplemental Brief with the

United States Supreme Court in No.

92-643, calling the United States

Supreme Court’s attention to the above

described Final Judgment and

Petitioners’ contention that the United

States District Court’s Findings of Fact

and Conclusions of Law. in the civil

rights action presented a patent

Flevents ) ) rlict

sas UW tablished Petiti

Laine ; Liat Lief bie

ty fed } — b

authority of Huffman v. Pursue, Ltd.,

420 U.S. 92 (1975), and_Watson v. Buck,

313 U.S. 367 (1941), pursuant to a

peremptory writ of mandamus under the

All Writs Act. Reference: footnote 1 on

page 10, supra. See Supplemental Brief

at pages 12 - 36.

At the conclusion of the Supplemen-

tal Brief, the City argued, at pages

36-37:

«$<

“ CONCLUSION”

For all of the reasons’. stated

in the Petitions for Writ of

Certiorari in Case No. 90-1771, and

Case No. 92-643, and the

Supplemental Brief herein in Case

No. 92-643, Petitioner is entitled

. to immediate relief either by the

issuance of an extraordinary Writ of

i Mandate under the All Writs Act,

! vacating the Decision of the United

State District Court entered on

November 27, 1992, and mandating a

dismissal of the federal civil

rights action, or by this Court’s

grant of the Petition for Writ - of

Certiorari in Case No. 92-643 for

resolution of Questions I and IV

regarding the jurisdictional issue 7

and the requirement for ‘heightened

pleadings where a right to relief

under Huffman v. Pursue, Ltd, has

been validly raised, and a

resolution of the additional issue

as to whether attorney fees’- should

be granted to a prevailing

defendant in a United States

District Court Civil Rights Action

which has wrongfully been filed by

a business corporation whose

license had been validly revoked by

the City of Henderson because of

the fraud which was perpetrated by

the corporation in its

application for a business license.

eee es

On December 7, 1992, the United

States Supreme Court denied the Petition

for Writ of Certiorari in No. 92-643.

On December 8, 1992, the United

States District Court filed an Opinion

-16-

in which it denied the Plaintiffs’

motion for injunction pending appeal.

On Monday, December 14, 1992,

Circuit Judge Noonan filed an order

which temporarily stayed _ the United

States District Court’s November 25,

1992 Order, which had lifted the June 5,

1991 preliminary iniunction against

Defendants and set 12 o'clock noon. on

Friday, December 18, 1992 as the

deadline date for a Response to the

filing.

On Friday, December i18, 1992, the

City filed: ¢g) ° 4t¢e rie! gd to the

Emergency Motion Under Circuit Rule 27-3

for an Injunction Pending Appeal; (2) a

Motion for Expedited Appeal; and (3) a

A copy of the City’s Response is

being filed with the Clerk of this Court

for purposes of reference in connection

with this Petition for Writ of Mandamus.

cilities ais

te nn Dae cc ATs te ee Lina et 5 tA at Crk ea Bette wie

-17-

Motion for Judgment of Dismissal on

Grounds of Comity and Lack of Subject

Matter Jurisdiction, pursuant to Huffman

v. Pursue, Ltd..

On December 22, 1992 the Court of

Appeals (Noonan and T.J. Nelson) filed

an order: (1) denying the Motion to

Dismiss; (2) granting Licensees’

E Mot j eas 7 Pendi

Appeal; (3) staying the U.S. District

Court November 25, 1992 Order; and (4)

expediting the appeal, ordered a

detailed brief schedule, and set the

matter for argument in San _ Francisco

during the week or #oeril iz (see

Appendix 2 to this Petition).

On December 22, 1992, the City

filed its Notice of Cross-Apreal to the

U.S. Court of Appeals for the Ninth

Circuit from the Trial Judgment entered

on November 27, 1992.

On May 10, 1993, the Court oak

Appeals for the Ninth Circuit heard oral

-18-

argument during which the Court’ stated

to the City’s counsel of record that it

was not interested in hearing argument

of the Eleventh Amendment jurisdictional

issue.

On November 2, 1993, the Court of

Appeals filed an Opinion and certified

the same for Publication under Circuit

Rule 36-2, in which it reversed the

Judge of the United States District

Court and held that the Court’ should

have abstained under Huffman v. Pursue,

Ltd., as contended by the City in its

cross-appeal. (See copy at Appendix 3.)

The Court of Appeals further held

in relation to attorney's fees that The

District Court did not abuse its

discretion in concluding this was not

such a case. Nor do the circumstances

justify an award of fees on appeal.

The Opinion contained the following

conclusion:

~19-

“The decision of the district

court refusing to abstain from

exercising jurisdiction is reversed

and the case is remanded to the

district court with instructions to

vacate its judgment and dismiss the

complaint. ~

On November 30, 1993, Nevada

Entertainment Industries, Inc. et al

filed a petition for rehearing and

Suggestion that the Court rehear_ the

matter en banc.

On January 18, 1994, the City of

Henderson et al. filed their —Response

to the Petition for Rehearing and

Suggestion for Hearing en Banc.”

On April 7, 1994, the Court of

Appeals filed an order reading:

“The petition for rehearing is

granted. The opinion reported at 8

F.3d 1348 (CA 9, 1993) is

withdrawn. ~

On May 4, 1994, the Court of

Appeals filed a Memorandum Opinion in

which it noted in a footnote on page i,

that the Memorandum was pot appropriate

for publication and may not be cited to

or by the court of the circuit.

Thereafter, the court reexamined the

city?’ i indicia! Li a

held that the district court’s finding

of deception by Nevada Entertainment

Industries, Inc. et al., applied and was

amply supported by the record and

affirmed the district court’s judgment

on that basis, and dismissed the City’s

cross-appeal that the action should have

been dismissed under Younger v. Harris,

401 U.S. 37 (1971) as moot (see copy at

Appendix 6). The Court made no ruling

on the City’s cross- appeal that’ the

City was entitled to attorney fees.

This was clear error. Having

held that Huffman applied, the Court

lacked ‘subject matter jurisdiction.”

There was nothing left for the federal

court to adjudicate. The City of

Henderson et al. (acting at the

direction of the State of Nevada) as a

“person no longer was before the Court.

See page&2_, infra.

, ‘

ro } ~ sy

+ &

-21-

On May 17, 1994, the Court of

Appeals filed an order granting Nevada

Entertainment Industries, Inc. et al.’s

motion for extension of time until June

i, 1994 to file a petition for

rehearing.

On May 18, 1994, the City of

Henderson filed a Petition for Rehearing

as tc the Court of Appeals Memorandum of

May 4, 1994. See copy at Appendix 7.

STATEMENT OF THE CASE

At the present time a raging

conilict exists in the Ninth Circuit

Court of Appeals (and other circuits) as

to the exact meaning of the Huffman

Abstention Doctrine. The conflict is

accurately described as ‘raging” even

though the controversy is not readily

apparent on the surface from the

individual opinions of the Justices

themselves and can only be understood

through a close examination and analysis

of what has taken place in this case and

-22-

what is and has been taking place in the

twenty years since Huffman yv. Pursue,

Ltd. was decided. For example, see _ the

short concurring opinion in World Famous

Drinking Emporium v. City of Tempe, 820

F.2d 1079 at 1081 (CA 9, 1989), in which

Circuit Judge (now Associate Justice

Kennedy) distinguished and accurately

defined the Huffman abstention doctrine

as the doctrine of dismissal for lack

of jurisdiction pursuant to Huffman v.

Pursue, Ltd.” -- a distinction and

definition which Circuit Judge Tang and

a number of the Ninth Circuit Judges

will not accept nor do they wish to hear

argument upon. The real meaning of

Huffman is blurred.

As a result of this “silent

treatment by the Circuit Judges on the

issue which is the very ‘heart’ of the

Huffman abstention doctrine and the

treatment accorded this issue by highly

qualified attorneys for the federal

-23-

plaintiffs who practice in this area and

know the value of maintaining ‘silence’

where challenges are made in support of

Justice Kennedy's position (so as not to

open Pandora’s Box’), the exact meaning

is lost, and constitutional injustices

occur in a great number of cases where

the dispute clearly belongs in the state

court, as here.

This is understandable, because it

deals with a ‘lack of jurisdiction’

within the federal system, and there are

not many justices on the federal bench

who are willing to make or join in an

analysis which may limit the

“jurisdiction of the federal bench. As

a result, Huffman abstention is pot

being applied in the manner intended by

this Court’s opinion in Huffman and the

relevant cases.

The application herein is typical

-- the Eleventh Amendment violation is

patent, yet the Court of Appeals in four

-24-

years of litigation has refused to apply

the doctrine with its full-meaning so

that the confusion which exists as to

the nature of the State of Nevada's

sovereign rights can be put to rest.

At oral argument the Justices

stated they were not interested in

ergument on the jurisdiction issue.

When they issued their opinion in favor

of the Huffman abstention doctrine, a

decision which the _ facts absolutely

required, and which could not be

avoided, the Court crafted its opinion

to avoid a discussion on the

jurisdiction issue, a tactic which

counsel for federal plaintiffs

immediately took advantage of. In

federal plaintiffs’ petition for

rehearing now made to the 36 en banc

Circuit iudges on a suggestion for

hearing by that body, the federal

plaintiffs introduced a number of

additional ofbuscating issues which

-25-

would not be apposite had the Court

stood firm and elaborated on the

principles behind Justice Kennedy's

doctrine of dismissal for lack of

‘ jurisdiction. The foundation for’ those

: new arguments was the federal

plaintiffs’ pew argument that the

“jurisdiction issue” had been ‘waived. "

Subject matter jurisdiction is

: never waived -- a maxim which is the

: very heart of Huffman abstention.

However, because the panel of federal

circuit judges would not rule on this

issue, the Court of Appeals’ silence on

this matter makes a correct analysis

virtually impossible.

In its “Conclusion at pages 16 et

seq. of its Response to the Petition for

Rehearing and Suggestion for Rehearing

en Banc, filed January 18, 1993, the

City made note of the fact that the

weaknesses in the November 2, 1993

Opinion invited further obfuscation in

~-26<

the Ninth Circuit in relation to Huffman

abstention cases, and asked the Court to

remand the case to the United States

District Court for an exercise of that

Court’s discretion on attorney fees on

the ground that the City was the

prevailing party on the Huffman issue.

See Appendix 4, at pages 16 et seq.:

_CONCLUSION

“Appellant City of Henderson

is of the view that this Court's

three judge panel opinion, reported

in 8 F.3d, at 1348-1353, is

eminently correct in so far as it

has applied the Huffman abstention

doctrine to the narrow trial facts

which were before the United States

District Court.

“The City of Henderson in this

regard, however, makes these

further contentions:

“ek3 The Court's opinion

would have greater value to other

federal appellate courts and

litigants were it to more _ fully

elaborate upon what it meant at

page 1350, when it referred to The

considerations relied upon in

Huffman.” Did the Court mean, as

the City of Henderson concluded,

that the United States Supreme

Court fashioned the Huffman rule

(as to civil litigants) for the

guidance of federal district courts

so as to require them to abstain or

require “heightened pleadings

where the pleadings show a strong

aZim

probability that the assumption of

federal jurisdiction would lead to

the type of Tenth and Eleventh

Amendment infringement of state

powers which occurred herein, as

corroborated by the United State

District Court’s finding of fraud,

retrospectively applied?

“£22 The cases cited by

Nevada Entertainment and the Amicus

Curiae do not affect this Court’s

opinion in as much as they are not

apposite in this Huffman-type

appeal which is controlled by an

extremely narrow set of facts.

Further, their analyses are

defective in their apparent failure

to weigh in the balance “the

considerations relied upon in

Huffman.” The City of Henderson is

of the further view that were this

Court’s opinion to be expanded to

include an elaboration of its

language “The considerations relied

upon in Huffman,” this Court’s

opinion would materially alter’ the

manner in which the Huffman

Doctrine is app'ied in those cases.

It would appear, however, that if

such opinion is not expanded, a

substantial federal question will

be raised which may require

resolution by the United States

Supreme Court.

"(3) Finally, the City is of

the opinion that this Court's

opinion requires a remand to the

trial court for the exercise of the

district court’s discretion on the

question of attorney’s fees, in the

light of the entire record

(including this Court’s opinion

that the trial court erred in that

the Huffman Doctrine should have

been applied), and the City of

~~ =

Henderson's claim that,

notwithstanding Nevada

Entertainment’s attorneys had both

subjective and objective knowledge

from existing case law that’ the

narrow facts of record established

a clear case for application of the

Doctrine, they,

nevertheless, recklessly continued

such Litigation by remaining silent

and refusing to address the City's

arguments on the jurisdictional

aspects.

After conference on the plaintiffs

expansive obfuscating arguments, which

drew in issue its affect on decisions by

other panels, the en banc court denied a

hearing -- but only after the Ninth

Circuit review panel withdrew its

opinion!

The City of Henderson, Nevada,

contends in its petition for mandamus

and writ of certiorari that the Huffman

Court never intended or contemplated

that Huffman would be applied in such a

manner on these facts.

The City’s position is clear: once

the Huffman doctrine is properly raised

by state government as a defense to a

ee Ne eT ee

ee a ee ee ee

-29-

civil federal civil rights complaint

requesting an injunction against a

pending state quasi-judicial proceeding

under 42 U.S.C. Section 1983 (which

seeks to limit the ‘power’ of the state

judiciary to act in areas which

traditionally were barred by the

anti-injunction statute and the Tenth

and Eleventh Amendments) the _ federal

Court under Huffman is required to

determine whether a conflict does and/or

may result and if there is, to require

the civil rights plaintiffs to amend

their complaint for iniunction and, by

heightened pleadings, make an additional

showing of “extraordinary circumstances’

if they intend to state a federal cause

of action for an injunction under’ the

Civil Rights Act 42 U.S.C. Section 1983.

-30-

1983 on the record below -- a different

or heightened pleading is required.

In Stanley vy. University of So.

Cai., 13 £.3@ 1313;° 1389 CAS; 2996),

the Court described the standard equity

test for an injunction in the Ninth

Circuit as follows:

In Martin v. Internationai

Qlympic Committee, 740 F.2d 670

(9th Cir. 1984), we described the

legal standard a district court

must apply in exercising its

discretion:

r ‘In this circuit, a party

seeking preliminary injunctive

relief must meet one of two tests.

Under the first, a court may issue

a preliminary injunction if it

finds that:

"(1) the [moving party] will

suffer irreparable injury if

injunctive relief is not

granted, (2) the {moving

party] will probably prevail

on the merits, (3) in

balancing the equities, the

{non-moving party] will not be

harmed more than [the moving

party! is helped by the

injunction, and (4) granting the

injunction is in the _ public

interest.

"Alternatively, a court

may issue a preliminary

injunction if the moving party

demonstrates either a

combination of probable

success on the merits and the

-31- i

possibility of irreparable

injury or that serious

questions are raised and the

balance of hardships tips

Sharply in his favor. Under

this last part of the

alternative test, even if the

balance of hardships tips

decidedly in favor of the

moving party, it must be shown

as an irreducible minimum that

there is a fair chance of

success on the merits. There

is one additional factor we

must weigh. In cases such as

the one before us in which a

party seeks mandatory

preliminary relief that goes

well beyond maintaining the

status quo ite.

courts should be extremely

cautious about issuing a

preliminary injunction. ’

“Id. at 674-75 (internal quotations

and citations omitted) (emphasis in

original).

Coach Stanley argues that. she

did not seek a mandatory

preliminary injunction. She

asserts that she was ‘not seeking

to be instated by USC, she was

seeking to continue her employment

with USC.’ Appellant’s Opening

Brief at 28. Coach Stanley

maintains that’ she requested a

prohibitory preliminary injunction

and that the district court erred

in applying the test for a

mandatory preliminary injunction.

An analysis of Nevada Entertain-

ment's civil rights lawsuit pursuant to

42 U.S.C. Section 1983 is made Simple by

-32-

the fact that it was a simple equity

complaint for aniiniunction -- it did

not allege any claim for damages. The

issuance of a preliminary injunction

under this ‘standard’ test articulated

in Stanley was clearly error. The City

contends that this potential error,

which is easily avoided at the outset,

should and must be corrected by a

written opinion in this case. Not to do

so only invites further bad decisions by

other Courts in Huffman abstention

cases.

The form of the complaint is’ such

-- for an injunction -- that if a right

to an injunction did not exist under the

law, the complaint would have to be dis-

missed for failure to state a cause of

action; that is, the federal court in

that instance did not have ‘subject

matter jurisdiction for such an adjudi-

cation. Jurisdiction of the person

(i.e. the City of Henderson, acting for

~33<-

the state) does not occur until after

subject matter jurisdiction has been

correctly determined. See the discus-

sion on subject matter jurisdiction,’

in Jurisdiction in Civil Actions, Robert

through 1-5, and in 1988 Supp. at S 1-2:

“The concept of subject matter

jurisdiction was discussed at some

length in Florida Power & Light Co.

vy. Canal Authority of

Uorida.

[footnote omitted].

"{Tlhe court must have what

could be called potential or

inchoate jurisdiction but what

is more commonly and properly

called ‘jurisdiction of the

subject matter.” This is

jurisdiction in the abstract

and is that sovereign

authority, conferred upon a

court by constitution, either

directly or by authorized

statute, to make ad judica-

tions, or binding decisions,

as to controversies within a

certain class of cases or

causes. Such subject matter

jurisdiction must be properly

invoked and perfected. A

court's jurisdiction is

generally invoked ina _ given

case by a party filing a

proper pleading which alleges

material facts demonstrating

ca the existence of a

judicial controversy (a right

in dispute between two or more

parties) within the subject matter

jurisdiction of the court....After

tl t iuriadicti ,

process on al] indispensible

parties. This is... called

“ jurisdiction over

{footnote

omitted. ]’” (Our Emphasis. )

One certain way for this Court to

correct this problem in the future is to

grant this petition for writ of

certiorari under Rule 11, with a view to

amend and amplify the Huffman abstention

doctrine by holding that the lower court

erred, and requiring in the future that

where Huffman is pleaded as a defense

that federal plaintiffs must amend their

pleading (by formal heightened

pleadings) under 42 U.S.C. Section 1983

to “allege™ the extraordinary

circumstances which will ‘prove’ that

“subject matter jurisdiction is

present, to avoid the procedural error

in this case. The burden of proof in

such case is on the federal plaintiff

-35-

and was not carried in this case.

The statutory basis and authority

for filing the Complaint for Injunctien

(42 U.S.C. Section 1983) is important

Court noted in Mitchum v. Foster, 407

U.S. 225, at 231-232 (1972):

“The anti-injunction statute

goes back to the beginnings of our

history as ae nation. In 1973

Congress enacted a law providing

that ‘no’ writ of injunction be

granted (by any federal court) to

stay proceedings in any court of a

state.”

The relief which Nevada Entertainment

sought flew in the face of the

Anti-Injunction Statute of 1793 and the

Eleventh Amemdment [which was enacted 5

years later to correct the United States

Supreme Court's 1793 ruling in Chisholm

v. George, 2 U.S. (2 Dall.) 449 (1793)].

See Redish, Federal Jurisdiction (1980):

~-36-

“Tensions in the Allocation of Judicial

Power, Cnapter £9 “The dAati Iajvectian

Statute at page 259-290; and Chapter

11, Our Federalism at pages 291-321;

and Chapter 6, “State Sovereignty,

Immunity and the Eleventh Amendment’ at

pages 139-140; Section II, Construction

of the Eleventh Amendment: Alternative

Theories, setting forth various meaning

asserted to the Eleventh Amendment at

pages 141-154; and Section III, #£=The

Doctrine of Ex parte Young at pages

154-159.

The two statutes, 42 U.S.C. Section

1983 and the anti-injunction statute

(see 1948 revision at 28 U.S.C. Section

2283) are (silently) at odds with each

other in the cross-appeal which is

before this Court for resolution.

Justice Kennedy's short definition in

the City of Tempe case (supra) brings

into focus the concepts discussed in

Redish’s treatise. Although the

-37-

decision in Mitchum v. Foster, 401 U.S.

225 (June 19, 1972), specifically held

that the civil rights statute was

enacted by Congress as an exception to

the anti-injunction stetute, that

decision only heated up the controversy,

in as much as the Court in Mitchum

pointed out a special caveat (which

applies to the Nevada situation which is

before the Court) at page 242:

“Section 1983 was thus a

product of a vast transformation

from the concepts of federalism

that had prevailed in the late 18th

century when the anti-injunction

statute was enacted. The very

purpose of section 1983 was to

interpose the federal courts

between the States and the people,

as guardians of the people's

federal rights -- to protect the

people from unconstitutional action

under color of state law, ‘whether

that action be executive, legisla-

tive or judicial.’

Virginia, 100 U.S. at 346, 25 L.Ed.

at 679. In carrying out that

purpose, Congress plainly author-

ized the federal courts to issue

injunctions in section 1983

actions, by expressly authorizing a

"suit in equity’ as one of the

means of redress. And this Court

long ago recognized that federal

ni t i lief inet tat

court proceeding can in

circumstances be cea te

prevent great, immediate, and

tituti : rey

Young, 209 U.S. 123, 52 L.Ed. 714,

28 S.Ct. 441; cf. Irpuax v. Raich,

239 U.S. 33, 60 L.Ed. 131, 36 S.Ct.

7; Dombrowski v. Pfister, 380 U.S.

479, 14 L.Ed.2d 22, 85 S.Ct. 1116.

For these reasons we conclude that,

under the criteria established in

our previous decisions construing

the anti-injunction statute,

section 1983 is an Act of Congress

that falls within the ‘expressly

authorized’ exception of that law.

a state court proceeding. These

principles, in the context of state

criminal prosecutions, were

canvassed at length last Term in

Younger vy. Harris, 401 U.S. 37, 27

L.Ed.2d 669, 91 S.Ct. 746, and its

companion cases. They are

principles that have been

emphasized by this Court many times

in the past. _Fenner yv. Boykin,

271 Us. 240) FO. Qieee.: 3 Cae. - 46

S.Ct. 492; Spielman Motor Sales Co.

vy, Dodge, 295 U.S. 89. 79 L.Ed.

1322, 55 S.Ct. 67863 Beal vy.

Missouri Pac. R. Co., 312 U.S. 45,

85 L.Ed. 577, 61 S.Ct. 418; Watson

vy. mueok, 313 U.S. 367, 66 L.Ed.

1416, 61 S.Ct. 962, 136 ALR 1426;

Williams v. Miller, 317 U.S 599, 87

L.Ed. 489, 63 S.Ct. 258; Douglas v.

City of Jeannette, 319 U.S. 157, 87

L.Ed. 1324, 63 S.Ct. 877;

Stefanelli v. Minard, 342 U.S. 117,

poe

é39~

96 L.Ed. 138, 72 S.Ct. 118; Cameron

vy. Johnson, 390 U.S. 611, 20 L.Ed.

2G i824;:. 86 °3.Ct. 1335. Today we

decide only that the District Court

in this case was in error in

holding that, because of the

anti-injunction statute, it was

absolutely without power in this

section 1983 action to enjoin a

proceeding pending in a state court

under any circumstances whatsoever.

“The judgment is reversed and

the case is remanded to the

District Court for further

proceedings consistent with this

opinion.

“It is so ordered.

“Mr. Justice Powell and Mr.

Justice Rehnquist took no part in

the consideration or decision of

this case. (Our Emphasis. )

The construction given the federal cause

of action (by a 4-3 majority) was

predicated upon the fiction of Ex parte

Young, 209 U.S. 123 which assumed that

the particular government officer [in

that case the Attorney General of

Minnesota] was acting ultra vires. In

the Young case, however, the United

States Supreme Court also noted that:

“It is further objected (and

the objection really forms part of

the contention that the state

cannot be sued) that a court of

equity has no jurisdiction to

fe,

o40-

enjoin criminal proceedings, by

indictment or otherwise, under’ the

state law. This, as a general

rule, is true. But there are

exceptions. When such indictment

or proceeding is brought to enforce

an alleged unconstitutional

statute, which is the subject

matter of inquiry in a suit already

pending in a Federal court, the

lat! 7 rirst obtai '

jurisdiction over the

» iect<maté ; 7 ght

Two principles flowing from the

above holdings in Mitchum v. Foster and

Ex parte Young mu3t be noted which are

important to Petitioners’ cross-appeal:

FIRST if, contrary to that which has

been assumed under 42 U.S.C. Section

1983, the fact is shown that the Ex

parte Young fiction is untrue, and the

acts taken by Petitioners were not ultra

vires; then the federal cause of action

ee ee ee ee ee ae een eT ee eee

-41-

for an injunction clearly does not lie.

Further, as noted above, the federal

court cannot interfere where the

proceedings are already pending in the

state court: the Younger and Huffman

doctrines are addressed as caveats in

Mitchum v. Foster and applicable as

exceptions to the general 42 U.S.C.

Section 1983 rules of law.

It is and has been the City’s

contention for the four years of this

litigation that a correct reading of the

law expressed in Mitchum v. Foster,

makes it eminently clear that as to. the

City’s cross-appeal:

(1) for a federal judgment that

Huffman abstention clearly does apply to

this case;

(2) that the federal court did not

have subject ma.ter iurisdiction under

Ex parte Young and Mitchum v. Foster;

(3) that the injunction was

unlawfully imposed in violation of the

«42<

Eleventh Amendment;

(4) that the City Council was

wrongfully enjoined and is entitled to

damages; and

(5) that the cross-appeal is not

moot.

REASONS FOR GRANTING THE WRIT OF

MANDAMUS (OR CERTIORARI UNDER RULE ii)

The federal complaint and proof

adduced below is clearly an unconstitu-

tional collateral attack on an

enforceable Nevada state ruling. See

Huffman v. Pursue, Ltd., 420 U.S. 592 at

612. Although it is and was argued that

the federal plaintiffs’ claim of free

speech protection provides the

“extraordinary circumstances,

Plaintiff ded ( hat

t of that a3) Rion.

Unless federal plaintiffs are

required to allege (by heightened

pleadings) the nature of the

~43-

“extraordinary circumstances and prove

those allegations, cases will rarely be

properly adjudicated.

At the time they filed their

federal complaint, Plaintiffs’ knew, as

to any state court action and their

pleading and proof, they would be

concluded by the City of Las Vegas case

[Las Vegas v. Nevada Entertainment.

ing... 772 P.2d 1275 (Nev.S.Ct., 1989)).

To avoid that result, they fraudulently

brought this federal action as a

collateral attack on the rule

established in City of Las Vegas.

Huffman is an absolute bar, especially

here, where there was a pending state

proceeding. To hold otherwise would

instruct all litigants on “how to thumb

their noses at the Eleventh Amendment

and avoid the rule of law expressed _ in

Huffman.

THE CITY OF HENDERSON’S

CHALLENGE BEFORE THE FEDERAL COURT

INVOKED FOUR BASIC JURISDICTIONAL

PRINCIPLES OF LAW WHICH ARE NEVER

WAIVED.

The City of Henderson et al.'s

_Huffman challenged before the federal

court invoked four basic jurisdictional

principles of law which are never

waived:

(1) lack of federal (subject

matter) jurisdiction;

(2) failure to state a claim

(“subject matter ) upon which relief can

be based;

(3) state sovereignty - police

power (Tenth Amendment); and

(4) right to be sued only in state

court (Eleventh Amendment) ;

All four principles were violated by the

Court of Appeals’ decision of May 4,

1994. The federal plaintiffs have the

burden of proof and must plead and prove

the Huffman exception for federal

~45-

(subject matter) jurisdiction.

This court should resolve the issue

of how to measure the federal

plaintiffs’ burden of proof under

Huffman v. Pursue, Ltd. 420 U.S. 592 to

meet the jurisdictional requirement of

pie ext r )

both great and immediate. — At a

minimum, before subjecting federal civil

rights defendants to atrial under’ the

instant circumstances, the federal court

must first find, under its “jurisdiction

to determine jurisdiction function, the

requisite ‘extraordinary circumstances

where the danger of irreparable loss is

both great and immediate, pursuant’ to

this Court’s ruling in Huffman v.

Pursue, -Ltd., supra at 612, as

authoritatively construed by this Court

the previous year in Pennzoil Co. v.

Texaco, Inc., 481 U.S. 1 at 14-17

(1985).

-46-

Further, federal jurisdiction in

such cases is dependent upon the

“fiction created in Ex Parte Young that

the Attorney-General or state agent

(here a municipality) is violating the

constitution and, thus, the lawsuit is

against a private individual rather than

against the state in violation of the

Eleventh Amendment. When the _ federal

court entered its judgment that the City

of Henderson had acted properly in

revoking federal plaintiffs’ business

license (for fraud) [and thus, the state

administrative action could not be

invalidated based upon any’ showing of

federal constitutional violations], the

“Piction” — 7 y

federal court was exhausted. At that

point, the federal court was under the

constraints imposed by the Tenth and

Eleventh Amendments and had no power to

“stay its lack of jurisdiction and was

-47-

required to dismiss the lawsuit.

THE JURISDICTION ISSUE WAS NOT MOOT

The Court of Appeals in its May 4,

1994 Memorandum incorrectely held that

in light of its disposition of the case

(on the merits), the Huffman jurisdic-

tional issue would be an “advisory

opinion and had therefore become

“moot.” Under Huffman, the Court of

Appeals can never get to the issue of

the merits. It is elementary that’ the

issue of whether the Court had subject

1 iuriadicti ) ) 7 it

must be decided first, before the court

acts in relation to the merits. This

question does not become “moot” simply

because the federal court feels that,

for some unexplained reason, it would

rather get to the merits and dismiss the

case on that basis. As noted above at

pages 33-34, in relation to the explana-

tion of subject matter jurisdiction

-48-

found in Florida Power & Light Co., 423

So.2d 421 (Fla.Dist.Ct.App. 1982), supra

at page 33, once the Court of Appeals

decided the fundamental Huffman issue as

to subject matter jurisdiction, that

is, that the federal court did not have

subject matter jurisdiction because of

the Eleventh Amendment, the ‘person of

the State of Nevada and the City of

Henderson et al. was. no longer before

the federal court.

III

THE COURT OF APPEALS SHOULD BE ORDERED

TO WITHDRAW ITS MAY 4, 1994 MEMORANDUM

AS A DECISION WHICH IS ULTRA VIRES,

BEING IN EXCESS OF THE COURT'S

“SUBJECT MATTER JURISDICTION. ©

The Court of Appeals should be

ordered to withdraw to withdraw its May

4, 1994 Memorandum as a decision which

is ultra vires, being in excess of the

Court’s ‘subject matter jurisdiction’™

for the following reasons: (1) Having

made findings of fact and conclusions of

law in its Opinion and entered its

Judgment on November 2, 1994 pursuant to

ee ee

-49-

the Federal Rules of Appellate

Procedure, Rule 36, that Huffman v.

Pursue, Ltd. abstention does apply, the

Court of Appeals exhausted its

jurisdiction, and by operation of law

and the principles of law expressed by

Chief Justice Rhenquist in Huffman v.

Pursue, Ltd. 420 U.S. 592 at 612-613,

and the Federal Rules of Appellate

Procedure, Rule 36, has_ ousted the

federal court system, including itself,

of subject matter jurisdiction (the

“person of the City of Henderson,

acting for the State of Nevada, is. no

longer properly before the federal

court) and, the Court thereafter, lacked

the “power to rule further in relation

to the defective pleading; (2) Nevada

action pursuant to 42 U.S.C. Section

1983 and is fatally defective in its

failure to allege and prove by

-50-

“heightened pleadings the requisite

extraordinary circumstances which would

cure the defect and take the case

outside the Huffman rule re subject

matter jurisdiction); (3) the fact

that the Court on April 7, 1994,

attempted to withdraw its November 2,

1993 findings of fact and conclusions of

law, and Judgment, without expressing

the reason therefore, is_ immaterial.

The Court’s April 7th action is also

“ultra vires for the same reason and

the November 2, 1993 findings of fact

and conclusions of law, and judgment

entered on that date, remain

uncontroverted (the ‘person’ of the City

of Henderson et al. acting for the State

of Nevada was no longer properly before

the federal court on April 7, 1994).

Compare the acts of the Minnesota

Attorney General in Ex parte Young, 209

U.S. 123 (1908).

-51i-

THE COURT OF APPEALS SHOULD BE ORDERED

TO REINSTATE ITS NOVEMBER 2, 1993

OPINION.

The Court of Appeals should be

ordered to reinstate its November 2,

1994 opinion (which was certified as

suitable for publication) and judgment

entered thereon on November 2, 1993

pursuant to the Federal Rules of

Appellate Procedure, Rule 36, and

arbitrarily withdrawn om April 7, 1994

(without any explanation of the reasons

for such withdrawal and their refusal to

address the City’s jurisdictional

challenge which is validated by Justice

Kennedy's dissent). That Opinion and

Judgment holds that Huffman v. Pursue.

Ltd. abstention is controlling precedent

under the three part test established by

the United States Supreme Court.

«82-

THE COURT OF APPZALS SHOULD BE ORDERED

TO AMEND ITS NOVEMBER 2, 1993 OPINION

TO CONFORM TO THE LAW IN THE AJIONA,

CITY OF TEMPE, AND OTHER NINTH CIRCUIT

CASES.

The Court of Appeals should be

ordered to amend its November 2, 1993

opinion to incorporate the additional

= Ninth Ci it Cc )

Appeal in Aiona v. Ihe Judiciary of the

State of Hawaii, 17 F.3d 1994 at 1248

and i250, fn. 10, decided four months

later (March 3, 1994) which provides’ an

answer to the ‘lack of jurisdiction’

issue raised by the City in its

cross-appeal, which issue was not

discussed in the Court’s November 2,

1993 opinion, and as to which the Court

announced at oral argument on May 10,

1993 that it did not want to hear

argumentation thereon, namely: “a

district court must dismiss the federal

action ... and there is no discretion to

grant injunctive relief because, for

-53-

the reasons stated in the Rooker-Feldman

doctrine, and as noted by Associate

Justice Kennedy in his concurring

opinion in the City of Tempe case,

supra, at page 1081, the federal court

(both the U.S. District Court and the

Court of Appeals) “su

ae teitabien” 4 bee Cate 6 .

we ererrc me Trey rg —r

therefore, the ‘person of the City of

Henderson et al. acting for the State of

Nevada is not properly before the

federal court) in either ongoing

quasi-judicial proceedings (Huffman) or

by collaterally attacking final state

judgments (Rooker-Feldman, infra).

THE COURT OF APPEALS SHOULD BE ORDERED

TO VACATE ITS MAY 4, 1994 MEMORANDUM

DECISION AND ITS CONCOMITANT ORDER

THAT ITS MEMORANDUM DECISION MAY NOT

BE CITED.

The Court of Appeals should be

ordered to vacate its May 4, 1994

Memorandum decision, and its concomitant

- Aten PAO

-54-

order that such May 4, 1994 decision may

not be cited as precedent, on the ground

that such federal] court rulings are

arbitrary and capricious and in deroga-

tion of the fundamentai common law

principles which underlie the determina-

tion of: “precedent, the judicial

construction and interpretation which

must be given to the First, Tenth,

Eleventh and Fourteenth Amendments’ to

the U.S. Consvitution; and the

settlement of the many raging legal

controversies (including the ‘lack of

jurisdiction controversy in the City’s

cross-appeal) which daily confront’ the

three members of this Court and the 35

other judges now sitting on the en Banc

Ninth Circuit Court of Appeals.

The publication and filing of the

May 4, 1994 Memorandum decision isan

ultra vires act which is in excess of

the Court of Appeals’ subject matter

jurisdiction and in derogation of the

~- $5.

‘subject matter jurisdiction” Rule of

Law established by the United States

Supreme Court in its Huf fman-

Middlesex abstention doctrine, infra,

and the long standing Rooker-Feldman

doctrine. The Court of Appeals

lelil ) view of the: ite” of ti

Hend City Cc UL’ +o» judicial

this (late) stage of the litigation and

long after the injunction (harm) and

constitutional wrong had been inflicted,

for an ulterior motive, such as avoiding

the need to address the jurisdiction

Rul P tes lated 1 t United

a] _

Middlesex abstention which is the

central issue in four years of

litigation and the primary issue before

the Court of Appeals on the City’s

cross-appeal, flies in the face of, and

stands as a mockery of the

afin

applies, because the ‘person of the

City of Henderson et al. acting for the

State of Nevada is no longer properly

before the federal court.

The May 4, 1994 Memorandum

Decision, in refusing to address the

: juniadinttion. ite ite

direct conflict with the decisions of

other Ninth Circuit judges in Huffman

abstention cases; who have experienced

no such reluctance in articulating the

“lack of jurisdiction concept. {See

World F Drink E ' ss at

of Tempe, 820 F.2d 1079 at 1081 (CA 3,

1989) (Kennedy concurring opinion):

o$7-

KENNEDY, Circuit Judge, concurring:

"g ipl -"

Emphasis. )

v 7 Sudici rt) Stat

hawaii, 17 F.3d 1244 (Poole, Wiggins,

T.G. Nelson) at 1248:

mF these three circumstances

exist, then ‘a district court must

dismiss the federal action

[and] there is no discretion to

iat... Core,,, 605 F.2d set 1356

(citing Colorado River Water

Conservation Dist. ov. United

States, 424 U.S. 800, 816 n. 22, 96

S.46. (4000; 22466, 47. &.24.24 463

(1976)).° (Our Emphasis. )

eT ae ee

One 27-2 vee > Bt+-3200; fas" 10: (CA 9, :

1994):

doctrine applies. See MacKay v.

Pfeil, 827 F.2d 540, 543-45 (9th

-~58-

Cir. 1987). (Our Emphasis. )

F “Ere 7 Lc ) ; x a

al Labor Relations Board, 805 F.2d 1353

(Schroeder and Fletcher, U.S. Circuit

Judges; Rosenblatt, U.S. Dist. Court

Judge), at 1356, fn. 2 (CA 9, 1986):

.Although the abuse of

discretion standard may be

appropriate for other forms of

abstention because they involve the

discretionary exercise of a court's

equity powers, [citations omitted],

application of the Younger

abstention doctrine is absolute.

Because a district court has no

discretion to issue iniunctive

relief in the Younger context,

District v. United States, 424 U.S.

at 816 n. 22, 96 S.Ct. at 1246 n.

22, the abuse of discretion stand-

ard is inappropriate. (Our

Enphasis. )

Partington v. Gedan, 880 F.2d at 116, at

129 (CA 9, 1989):

... such an attack on State ov.

Clarke implicates the Rooker-

Feldman doctrine forbidding lower

federal courts to sit in direct

review of state court judgments.

See District of Columbia Court of

Appeals v. Feldman, 460 U.S. 462,

482-86, 103 S.Ct. 1303, 1314-16, 75

L.Ed.2d 206 (1983); Booker Vv.

Eidelity Trust Co., 263 U.S. 413,

415-16, 44 S.Ct. 149, 150, 68 L.Ed.

-$9-

362 (1923); see also MacKay v.

Pieil, 627: ¥. 20d 840, $43-46 (9th

Cir. 1987) (per curiam); Worldwide

ir, 805 F.2d

Church of God v. McNair

888, 890-93 (9th Cir. 1986)

(Worldwide Church of God).

Partington v. Gedan, 961 F.2d 852, at

864 (CA 9, 1992):

"4. Claims 2 & 7.”

“The district court dismissed

Claim 2 and Claim 7 on the ground

that it had iurisdictj

the Rooker-Feldman doctrine and the

Eleventh Amendment to grant the

relief requested. (Our Emphasis. )

.... although the plaintiff ‘ |

could challenge the i

constitutionality of the

state-court rule in federal aL,

p? So (oe)

163 3. Cs. wt 1317 (emphasis added);

accord Rooker v. Fidelity Trust

Co... 263 U.S. 413, 415-16, 44 S.Ct.

149)... 460, 66° 1. Bé. 262 43982).

Under the “Rooker-Feldman

doctrine, review of state court

decision may only be conducted in

the United States Supreme Court.

Lower federal courts may not review

such decisions.” (Our Emphasis. )

-60-

VII

THE COURT OF APPEALS SHOULD BE ORDERED

TO REMAND THE CASE TO THE UNITED

STATES DISTRICT COURT FOR A HEARING ON

THE INJUNCTION BOND AND DAMAGES TO THE

CITY BY VIRTUE OF THE WRONGFUL

INJUNCTION AND THE CITY’S RIGHT AS THE

PREVAILING DEFENDANT ON THE HUFFMAN

ABSTENTION DOCTRINE TO AN ATTORNEY FEE

UNDER 42 U.S.C. SECTION 1988 ON THE

GROUND THAT THE FILING WAS IN BAD

FAITH, FRIVOLOUS, UNREASONABLE AND

WITHOUT FOUNDATION.

The Court of Appeal should be

ordered to remand the case to the U.S.

District Court for:

(a) a further hearing on the

$20,000 injunction indemnification bond

and the damages to the City of Henderson

arising out of the Eleventh Amendment

injury and wrongful injunction of fcur

years duration [see Nintendo of

, ' I Lowi Gallo! Ic

Inc., 16 F.3d 1032 at 1036 (CA 9, Feb.

17, 1994)] which has prevented the City

from enforcing the City Council’s

quasi-judicial law enforcement Order

which revoked Nevada Entertainment's

right to operate in the City of

-61-

Henderson as an adult business; and

(b) a determination as to whether

the City of Henderson is entitled to an

award of an attorney fee at trial and on

appeal under 42 U.S.C. Section 1988, as

the prevailing defendant on the

Huffman-Middlesex abstention dectrine

issue under the test proscribed in

Hughes v. Rowe, 448 U.S. 5, 14, 101

S.Ct. 173, 178, 66 L.Ed.2d 163 at 198

(per curiam) and the City’s claims that

Nevada Entertainment filed the 42 U.S.C.

objective “bad faith, as _ those

terms are used in determining

attorney fees under the Common Law

rule and 42 U.S.C. Section 1988;

(2) with a fraudulent intent,

) void Vv Lenin! 7

Nevada Supreme Court which was

certain to result in ae state appeal

from the City Council's

quasi-judicial finding of “fraud”

under the prevailing state

law precedent which considered the

identical problem in the fraudulent

procurement of a business license

issued pursuant to Nevada state law

in City of Las Vegas Vv. Nevada

Industries, inc... 772 P. 2d 1275

(Nev. S.Ct. 1989); and

(3) with the full knowledge of its

attorneys, who had ta substantial

U.S. Supreme Court precedents in Huffman

vy. Pursue, Ltd., supra, Middlesex Ethics

Commission v, Garden State Bar Exam, 457

U.S. 423, 432 (1982), Ohio Civil Rights

eT ee ee en ee

Pee ee en

Inc., 477 U.S. 619 (1986), and New

Council of New Orleans, 491 U.S. 350,

369 (1989), and Ninth Circuit cases

(World Famous Drinking Emporium v. City

of Tempe, 820 F.2d 1079 at 1081 (CA 9,

1989) (Kennedy concurring opinion);

¥ v7 ludici the Stat ;

Hawaii, 17 F.3d 1244 at 1248 and 1250,

fn. 10 (CA 9, 1994); Eresh International

Corp. v. Agricultural Labor Relations

Board, 805 ¥.2d at 1353, at 1356, fn. 2

(CA 9, 1986); Partington v. Gedan, 880

F.2d -Ot 2346,:° 8662428 [CCR Og | 89892:

Partington v. Gedan, 961 F.2d 852, at

864 (CA 9, 1992)], and their decision to

file t) vil tobte lemeuit t)

federal court rather than in the state

=64<

for the purpose of ‘testing the waters,”

and was frivvlous, unreasonable, and

without foundation as those terms are

used in 42 U.S.C. Section 1988.

Further, federal plaintiffs, Nevada

Entertainment Industries, Inc. et al.,

are well aware of the fact that had they

prevailed in the Civil Rights’ lawsuit

(42 U.S.C. Section 1983), they would, as

the prevailing plaintiff, have been

entitled to, and would have been awarded

an attorney fee, and, must be held to

have assumed the mutual risk of paying

attorneys fees to the City in this case

elie s ful electi to fil t)

fed Lain | their fai} )

. the j hich t) United °

States Supreme Court had previously

decided against them. The erroneous

Claim of amicus curiae, speaking on

behalf of federal plaintiffs, that

footnote 4 in New Orleans Public

inl abe Noein eal: ements. cee sesh sadn s

P hitb as, ate

-65-

491 U.S. 350, at 369, 109 S.Ct. 2506

(1989) made the Dayton case ‘dictum’ is

shicl 7 b) r

this case so that such misconception may

be put to rest.

CONCLUSION

The petition for oy writ of

mandamus, or writ o* certiorari under

Rule 11, should be granted.

Dated: June 2, 1994

Respectfully submitted,

; ncy

oor 7 as Tg

For /Petitioners

APPENDIX 1

DECISION OF THE UNITED STATES

DISTRICT COURT FOR THE DISTRICT OF

NEVADA IN NEVADA ENTERTAINMENT

INDUSTRIES, INC... ET AL. v. CITY OF

HENDERSON, ET AL., NO. CV-90-00264-

LDG (LRL), ENTERED NOVEMBER 27,

1992.

{Reference: Petition at page

ae fee a OR a

l=-1

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

NEVADA ENTERTAINMENT ) CV-S-90-264-LDG

INDUSTRIES, INC., et ) (LRL)

ais )

Plaintiffs,) DECISION

)

Vv. ) { ENTERED

> . oe 27,: 4992

CITY OF HENDERSON, ) €Cyerk, Wek

et al., ) Dist. of Nevada

Defendants.) By Deputy ]

)

The parties have submitted this

matter for trial oon the briefs.

Plaintiffs seek a declaratory judgment

that certain ordinances of the City of

Henderson are unconstitutional and seek

to enjoin enforcement of tie

ordinances.

Facts

On April 4, 1989, the City of

Henderson enacted anew Zoning Code.

Among its provisions, the Zoning Code

limited the operation of adult

businesses to a newly defined

Commercial-Highway ("CH") zone. In

implementing the Zoning Code, the City

roughly adapted its old zoning map but

failed to create any CH zones.

Further, the City failed to designate

any CH zones until it adopted a new

zoning map on December 4, 1989.

In the interim, plaintiffs applied

for a business license to operate an

adult business. In response to this

application, plaintiffs were informed

that an adult business could only be

operated in aCH zone, that no CH zone

existed, that they would have to obtain

a zone change or variance, and that

they would have to obtain a conditional

use permit. Plaintiffs were also

informed that, until they had met these

conditions, their business license

would not be authorized.

Plaintiffs' subsequently filed a

new application for a license to

operate a general business, omitting

any reference to the adult nature of

the business. The City approved this

second application in September. On

February 1, 1990, plaintiffs opened an

adult business. The City immediately

commenced a revocation proceeding. In

April, the City found that plaintiffs

misrepresented the nature of their

business on the application and revoked

the license. Plaintiffs brought this

action to stay the revocation, arguing

that the various city ordinances are

unconstitutional.

Lack of Jurisdiction

As an initial matter, the court

notes that, contrary to the arguments

of the City, the Younger abstention

doctrine does not divest this court of

jurisdiction. This doctrine "anes not

arise from lack of jurisdiction in the

District Court, but from strong ~

policies counseling against the

exercise of such jurisdiction where

particular kinds of state proceedings

have already been commenced." Ohio

1-4

Civ. Rights Com'n v. Dayton Christian

Schools, 477 U.S. 619, 626 (1986). The

issue properly raised by Younger

abstention is not whether this court

lacks jurisdiction, but whether it

should abstain from exercising its

jurisdiction.

Abstention

This court is mindful of the

principle that "abstention from the

exercise of federal jurisdiction is the

exception, not the rule." Colorado

River Water Conservation District Vv.

United States, 424 U.S. 800, 813

(1976). Federal courts are especially

reluctant to abstain when First

Amendment issues are involved. Baggett

Vv. Bullitt, 377 U.S. 360, 379 .(1964);

Playtime Theaters, Inc. v. City of

Renton, 748 F.2d 527, 532 (9th Cir.

1984), rev'd on other grounds, 475 U.S.

14 (1986).

Previously, the City argued that

its action for declaratory judgment,

brought in State court, compelled

abstention. The City brought its state

court suit four months after this court

had entered a preliminary injunction in

this federal action. "Younger

abstention is required, however, only

when state court proceedings are

initiated 'before any proceedings of

Substance on the merits have taken

place.' Hicks v. Miranda, [422 U.S.

332, 349 §(1975))}. In other cases,

federal courts must normally fulfill

their duty to adjudicate federal

questions properly brought before

them." Hawaii Housing Authority v.

Midkiff, 467 U.S. 229, 238 (1984).

This court affirms its prior ruling

that the state court proceeding brought

by the City did not compel abstention.

The City now argues that

abstention is compelled by the City

Council hearing and decision which

revoked plaintiffs' business license.

This revocation proceeding, the City

asserts, remains pending for Younger

purposes. The City argues that

"[s}tate proceedings...for which the

state offers statutory appellate review

through its courts or otherwise, are

pending for Younger purposes from the

time it is [sic] initiated, until it

has [sic] completed the review

process."

This court is not persuaded that

the revocation proceedings remain

pending for purposes of abstention.

Not only must the state offer judicial

review, but this review must permit

review of the constitutional issues

raised by the proceeding. The vitai

consideration guiding a determination

of Younger abstention is comity: the

federal government's proper respect for

legitimate activities of state

government. Huffman v. Pursue, Ltd.,

__—_—_—__—$*“_+_aeee

1-7

420 U.S. 592, 601 (1975).

Abstention accords the state

judiciary the opportunity to oversee

constitutional issues arising in

litigation over which it has

jurisdiction. Id., 420 U.S. at 609.

Thus, *<¢ is sufficient...that

constitutional claims may be raised in

state-court judicial review of the

administrative proceeding." Ohio Civ.

Rights Com'n Vv. Dayton Christian

Schools, 477 U.S. 619, 629 (1986).

Conversely, a proceeding which does not

permit judicial review of

constitutional claims is insufficient

to compel abstention.

Although the City provides for

judicial review of City Council

determinations, this review is

extremely limited. Pursuant to

Henderson Municipal Code (-E.8.¢.*)}

Section 4.06.160, decisions of the City

Council regarding business licenses may

be appealed to the state district

court. This appeal is limited to a

"Judicial review of questions of law."

This limited review is further narrowed

to "the specific rulings on questions

of law which the petition contends

constitutes error." H.M.C. Section

4.06.160(a). Under this provision,

petitioners can only appeal those

questions of law for which the City

Council has made a specific ruling. By

not ruling ona constitutional issue,

the City Council can preclude judicial

review of that constitutional claim.

This is exemplified by the present

case. Plaintiffs attempted to raise

constitutional issues at the revocation

hearing, although the City Council did

not address any of these issues. At

one point, Mayor Kesterson stated "I'm

not trying the Constitution here and

don't want to go into all that. We have

a set case here that we are trying to

1-9

follow." Verbatim Transcript of License

Revocation Hearing Held Before the City

Council of Henderson ("V.T."), at 88

(April 10, 1990). Later, in apparent

reference to the constitutional issues

raised, Councilmember Williams remarked,

"I really think that as far as we are

concerned, some of [the] things that

have been brought up are not in our

prerogative to decide." V.T. at 244.

The City's order revoking

plaintiffs' license reflects Mayor

Kesterson's assertion that

constitutional issues would not be

decided. The specific rulings are

expressly limited to believability of

witnesses, the adult nature of the

plaintiffs' business, andthe finding

that plaintiffs' misrepresented the

nature of the business in obtaining a

license. Since the City failed to make

specific rulings on plaintiffs'

constitutional questions, plaintiffs

1-10

are precluded from seeking judicial

review of their constitutional claims.

The lack of opportunity for plaintiffs'

to pursue judicial review of

constitutional claims indicates that the

City Council hearing was not a pending

state action for purposes of Younger

abstention. Accordingly, because a

state action was not pending when

substantial proceedings occurred in this

federal action, abstention is

inappropriate.

Plaintiffs' Constitutional Challenge

Plaintiffs argue that the various

provisions of the Henderson Municipal

Code, as they existed when plaintiffs

applied for a business license, were

unconstitutional. Without any support,

The Court is disturbed by the

failure of both parties to cite any

authority on the fundamental and

critical issue of whether plaintiffs'

(Footnote Continued)

iii Se

plaintiffs contend that, since the

regulatory scheme was invalid, the

statements they made on their license

application are immaterial. This court

disagrees.

Until the City Council hearing,

plaintiffs had not sought to challenge

the constitutionality of the provisions

of the Henderson Municipal Code.

(Footnote Continued)

fraudulent application precluded a

constitutional challenge of the

underlying law. Plaintiffs contend the

fraudulent statements are immaterial,

but fail to offer any argument, or law,

distinguishing the contrary controlling

law.

Equally distressing, however, is

that the City's counsel failed to

properly identify the issue or to cite

the readily available controlling law.

At most, counsel made an unnecessarily

circuitous argument that the fraudulent

application precluded a federal

challenge because "none of [the]

ordinances were given an opportunity to

be construed by the City and state

court judiciary." This cursory

argument is not only incorrect, but it

ignores the opinions of the Supreme

Court holding that plaintiffs cannot

raise any constitutional challenge of a

law that they have attempted to avoid

by deception.

1-12

Rather, they attempted to circumvent the

City's Code by filing 4 second,

misleading application. A plaintiff may

challenge a regulatory scheme without

first submitting to the unconstitutional

law. Shuttlesworth v. Birmingham, 394

U.S. 147, 151 (1969); Fernandes Vv.

Limmer, 663 F.2d 619, 625 (5th Cir.

1981). However, a plaintiff may not

invoke the process of the court tio

obtain a ruling on an issue that he

practiced deception to avoid.

‘When one undertakes to .. .

mislead [government officials] by

false statements, he has no

standing to assert that the

operations of the Government in

which the effort to ... mislead

is made are without constitutional

sanction.'

Acanfora v. Board of Educ., 491 F.2d

498 (4th Cir. 1974), citing Kay v.

United States, 303 U.S. 1, 6 (1938).

In Dennis v. United States, 384 U.S.

855 (1966), the Court reiterated that a

plaintiff who practices a course of

fraud and falsehood inan attempt to

circumvent a law, may not challenge the

eee ere ere

1-13

constitutionality of the law when the

deception is discovered. Whether a

provision is constitutional or not is

legally irrelevant to the validity of a

finding that deception was used to

avoid application of the law. Bryson

v. United States, 396 U.S. 64, 68

(1969).

Tn the present case, plaintffs

attempted to circumvent the City's Code

by following a course of deception.

Initially, plaintiffs applied for a

business license for an adult business.

The City then informed the plaintiffs

of certain conditions that an adult

business had to meet before a_ license

would be authorized. In response to

this information, plaintiffs did not

seek judicial protection from the

City's provisions. Nor did they

attempt to meet the conditions for

obtaining a license for an adult

business. Nor did plaintiffs challenge

1-14

the law by opening and operating an

adult business without obtaining any

license.

Rather, plaintiffs inquired

whether a business license would be

approved for a general business. The

City responded that such an application

for a general business would be

approved. Plaintiffs, fully aware that

a license for a general business would

be approved whereaS an application for

an adult business would be rejected,

submitted a second application which

specifically omitted any reference to

an adult business. This second

application was approved and, on

February 1, 1990, plaintiffs opened an

adult business. The City then revoked

the plaintiffs' business license,

finding that plaintiffs had

misrepresented the nature of the

business on the license application in

order to obtain a license. As

a em th

1-15

permitted by H.M.C. section 4.04.150,

the Council revoked plaintiffs' license

for making a false or fraudulent

statement in the application for a

license.

It is evident that plaintiffs

attempted to avoid the City's zoning

and licensing regulations through

deception. Accordingly, plaintiffs

cannot attack the revocation of their

license, which was based upon the

discovery of their deception, by

challenging the constitutionality of

the underlying law.

This decision shall constitute the

findings of fact and conclusions of

law. Judgment will be entered

accordingly.

DATED this 25th day of November, 1992.

LLOYD D. GEORGE

United States District Judge

1-16

TOR OO ION EEL ENE LL LILI G EL Te

1-17

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

NEVADA ENTERTAINMENT ) CV-S-90-264-LDG

INDUSTRIES, INC., et ) (LRL)

oe )

Plaintiffs,) JUDGMENT

Vv. [f ENTERED

NOV. 27, 1992

CITY OF HENDERSON, Clerk, U.S.

Dist. of Nevada

By Deputy ]

et al.,

Defendants.

ee ee ee eee ee ee

Judgment is hereby entered in

favor of Defendants City of Henderson

and James Goff, Chief of Police of the

City of Henderson, and against

Plaintiffs Nevada Entertainment

Industries, Inc., and Daniel Bishop.

The preliminary injunction entered by

this court on June 5, 1990, is lifted.

Pursuant to 42 U.S.C. Section 1988, the

court may, in its discretion, award

attorney's fees to the prevailing

party. It is the court's determination

that, although Defendants prevailed,

their defense does not warrant an award

of attorney's fees. Pursuant to Local

1-18

Rule 205, Defendants shall file a bill

of costs and disbursements with the

clerk.

DATED this 25th day of November 1992.

LLOYD D. GEORGE

United States District Judge

Creo PN, Waa ea RN

APPENDIX 2

ORDER OF THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT IN

NEVADA ENTERTAINMENT INDUSTRIES,

ee eres SCF 92- 17054 [DC #

CV-90-00264-LDG Nevada (Las

Vegas)}], FILED DECEMBER 22, 1992.

[Reference: Petition at page

Tal eye

(Filed Dec. 22, 1992;

Catterson, Clerk,

Court of Appeals]

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NEVADA ENTERTAINMENT No. 92-17054

INDUSTRIES, INC., a

Nevada corporation, DC # CV-90-00264-

et al., LDG Nevada (Las

Vegas)

Plaintiffs-

Appellants, ORDER

CITY OF HENDERSON, a

Nevada municipal

corporation, et al.,

Defendants-

)

Vs. )

)

Appellees. )

)

Before: NOONAN and T.G. NELSON,

Circuit Judges

Appellees’ motion to dismiss’ the

appeal for lack of jurisdiction is

denied. Appellants’ emergency motion

for an injunction pending appeal is

granted. The district court’s November

25, 1992 order is stayed and the

district court's June 5, 1990

preliminary injunction against appellees

2-2

shall remain in effect pending

disposition of this appeal.

The appeal shall be expedited as

follows. Appellants shall secure the

filing of the certificate of record by

January 11, 1993. Appellants’ opening

brief is due January 25, 1993.

Appellees’ response brief is due

February 22, 1993. Appellants’ optional

reply brief, if any, is due March 1,

1993.

Absent extraordinary circumstances,

no extensions of time for filing of the

briefs will be entertained by the court.

All subsequent filings in this matter

shall be served on the court and on all

parties by hand delivery or by overnight

delivery service. The Clerk shall set

this matter for argument in San

Francisco during the week of April 12,

1993.

MoCal 12/21/92

espe

APPENDIX 3

OPINION OF THE UNITED STATES COURT

OF APPEALS FOR THE NINTH CIRCUIT IN

NEVADA ENTERTAINMENT INDUSTRIES.

INC.. ET AL. v. CITY OF HENDERSON,

ET AL., NO. 92-17054/ 93-15052 [DC

z CV-90-00264-LDG Nevada (Las

Vegas)], FILED NOVEMBER 2, 1993.

{[Reference: Petition at page

2.6, BO 36, Oke Ski.

eo ORR MEE Ee ©

3-1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NEVADA ENTERTAINMENT

InpusTries, INc., a Nevada

Corporation; Dante. BisHop,

Plaintiffs-Appellants-Cross- Nos. 92-17054

Appellees, 93-15052

v. . D.C. No.

Crry or HeNperson, a Nevada CV-90-00264-

Municipal Corporation; James LDG

Gorr, Chief of Police and the City OPINION

of Henderson,

Defendants-Appellees-Cross-

Appellants.

Appeal from the United States District Court

for the District of Nevada

Lloyd D. George, District Judge, Presiding

Argued and Submitted

May 10, 1993—San Francisco, California

Filed November 2, 1993

Before: James R. Browning and William C. Canby, Jr.,

Circuit Judges, Robert J. Kelleher,* Senior District Judge.

Per Curiam

*The Honorable Robert J. Kelleher, Senior Judge, United States District

Court for the Central District of California, sitting by designation.

12299

3-2

12300 NevaDA ENTERTAINMENT V. Crry OF HENDERSON

SUMMARY

Civil Litigation and

Procedure! Jurisdiction/Administrative Law

The court of appeals reversed a district court decision and

remanded. The court held that the district court was required

to abstain from exercising jurisdiction over a plaintiff's claim

challenging the constitutionality of a zoning ordinance when

the plaintiff had not sought review in state court of a City

Council order revoking its business license.

Appellant Nevada Entertainment Industries, Inc. applied for

a license to operate an adult video store in Henderson,

Nevada. Appellee City of Henderson’s zoning ordinance lim-

ited such businesses to certain zones, of which it contained

none. After Nevada Entertainment applied for and was issued

a license to operate a general video store, it opened an adult

video store. The City commenced a proceeding to revoke

Nevada Entertainment’s license. The City Council issued an

order revoking the license.

Rather than appealing the order to the state district court,

Nevada Entertainment filed suit in federal court, challenging

the constitutionality of the city’s zoning ordinances. The City

argued that the district court was required to abstain under

Younger v. Harris, 401 U.S. 37 (1971), which requires absten- .

tion when state proceedings, judicial in nature, (1) are pend-

ing, (2) involve important state interests, and (3) afford an

adequate opportunity to raise the constitutional issue. The dis-

trict court rejected the abstention claim, but granted judgment

for the City. Nevada Entertainment appealed. The City

cross-appealed the court's refusal to abstain.

[1] The considerations relied upon by the Supreme Court in

an earlier case, supporting the requirement that state appellate

review of a state court judgment be exhausted before federal

court intervention is permitted, apply equally to state judicial

3-3

NevaDA ENTERTAINMENT V. Crry oF HENDERSON 12301

review of the decision in a state administrative proceeding,

which is judicial in nature. [2] Moreover, it is consistent with

Younger for a federal court to abstain from intervening where

an administrative proceeding has been initiated by the state to

enforce state law even if those proceedings have concluded,

when adequate state judicial review was available to the fed-

eral plaintiff. Because the administrative proceeding in this

case was coercive and brought by the state to enforce its laws,

Younger required the federal court to abstain from intervening

unless and until that proceeding, including review by the state

court, was complete. Since Nevada Entertainment did not pur-

sue its appellate remedy, the proceeding remained pending,

for Younger purposes, at the time of the federal suit.

COUNSEL

Roger Jon Diamond, Santa Monica, California, for the

plaintiffs-appellants-cross-appellees.

James J. Clancy, Sun Valley, California, for the defendants-

appellees-cross-appellants.

OPINION

PER CURIAM:

Nevada Entertainment applied for a license to operate an

adult video store in the City of Henderson, Nevada. Shortly

before Nevada Entertainment filed its application, the City

adopted a zoning code limiting adult businesses to Commer-

cial Highway (“CH”) zones. The City had no CH zones when

the new code was adopted. The City told Nevada Entertain-

ment it could operate an adult business only in a CH zone,

and since no such zone existed, Nevada Entertainment would

have to apply for a zone change or variance as well as a con-

3-4

12302 #NeVADA ENTERTAINMENT V. CrTy OF HENDERSON

ditional use permit. Instead, Nevada Entertainment filed a

new license application for a general rather than an adult

video store. The City issued a license to operate a general

video store. Nevada Entertainment opened an adult video

store.

The City commenced a proceeding before the City Council

to revoke Nevada Entertainment’s license because Nevada

Entertainment misrepresented the nature of the business it

intended to open. The City Council issued an order revoking

the license. Rather than appealing this order to the state dis-

trict court, Nevada Entertainment filed this action in federal

court challenging the constitutionality of the zoning ordi-

nances and seeking injunctive relief.

The City argued the district court was required to abstain

under Younger v. Harris, 401 U.S. 37 (1971). The district

court rejected the absiention claim but granted judgment for

the City on the ground Nevada Entertainment was barred

from challenging the constitutionality of the zoning ordi-

nances because it had obtained its license by fraud. Nevada

Entertainment appealed. The City cross-appealed the court’s

refusal to abstain. We conclude the district court was required

to abstain under Younger.

ABSTENTION

We consider de novo whether Younger abstention was

required. World Famous Drinking Emporium v. City of

Tempe, 820 F.2d 1079, 1081 (9th Cir. 1987). Younger

abstention is required when: (1) state proceedings, judicial in

nature, are pending; (2) the state proceedings involve impor-

tant state interests; and (3) the state proceedings afford ade-

quate opportunity to raise the constitutional issue. Middlesex

Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 432

(1982). Where Younger abstention is applicable, “ ‘a district

court must dismiss the federal action.”” World Famous

Drinking Emporium, 820 F.2d at 1081 (quoting Fresh Inter-

UNE A: DEGAS. stat Gites inches te We a ats Ae hl. accede eM gmM 8 ner ala ce tis aS Diath

3-5

NEVADA ENTERTAINMENT V. Crry OF HENDERSON 12303

national Corp. v. Agricultural Labor Relations Bd., 805 F.2d

1353, 1356 (9th Cir. 1986)).

1. Pending State Court Proceedings

When Nevada Entertainment filed this action, the adminis-

trative proceeding before the City Council revoking Nevada

Entertainment’s license was complete. Nevada Entertainment

had ten days within which to appeal the Council’s order to the

Nevada district court. It did not do so, but instead filed this

suit under 42 U.S.C. § 1983 challenging the constitutionality

of the city’s ordinance and seeking injunctive relief. The issue

is whether a state administrative proceeding of a kind subject

to Younger is pending within the meaning of Younger when

the administrative process has been concluded but judicial

review in state court is available.

Ordinarily, when judgment has been entered for the state in

a state trial court proceeding to which Younger applies, “a

party may not procure federal intervention by terminating the

State judicial process prematurely — forgoing the state appeal

to attack the trial court’s judgment in federal court.” New

Orleans Pub. Serv., Inc. (“NOPSI” } v. City Council of New

Orleans, 491 U.S. 350, 369 (1989) (citing Huffman v. Pursue,

Lid., 420 U.S. 592, 608 (1975)). As the Court said in

Huffman, federal intervention “is likely to be even more dis-

ruptive and offensive [at this point] because the State has

already won a nisi prius determination that its valid policies

are being violated in a fashion which justifies judicial

abatement.” 420 U.S. at 608-09.

Huffman, however, involved failure of the federal plaintiff

to appeal a lower court judgment rather than failure to seek

judicial review of an order entered in a state administrative

proceeding. Younger plainly applies to state administrative

proceedings, which are judicial in nature, Middlesex, 457 U.S.

at 432-34, as was the license revocation proceeding involved

in this case, but the Supreme Court has not expressly held that

3-6

12304 NEVADA ENTERTAINMENT V. Crry OF HENDERSON

Huffman applies if the federal plaintiff has foregone available

State court judicial review of the decision in an administrative

proceeding.

The holding in Ohio Civil Rights Commission v. Dayton

Christian Schools, Inc., 477 U.S. 619 (1986), and dicta in

NOPSI strongly suggest that a state administrative proceeding

and state judicial review of that proceeding are a single uni-

tary process for Younger purposes and federal court interven-

tion cannot be obtained without first exhausting the state court

appellate remedy. In Dayton Christian Schools, Dayton

sought to enjoin a state administrative proceeding brought

against it to enforce the state’s anti-discrimination laws. The

issue was whether Dayton could raise its Free Exercise and

Establishment Clause claim in the administrative proceeding.

The Supreme Court concluded appellant probably could raise

its constitutional claim before the Ohio Civil Rights Commis-

sion, but held that even if Ohio law precluded the Commis-

sion from considering such claims, “it is sufficient ... that

constitutional claims may be raised in state-court judicial

review of the administrative proceeding.” /d. at 629. Since

under this holding Younger applies to a pending administra-

tive proceeding even though constitutional claims cannot be

raised until state court review, there is no reasoned basis for

holding that litigants in such proceedings may forego state

court review of the administrative decision in favor of a fed-

eral lawsuit.

In NOPSI, the Court assumed, without deciding, that

Dayton Christian Schools requires the state administrative

proceedings and judicial review of such proceedings be

treated as a unitary process that is not to be interrupted by fed-

eral court intervention, any more “at the conclusion of the

administrative stage than during it.” NOPSI, 491 U.S. at 369.

The Court noted “[t}he fact that Dayton Christian Schools

relied, as an alternative argument, upon the fact that the fed-

eral challenge could be made upon appeal to the state courts,

... Suggests, perhaps, that an administrative proceeding to

a a AIS RE OS AE td nas ie ale Bsa et

3-7

NEVADA ENTERTAINMENT Vv. CiTy oF HENDERSON 12305

which Younger applies cannot be challenged in federal court

even after the administrative action has become final.” Id. at

n.4.'

[1] The considerations relied upon in Huffman to support

the requirement that state appellate review of a state court

judgment be exhausted before federal court intervention is

permitted apply equally to state judicial review of the decision

in a state administrative proceeding, which is judicial in

nature.

Dayton Christian Schools rejected the suggestion that

requiring a litigant, asserting violation of constitutional rights,

to pursue judicial review of a state administrative proceeding

as a precondition to federal court intervention under 42 U.S.C.

§ 1983 is inconsistent with the holding in Patsy v. Florida Bd.

of Regents, 457 U.S. 496 (1982), that § 1983 plaintiffs need

not exhaust state administrative remedies. The Court said:

The application of the Younger principle to pending

State administrative proceedings is fully consistent

with Patsy ..., which holds that litigants need not

exhaust their administrative remedies prior to bring-

ing a § 1983 suit in federal court. Cf. Huffman v.

Pursue, Ltd., 420 U.S. 592, 607-11 (1975). Unlike

Patsy, the administrative proceedings here are coer-

cive rather than remedial, began before any substan-

tial advancement in the federal action took place,

and involve an important state interest.

Dayton Christian Schools, 477 U.S. at 628 n.2. See also

Patsy, 457 U.S. at 518-19 (White J., concurring) (the holding

in Patsy is “fully consistent with [the] decisions that a defen-

dant in a civil or administrative enforcement proceeding may

"The Court did not decide the question, concluding instead Younger did

not apply because the administrative proceeding at issue in NOPSI was

legislative rather than judicial in nature. Id. at 369-370.

3-8

12306 NEVADA ENTERTAINMENT V. Crry oF HENDERSON

not enjoin and sidetrack that proceeding by resorting to a

§ 1983 action in federal court”) (citing Huffman).

The crucial distinction between Dayton Christian Schools

and Patsy is that in Patsy the administrative proceeding was

a remedial action instituted by plaintiff to redress a wrong

inflicted by the state, while Dayton Christian Schools

involved an administrative proceeding initiated by the state to

enforce a violation of state law.? As the Seventh Circuit has

pointed out, the latter situation invokes primary reasons for

Younger abstention:

[Younger’s] central meaning is that a federal district

court may not, save in exceptional circumstances,

enjoin, at the behest of a person who has actually or

arguably violated a state statute, a state court pro-

ceeding to enforce the statute against that person.

(internal citation omitted). His remedy is to interpose

his federal claims as a defense in that action.

The state normally is entitled to prosecute or other-

wise proceed against the violators of its laws in its

own courts without interruption by a federal district

court. But the principle [that a § 1983 plaintiff may

*Courts of Appeals of four circuits have considered the problem with

varying results. See Alleghany Corp. v. Pomeroy, 898 F.2d 1314 (8th Cir.

1990) (Younger abstention requires litigant to seek available state court

review of administrative proceedings); Thomas v. Texas State Bd. of Medi-

cal Examiners, 807 F.2d 453 (Sth Cir. 1987) (no state court proceeding

pending if administrative proceeding is concluded, even if state court

review of constitutional claims is available); Alleghany Corp. v. Haase,

896 F.2d 1046 (7th Cir. 1990) (Younger requires a litigant to seek state

court review of an administrative proceeding if the administrative pro-

ceeding was brought by the state to enforce a violation of state law),

vacated as moot, 499 U.S. 933 (1991); Kercado-Melendez v. Aponie-

Roque, 829 F.2d 255 (ist Cir. 1987) (same).

ae samt site

3-9

NEVADA ENTERTAINMENT V. Crry OF HENDERSON 12307

initiate remedial action to enjoin unconstitutional

State official conduct] stands unimpaired in cases in

which the federal plaintiff has not violated state law,

has not exposed himself to a state enforcement pro-

ceeding, is not a defendant in such a proceeding, but

merely seeks to sweep away an illegal obstacle to his

activities.

Alleghany Corp. v. Haase, 896 F.2d 1046, 1050-51 (7th Cir.

1990), vacated as moot, 111 S. Ct. 1383 (1991).

[2] In cases such as Dayton Christian Schools, it is the state

administrative proceeding itself that plaintiffs seek to chal-

lenge. “Comity and federalism concerns are at their highest in

such cases since the legitimacy of both the state proceeding

and its underlying statutory predicate are at stake.” Kercado-

Melendez v. Aponte-Roque, 829 F.2d 255, 260 (1st Cir. 1987).°

It is consistent with both Younger and Patsy for a federal

court to abstain from intervening where an administrative pro-

ceeding has been initiated by the state to enforce state law

even if those proceedings have concluded, where adequate

State judicial review was available to the federal plaintiff. The

City Council initiated the administrative proceeding in this

case to enforce municipal code provisions requiring license

applicants to complete applications truthfully. Because the

administrative proceeding was coercive and brought by the

state to enforce its laws, Younger required the federal court to

abstain from intervening unless and until that proceeding,

including review by the state court, was complete. Since

Nevada Entertainment did not pursue its appellate remedy, the

*In Kercado-Melendez, the First Circuit, like the Seventh Circuit in

Haase, held abstention was not required under Younger where the state

administrative proceeding was a remedial action initiated by the federal

plaintiff. However, in Kercado-Melendez, the administrative action was

initiated by the state in response to an alleged violation of its laws. See

829 F.2d at 267-68 (Breyer, J., dissenting). We express no view on this

precise situation.

3-10

12308 NEVADA ENTERTAINMENT V. Crry oF HENDERSON

proceeding remained pending, for Younger purposes, at the

time of the federal suit.‘

2. Opportunity to Raise the Constitutional Claims

Nevada Entertainment attempted to raise its constitutional

claims in the revocation hearing, but the City Council refused

to listen.’ Whether the federal claim could have been raised

in the administrative proceeding is of no moment, however,

if it could have been raised in subsequent state court judicial

review. Dayton Christian Schools, 477 U.S. at 629.

The relevant provisions of the Henderson Municipal Code

are set out in the margin.* The district court held that under

the Code the state court could review only “the specific rul-

ings on questions of law which the petition contends consti-

tutes error,” and that, by refusing to rule on Nevada

Entertainment’s constitutional claims, the City Council could

and did preclude state court review of these claims (quoting

H.M.C. § 4.06.160(a)). When read in full, however, the sen-

tence in subsection (a) upon which the district court relied

“Nevada Entertainment cites only City of Cincinnati v. Discovery Net-

work, Inc., 113 $.Ct. 1505 (1993), in support of its contention that a fed-

eral plaintiff need not exhaust available state judicial review of a state

administrative order before seeking injunctive intervention under § 1983.

There is nothing in City of Cincinnati to indicate abstention wa. sought or

whether the requirements for abstention were present.

*The Mayor stated: “I’m not trying the Constitution here and don’t want

to go into all that. We have a set case here that we are trying to decide.”

*§ 4.06.160 of the Henderson Municipal Code reads:

Any person aggrieved by a final decision or order of the City

Council made after hearing or rehearing as heretofore provided,

and whether or not a petition for rehearing was filed, may obtain

a judicial review of questions of law thereof in the Eighth Judi-

cial District Court.

(a) .... The petition for review shall set forth the order or deci-

sion appealed from, and shall set forth the specific rulings on

questions of law which the petition contends constitutes error.

oad i "

12 ate ena.

3-11

NEVADA ENTERTAINMENT V. Crry oF HENDERSON 12309

does not qualify the general grant of authority to review all

questions of law found in the opening sentences of the provi-

sion; it simply directs the petitioner to set forth in his petition

the rulings he appeals. Nothing in the Code precludes a peti-

tioner from claiming that a “specific ruling” of the City Coun-

cil “constitutes error” because it violates the Constitution,

even if the City Council refused to address that question. We

conclude the Municipal Code provided appellant ar: adequate

opportunity to raise its federal claim on review in state district

court.

3. Important State Interest

The state has an important interest in enforcing licensing

schemes such as that at issue here. See World Famous Drink-

ing Emporium, 820 F.2d at 1082-83. More significantly, the

“importance of the state interest may be demonstrated by the

fact that the noncriminal proceedings bear a close relationship

to proceedings criminal in nature, as in Huffman,” Middlesex,

457 U.S. at 432; and we add, as in this case.

ATTORNEYS FEES

The City argues it should have been awarded attorneys fees

under 42 U.S.C. § 1988. Prevailing defendants in civil rights

actions are awarded attomeys fees only in “exceptional

cases.” Mitchell v. Los Angeles Community College Dist., 861

F.2d 198, 202 (9th Cir. 1988). See also Hughs v. Rowe, 449

U.S. 5, 14 (1980) (district court has discretion to award attor-

neys fees to a prevailing defendant under § 1988 where “the

plaintiff's action ... is groundless or without foundation”).

The district court did not abuse its discretion in concluding

this was not such a case. Nor do the circumstances justify an

award of fees on appeal.

CONCLUSION

The decision of the district court refusing to abstain from

exercising jurisdiction is REVERSED and the case is

3-12

12310 NEVADA ENTERTAINMENT V. Crry OF HENDERSON

REMANDED to the district court with instructions to vacate

its judgment and dismiss the complaint.

PRINTED FOR |

ADMINISTRATIVE OFFICE—U.S. COURTS

BY BARCLAYS / ELECTROGRAPHIC—SAN FRANCISCO—{415) 588-1155 }

The summary, which does not constitute a part of the opinion of the court, is copyrighted }

APPENDIX 4

RESPONSE TO PETITION FOR REHEARING

AND SUGGESTION FOR REHEARING EN

BANC IN NEVADA ENTERTAINMENT

INDUSTRIES, INC., ET AL. v. CITY OF

HENDERSON, ET AL., NO. 92- 17054

[DC # CV-90-00264-LDG Nevada (Las

Vegas)], FILED JANUARY 18, 1994.

{[Reference: Petition at page

19 and 26).

4-1

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 92-17054

No. 93-15052

NEVADA ENTERTAINMENT

INDUSTRIES, INC.,

a Nevada corporation

and DANIEL BISHOP {DISTRICT COURT

NO. CV-S-90-264

Plaintiffs & LDG-LRL |]

Appellants

Vs.

CITY OF HENDERSON, a

Nevada Municipal

Corporation, JAMES

GOFF, CHIEF OF

POLICE OF THE CITY

OF HENDERSON,

Defendants &

Appellees

ll i i i i ee oe ee oe oe

APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEVADA,

HON. LLOYD D. GEORGE, DISTRICT JUDGE

RESPONSE JO PETITION FOR REHEARING AND

SUGGESTION FOR REHEARING EN BANC

JAMES J. CLANCY (State Bar. No. 26946)

CAROL A. CLANCY (State Bar No. 065453)

9055 La Tuna Canyon Road

Sun Valley, California

(818) 352-2069

Attorneys for Defendants/Appellees

and Cross-Appellants

pp Me ss a) Re ee ee i

RESPONSE TO PETITION FOR REHEARING AND

SUGGESTION FOR A REHEARING EN BANC....

ek Sl) eT rer rear rT ee eae ee ee ee ee

4-4

TABLE OF AUTHORITIES

PAGE

FEDERAL CASES

Ex Parte Young,

Bie ae ee ee ree ee ee 5

Huffman v. Pursue, Ltd.,

420 U.S. 592 (1975)...... . sh Se

Louisiana v. Jumel ’

107 GU... Fad CEES) sc ccc ctscaevasenss 3

N i ake i pedieaties I

v. City of Henderson,

New Orleans Public Service v.

i ee ee. } Pere °F

Watson v. Buck,

tS S Se eS he eee ere oar 6

rere . |

Fo TE OE TINE HEE ET

City,

QFS U.S. 178 CIFSS Pc ccc ees s ceca ssaagas 6

STATE CASES

Las Vegas v. Nevada Entertainment. Inc.

772 FP. 2G i275 (Hev.&.Ct., 1989)......4. 3

CONSTITUTIONAL PROVISIONS

United States Constitution

Poe ie. | 2, 8

Eleventh Amendment....... Zz, @ * &

FEDERAL STATUTES

4a U. 2.0. Bere Bee 6 bok eee wk eae es §

4-5

UNITED STATES COUR? OF APPEALS

FOR THE NINTH CIRCUIT

No. 92-17054

No. 93-15052

NEVADA ENTERTAINMENT

INDUSTRIES, INC.,

a Nevada corporation

and DANIEL BISHOP {DISTRICT COURT

NO. CV-S-90-264

Plaintiffs & LDG-LRL ]

Appellants

vs.

CITY OF HENDERSON, a

Nevada Municipal

Corporation, JAMES

GOFF, CHIEF OF

POLICE OF THE CITY

OF HENDERSON,

Defendants &

Appellees

Nee NN eee eee eee tee es a

Comes now the City of Henderson, a

Nevada Municipal Corporation and James

Goff, Chief of Police of the City of

Henderson (hereinafter “City of

Henderson ) to file its response to the

Petition of Nevada Entertainment

Industries, Inc., a Nevada Corporation

and Daniel Bishop (hereinafter “Nevada

4-6

Entertainment ) for Rehearing and

Suggestion for Rehearing en Banc, as

required by this Court’s Order, filed

December 27, 1993.

City of Henderson respectfully

invites this Court’s attention to the

fact that this Court, in its three judge

panel opinion on November 2, 1993, did

not deem it necessary to specifically

address the analytical argument re

“Huffman that the City of Henderson has

urged continuously in the past’ three

years of litigation and in its Opening

and Reply briefs and oral argument in

See Nevada Entertainment

Industries, Inc. v, City of Henderson, 8

F.3d 1348, at 1350 [ The consideration

relied upon in Huffman to support the

requirement that state appellate review

of a state court judgment be exhausted

before federal court intervention is

permitted apply equally to state

srry aa

judicial review of the decision if _a

heer"

4-7

this appeal. In such litigation, the

City has insisted that. from an

analytical standpoint, the abstention

doctrine expressed by the United States

Supreme Court in Huffman v. Pursue,

ae... 420° U8. ' 892 (involving a civil

public nuisance abatement lawsuit filed

by the State) was grounded in subiect

Eleventh Amendment to the Federal

Constitution, and that the United States

Supreme Court fashioned the Huffman rule

for the guidance of federal District

Courts and gs a precaution, to assure

that the federal system, under its civil

rights jurisdiction, would not interfere

in a civil case such as this license

revocation hearing brought by the City

of Henderson, acting for the State in

the State judicial system against a

resident where, to do so, might (in the

future) operate in a fashion which would

result in a Tenth or Eleventh Amendment

4-8

interference with and violation of State

Powers under the Federal Constitution.

See Appellees’ Opening and Answering

Briefs, at page 6, line 12 through page

7, line 26, and Reply Brief, at pag- 14,

line 19 through page 5, line 20.

In both briefs (see Opening Brief

at page 38, line 16 through page 40, and

Reply Brief at page 5, line 9 through

page 6, line 26), and at oral argument,

the City of Henderson argued that’ the

District Court’s fact findings on the

merits that Nevada Entertainment's

conduct was fraudulent acted

retrospectively to corroborate the

The District Court’s Findings

proved that the City Council’s actions

were pot ultra vires. It is hornbook

law that, under the Eleventh Amendment,

acitizen may pot sue the State in

federal court, and that he may do_ so

pursurnt to a 42 U.S.C. Section 1983

Civil rights lawsuit only if the State

is deemed to be acting “ultra vires.”

The City’s acts were not ultra vires.

(Footnote Continued)

4-9

City’s claims’ that: (1) Huffman did

control; and (2) the federal court's

assumption of jurisdiction over and

interference with a state matter was

wrongful; and (3) the State of Nevada

and the City of Henderson, acting for

the State (which had the right to assert

the Constitutional bar of the Eleventh

Amendment, since the relief sought in

the federal action would require City

officials, as officers of the state, to

act contrary to the positive orders of

the supreme political power of the

State, whose creatures they are _ [see

Louisiana v. Jumel, 107 U.S. 711, at 721

(Footnote Continued)

Under Nevada law, cities are empowered

to act for the State, and are authorized

to issue business licenses within the

City and to revoke the same as_ to

fraudulent applications, where such are

found to be fraudulent by the City

Council, sitting as a quasi judicial

fact finder in the state judicial

system. See Cj

City of Las Vegas v. Nevada

Entertainment, Inc., 772 P.2d 1275 (Nev.

S.Ct., 1989). (Our Emphasis. )

4-10

(1883)], has suffered an actual Eleventh

Amendment injury for the past three

years, which, in no way, could be

compensated for by any monetary award

from Nevada Entertainment.

Because this Court, in its November

Zi 1993 opinion, did not find it

necessary to address’ the City of

Henderson's analysis as to the ‘lack of

jurisdiction basis of Huffman, Nevada

Entertainment now seizes upon this

Court’s silence on that issue and makes

a pew and bolder claim as though lack

r juriadiction” ss t at t)

the Huffman abstention doctrine. They

now argue, in effect, that “Granted that

the City acted properly in revoking

Nevada Enterprises license for fraud in

connection with its application, it is

really of no moment that the City of

Henderson has suffered an Eleventh

amendment infringement by virtue of such

federal interference [an injunction

4-11

prohibiting enforcement of Nevada Law,

ac@i t operating a business without a

license is a misdemeanor. | Further,

Nevada Entertainment is again renewing

its efforts to scuttle the Huffman rule

by conceding the finality of the fact

finding by the City Council in an effort

to bring themselves within the

unexplored parameters of Footnote 4 of

ial Vj Vv

Council of New Orleans, 491 U.S. 350

(1989), in order to support its

contention that the remaining

allegations stated a good cause of

action for the District Court's

consideration. They now ask an en

banc’ Court to circumvent the Huffman

doctrine by ruling that the City of

Henderson has ‘consented to federal

jurisdiction -- in the face of: (1) the

City’s three year’s dogmatic stance to

the contrary, which entailed two trips

to the Court of Appeals and two trips to

4-12

the United States Supreme Court, and (2)

the City of Henderson's claim for

attorneys fees as a prevailing defendant

on the grounds that Nevada

Entertainment's federal lawsuit was

blatantly violative of the Huffman

Doctrine and notoriously improper

inasmuch as their attorneys were

experienced ‘adult business attorneys

who were well aware as to what the

United States Supreme Court intended by

its decision in Yiuffman and what was at

stake (1.e. the jurisdictional basis for

Huffman). For three years its attorney

have shrewdly remained silent, and

refused to carry out their duty to

provide the trial court with legal

research and rebuttal argument to the

City’s analysis re jurisdiction in the

City’s briefs.

In essence, Attorney Diamond is now

proposing that anen banc majority of

this Court should avoid the Huffman

4-13

abstention doctrine (which was correctly

applied by the three-judge panel) by

making a new and different finding that

the City “consented to federal

jurisdiction. Analytically, this new

and different claim by Nevada

Entertainment cannot be reconciled with

the record below which is before this

Court.

If the City of Henderson acted

within the scope of its authority in

conducting the license revocation

hearing and in revoking the license, as

Nevada Entertainment apparently is now

willing to acknowledge, then it must

necessarily follow that no federal cause

of action has been stated or can be

maintained because: (1) the City was

not involved in an ultra vires act and

(2) there was no Civil Rights’ violation

to support federal jurisdiction in that

the essential “Ex Parte Young [209 U.S

123 (1908)] allegation is lacking for

4-14

federal jurisdiction under 42 U.S.C.

Section 1983. It also follows therefrom

that, as suggested by Justice Kelleher

at oral argument, Nevada Entertainment

lacks standing to attack the remaining

statutes for a number of reasons:

First, it had not applied for the right

to operate a conditional use, alee

Further, those newly enacted ordinances

have not been given an initial

interpretation by the Nevada State

Court, and the federal court's

consideration of the same was barred by

Judicial review was premature,

presenting a ripeness’ problem, since

the federal plaintiffs had not obtained

any administrative decision, final or

otherwise, regarding the application of

the Ordinances in question to their

property. The question of whether

administrative remedies must be

exhausted is conceptually distinct from

the question whether an administrative

action must be final before it is

judicially reviewable, see Williamson

Hamilton Bank of Johnson City, 473 U.S.

172 (1985).

4-15

W Vv. » 913 U.S. 387 (1941).

See City of Henderson's Opening and

Answering Brief, at pages 3, 22, 28, 34,

and 36. Finally, an even greater (and

insurmountable) barrier is the federal

trial Court's express fact finding on

the merits that, as found by the City

Council, the Appellant was guilty of

fraud in its application for the

license, and was barred, by the ‘clean

hands doctrine from obtaining a

consideration as to the

Constitutionality of the other

ordinances in the federal system.

This sudden switch in argumentation

and willingness to stipulate that the

state license revocation proceedings,

together with the fact finding of fraud

had been finalized at the time Nevada

Entertainment filed their federal civil

rights lawsuit, is an attempt to bring

appellant Nevada Industries within the

parameters of footnote 4 of New Orleans

Orleans, 491 U.S. 350 (1989), in which

the High Court noted that it had not

spoken definitively on the application

of the Huffman abstention doctrine in

situations where the state

administrative proceedings had been

finalized at the time the federal

complaint was filed. If a unilateral

“stipulation such as this were to give

Nevada Entertainment standing to raise

the constitutional question discussed in

footnote 4, it also would lock Nevada

Entertainment ina bear trap of greater

consequences. No matter what an en banc

Court would decide as to the application

of Huffman to the narrow trial facts

which are of record and the res judicata

and/or collateral estoppel effect posed

by footnote 4 regarding the City

Council’ 8 revocation of license on

grounds of fraud, it must also consider

that part of the federal record below

4-17

which reflects that Assistant City

Attorney Liz Conroy, in opposing the

granting of the Temporary Restraining

Order on April 27, 1990, specifically

made the argument that Licensees were

not entitled to any type of equitable

relief under 42 U.S.C. Section 1983

because of the principle, “He who comes

into a court of equity must have clean

hands (see Appellees’ Answering Brief

at page 45), and the United States

District Court ultimately applied the

“clean hands doctrine and refused to

acknowledge standing in Nevada

Entertainment to consider the other

collateral issues framed in the Nevada

Entertainment federal lawsuit.

CONCLUSION

Appellant City of Henderson is of

the view that this Court’s three judge

panel opinion, reported in 8 F.3d, at

1348-1353, is eminently correct in so

4-18

far as it has applied the Huffman

abstention doctrine to the narrow trial

facts which were before the United

States District Court.

The City of Henderson in this

regard, however, makes these further

contentions: ‘“~

(1) The Court’s opinion would have

greater value to other federal appellate

courts and litigants were it to more

fully elaborate upon what it meant at

page 1350, when it referred to ‘The

considerations relied upon in Huffman. ™

Did the Court mean, as the City of

Henderson concluded, that the United

States Supreme Court fashioned the

Huffman rule (as to civil litigants) for

the guidance of federal district courts

so as to require them to abstain or

require ‘heightened pleadings’ where the

pleadings show a strong probability that

the assumption of federal jurisdiction

would lead to the type of Tenth and

al a tle he ai le al

4-19

Eleventh Amendment infringement of state

powers which occurred herein, as

corroborated by the United State

District Court's finding of fraud,

retrospectively applied?

(2) The cases cited by Nevada

Entertainment and the Amicus Curiae do

not affect this Court’s opinion in as

much as they are not apposite in this

Huffman-type appeal which is controlled

by an extremely narrow set of facts.

Further, their analyses are defective in

their apparent failure to weigh in the

balance “the considerations relied upon

in Huffman.” The City of Henderson is

of the further view that were this

Court’s opinion to be expanded to

include an elaboration of its language

“The considerations relied upon in

Huffman, this Court’s opinion wouid

materially alter the manner in which the

Huffman Doctrine is applied in those

cases. It would appear, however, that

4-20

if such opinion is not expanded, a

substantial federal question will be

raised which may require resolution by

the United States Supreme Court.

(3) Finally, the City is of the

opinion that this Court’s opinion

requires a remand to the trial court for

the exercise of the district court's

discretion on the question of attorney's

fees, in the light of the entire record

(including this Court’s opinion that the

trial court erred in that the Huffman

Doctrine should have been applied), and

the City of Henderson's claim that,

notwithstanding Nevada Entertainment's

attorneys had both subjective and

objective knowledge from existing case

law that the narrow facts of record

established a clear case for application

of the Huffman Doctrine, they,

neverthless, recklessly continued such

litigation by remaining silent and

4-21

refusing to address the City’s arguments

on the jurisdictional aspects.

Dated: January 16, 1994

Respectfully submitted,

James J. Clancy

For Defendants,

Appellees &

Cross-Appellants

ae PELTED IOSD KTR TTF NNT 22 romnommNe, Copenh Tem eT He “ PED « . 5 are Bae :

7 F VLRO ” * . ‘ “ 2 BN ATH ALP IEC NO

APPENDIX 5

ORDER OF THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT IN

NEVADA ENTERTAINMENT INDUSTRIES,

INC. , ET AL. v. CITY OF HENDERSON,

ET AL., NO. 92-17054/ 93-15052 [DC

# CV-90-00264-LDG Nevada (Las

Vegas)], FILED APRIL 7, 1994.

{[Reference: Petition at page

4, OOS, ae IST.

5-1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

‘

NEVADA ENTERTAINMENT

INDUSTRIES, INC., a Nevada

Corporation; DANIEL BisHop,

sce oe! ce Nos. 92-17054

ross-Appellees, 93-15052

V. D.C. No.

Crry oF HENDERSON, a Nevada CV-90-00264-LDG

Municipal Corporation; JAMEs ORDER

Gorr, Chief of Police and the City

of Henderson,

Defendants-Appellees-

Cross-Appellants.

Filed April 7, 1994

Before: James R. Browning and William C. Canby, Jr.,

Circuit Judges, and Robert J. Kelleher,* Senior District

Judge.

ORDER

The petition for rehearing is granted. The opinion reported

at 8 F.3d 1348 (9th Cir. 1993) is withdrawn.

*The Honorable Robert J. Kelleher, Senior Judge, United States District

Court for the Central District of California, sitting by designation.

3325

ee Lil ” i erry. a bial s ye a en SP Ce ee ees Te Ee ee ee ee we

APPENDIX 6

MEMORANDUM DECISION OF THE UNITED

STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT IN NEVADA

ENTERTAINMENT INDUSTRIES, INC... ET

AL. v. CITY OF HENDERSON, ET AL. ,

NO. 92- 17054 [DC # CV-90-00264-LDG

Nevada (Las Vegas)], FILED MAY 4,

1994.

[Reference: Petition at page

4, 6, 8, 19, 20, 48, and 53].

6-1

[Filed May 4, 1994; Cathy A.

Catterson, Clerk, U.S. Court

of Appeals]

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Nos. 92-17054

93-15052

NEVADA ENTERTAINMENT

INDUSTRIES, INC., a

Nevada corporation,

et al., D.C. No. CV-90-

00264-LDG

Plaintiffs/

Appellants/

Cross-Appellees,

CITY OF HENDERSON, a

Nevada Municipal

Corporation et al.

Defendants/

Appellees/

)

) MEMORANDUM#*#

)

Cross-Appellants. )

)

Appeal from the United States District

Court for the District of Nevada

Lioyd D. George, District Judge,

Presiding

Argued and Submitted May 10, 1993

*This disposition is not

appropriate for publication and may not

be cited to or by the courts of this

circuit except as provided by 9th Cir.

R. 36-3.

6-2

San Francisco, California

Before: BROWNING and CANBY, Circuit

Judges, KELLEHER, ** Senior

District Judge.

Nevada Entertainment applied for a

license to operate an adult video’ store

in the City of Henderson, Nevada.

Shortly before Nevada Entertainment

filed its application, the City adopted

a zoning code limiting adult businesses

to Commercial Highway ( CH ) zones. The

City had no CH zones when the new code

was adopted. The City toid Nevada

Entertainment it could operate an adult

business only in a CH zone, and, since

no such zone existed, it would have to

apply for a zone change or variance as

well as a conditional use permit.

Instead, Nevada Entertainment filed a

**The Honorable Robert J. Kelleher,

Senior Judge, United States District

Court for the Central District of

California, sitting by designation.

6-3

new license application for a genera!

rather than an adult video store

The

City issued a license to operate 4

general video store. Nev

Entertainment then opened an adult

store.

The City commenced a procee

before the City Council to revoke

Entertainment's license because >

Entertainment had misrepresented

nature of the business it intended

open. After a hearing, the City Cou

issued an order revoking the Lac

because of the misrepresentation

Nevada Entertainment s applicat

Rather than appealing this order to

the

state district court, Ney

Entertainment filed this action

federal court challenging

constitutionality of the zoni

ordinances and seeking injun

relief.

6-4

The City argued the district court

was required to abstain under Younger v.

Harris, 401 iB. > OF (1971). The

district court rejected the abstention

Claim but granted judgment for the City

on the ground that under Dennis v.

United States, 384 U.S. 855 (1966),

Nevada Entertainment was’ barred from

cha’ 'enging the constitutionality of the

zoning ordinances because it had

obtained its license by fraud. Nevada

Entertainment appealed. The City

cross-appealed the court’s refusal to

abstain. We affirm the judgment of the

district court on the basis of Dennis

and dismiss the cross-appeal as moot.

I. NEVADA ENTERTAINMENT’S APPEAL

The district court properly

declined to consider the

constitutionality of the ordinances.

“One who elects [to commit fraud] as a

means of self-help may not escape the

consequences by urging that his conduct

6-5

be excused because the statute which he

sought to evade is unconsitutional. ™

Dennis, 384 U.S. at 867; gee also

Ancafora v. Board of Educ. of Montgomery

County, 491 F.2d 498 (4th: Cire: 12974

(teacher could not challenge dismissal

on the basis of discrimination where he

was dismissed because he lied on his

application). Nevada Entertainment's

license was not revoked because of the

nature of its business activity, but

rather because Nevada Entertainment's

application misrepresented the nature of

its business.

Nevada Entertainment argues the

district court should not have relied on

Dennis because the issue of fraud was

“never pleaded nor briefed. However,

the federal complaint for declaratory

and injunctive relief specifically

alleged “[pllaintiffs made no material

misrepresentations on their

application, and the City’s answer

ee ee Wein er te deine

6-6

denied the truth of this allegation. As

the district court recognized, the City

contended throughout the litigation that

the constitutionality of the ordinances

was not at issue since ‘the plaintiffs’

license was revoked because of their

own fraud, not because of the nature of

their business. The stipulated record

on which the case was tried in_ the

district court included transcripts of

the city council hearing, which was

devoted exclusively to the issue of

fraud. Nevada Entertainment had

adequate notice that its fraudulent

conduct was one of the issues in the

case.

Nevada Entertainment also argues

the administrative record is

insufficient to support the district

court’s finding of fraud because there

was no opportunity to present

“affirmative evidence to support’ the

contention that it was ‘induced to

6-7

falsify the license application.

However, the testimony on which Nevada

Fntertaiment relies to support this

inducement argument was in the record

before the district court, and Nevada

Entertainment does not point to any

additional evidence in support of its

argument or suggest it would have’ been

barred from presenting such additional

evidence to the city council. The

district court's finding of deceptive

conduct is amply supported by the

record.

Nevada Entertainment argues that

even if its conduct were deceptive, the

district court should have allowed some

“deception to permit Nevada

Entertainment to position itself to

challenge the constitutionality of the

ordinances. Nevada Entertainment offers

no reason why it could not simply have

challenged the denial of the original

6-8

application rather than submitting a

second, fraudulent application.

II. THE CITY'S CROSS-APPEAL

The City cross-appealed arguing

Nevada Entertainment’s’ entire action

should have been dismissed under

Younger. Since the City has'7 prevailed

in the district court and on appeal, any

discussion of the City’s argument would

be advisory. See Lindquist v. Idaho

State Bd. of Corrections, 776 F.2d 851,

853-54 (9th Cir. 1985). We decline to

reach the abstention issue and dismiss

the cross-appeal as moot.

The judgment of the district court

if AFFIRMED. The City’s cross-appeal is

DISMISSED as moot.

eT ee ene Se ent ee

PP 7

PETITION FOR REHEARING IN NEVADA

ENTERTAINMENT INDUSTRIES, INC. , ET

AL, v. CITY OF HENDERSON, El AL. .

NO. 92- 17054 [DC # CV-90-00264-LDG

Nevada (Las Vegas)], FILED MAY 18,

1994, FILED ON BEHALF OF THE CITY

OF HENDERSON ET AL.

[Reference: Petition at page

§, 6, 0068 21).

—— Ee le ale el a ll Me ie ee ee St ie, be

._ — eS ee oe ee

7-1

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 92-17054

No. 93-15052

NEVADA ENTERTAINMENT

INDUSTRIES, INC.,

a Nevada corporation

and DANIEL BISHOP [DISTRICT COURT

NO. CV-S-90-264

Plaintiffs & LDG-LRL ]

Appellants

vs.

CITY OF HENDERSON, a

Nevada Municipal

Corporation, JAMES

GOFF, CHIEF OF

POLICE OF THE CITY

OF HENDERSON,

Defendants &

Appellees

a ee ee

APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEVADA,

HON. LLOYD D. GEORGE, DISTRICT JUDGE

PETITION FOR REHEARING

JAMES J. CLANCY (State Bar. No. 26946)

CAROL A. CLANCY (State Bar No. 065453)

9055 La Tuna Canyon Road

Sun Valley, California

(818) 352-2069

Attorneys for Defendants/Appellees

and Cross-Appellants

TABLE OF CONTENTS

;

_PAGE

TABLE OF AUTMOMITIEB. cbc. ec haa cot ii

PETITION FOR REHEARING.............05. 1

sna BE WR Os 6a a vas koe ka es 2

FACTS AND LAW WHICH THE

COURT: BUSBEDOREDI. 30403.000 26 0.e as. 2

AN APPARENT CONFLICT WITH ANOTHER

DECISION OF THIS COURT............005: 2

RE NEW ISSUE RAISED IN

mnOMAMNA DMOTBION........5...++.205. 2

RE NEW ISSUE RAISED IN

MEMORANDUM DECISION.............--005: 3

AEE «00 0's eh 4 SES kates als 3

7-4

TABLE OF AUTHORITIES

PAGE

FEDERAL CASES

ludici

the State of Hawaii,

i7 F.2d Seem Geel ic cctaves a a we»

805 F.2d 1353 (9th Cir., 1986)........ 14

Huffman v. Pursue, Ltd.,

430 U.8. Gee ct eeie ees 64a seks >. 2 8,

6, 7, & 10, 138, 14, id

| ) -

Lewis Galoob Toys, Inc..,

S64 Te ee eo od ors 8 he dace 15

W EF Drink: ; |

vy. City of Tempe,

620 F. 28 Bere GOe Ge BOER ace sete cess 11

CONSTITUTIONAL PROVISICNS

United States Constitution

Tenth Amendment............. a ae

Eleventh Amendment....... S. Be 2c 2

FEDERAL STATUTES

42 U.S.C.

TI St oe, ° ree ee 4. 8. is

Seet tom. Basa bh 6s 00 0 bees REO ewe 11

FEDERAL RULES

Ninth Circuit Rules,

et ae Lf ean ee ee ne ee ee 3

7-5

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 92-17054

No. 93-15052

NEVADA ENTERTAINMENT

INDUSTRIES, INC.,

a Nevada corporation

and DANIEL BISHOP [DISTRICT COURT

NO. CV-S-90-264

Plaintiffs & LDG-LRL ]

Appellants

Vs.

CITY OF HENDERSON, a

Nevada Municipal

Corporation, JAMES

GOFF, CHIEF OF

POLICE OF THE CITY

OF HENDERSON,

Defendants &

Appellees

ee ee ed

PETITION FOR REHEARING

TO THE CLERK OF THE COURT:

The City of Henderson, et al.

petition the Court to vacate its order

of April 7, 1994 and decision of May 4,

1994, in order to reconsider the City’s

Cross-appeal and whether the issues

presented therein are moot, in light of

certain material facts and law

7-6

overlooked by the Court, and an apparent

conflict with another Decision of this

Court; and to reexamine its order that

said memorandum ‘is not appropriate for

publication and may not be cited.

Respectfully submitted,

James J. Clancy

For Defendants/Appellees,

and Cross-Appeilants

City of Henderson a Nevade

Municipal Corporation, et al

Defendants/Appeliees and

Cross-Appellants (hereinafter its r

Henderson ) petition the Court for .

rehearing on the following grounce

FACTS AND LAW WHICH THE ‘OURT OVEBLOOKE!

l. Material pointe of fect ane ia

are overlooked in the court «@« Heaoreneus

decision of May 4, i9o4 and ' thie

Court's decision »» November 7 9

which applied the iae expressed

Huffman vy. —Pureue, Lie. 42 : $93

(1975), which vas *ithedraee by ts

Order, dated April 7. iv?

NI CONFLICT S118 AMUIEES

2 The law expressed ° thie

Court's November 2. iF?2 Opinioe *?

wae withdrawn with reepect ' the

applicability ff Butinag * the fect

situation of recore heres af ts

7-8

with the law expressed by another panel

of the Ninth Circuit in Ajona Vv.

Judiciary of the State of Hawaii, argued

and submitted November 1, 1993, and

decided March 3, 1994, which also

applied Huffman, but in a different

manner, which opinion was published in

the 17 F.3d, Vol. No. 2 advance’ sheets

(at 1244) dated April 25, 1994, and

received in the May 9, 1994 mail. Said

conflict with respect tc the application

of the Huffman test (rule of law),

expressed in the Ajgona case, was not

addressed in this Court’s opinions.

RE NEW ISSUE RAISED IN MEMORANDUM

DECISION

3. This Court’s order at page 1 of

its memorandum decision filed May 4,

1994, that said disposition is not

appropriate for publication and may not

be cited to or by the courts of this

circuit except as provided by Ninth

Circuit Rule 36-3, as applied to the

7-9

trial facts and law applied in this

cause, contravenes due process and equal

protection of the law principles

expressed in the federal constitution

and Common Law ‘precedent, which is

dependent upon and developed by a

comparison and resolution of the

conflicts in such cases.

RE NEW ISSUE RAISED IN MEMORANDUM

DECISION

4. The City’s cross-appeal is not

moot as held in this Court’s memorandum

decision, for all of the reasons stated

in 1-3 above.

ARGUMENT

The City of Henderson petitions

this Court:

(1) to vacate its order of April 7,

1994, which granted the Petition for

Rehearing of Plaintiffs/Appellants/

Cross-Appellees (hereinafter “Nevada

Entertainment’) and withdrew its opinion

(filed on November 2, 1993, and reported

7-10

at 8 F.3d (9th Cir. 1993), which cites

the Huffman case and holds it to to be a

controlling ‘precedent, as was argued

in the City of Henderson Cross-Appeal.

The November 2Z, 1993 opinion should be

amended to conform to the law expressed

in Ajona; specifically, its holding that

“a District Court must dismiss the

federal action...and there is no

' 7 ) “rT 7 Lief: ”

and

(2) to vacate the Court's

memorandum decision of May 4, 1994,

which adverts to certain (but not all)

of the trial facts which were before the

U.S. District Court, and affirms the

U.S. District Court’s Judgment on an

incomplete and erroneous recital of

trial facts, Without also considering

7 rol] itted f ) whic!

; t) Liat uw thi C t,

the most important of which is the fact

that an injunction was issued by the

7-11

U.S. District Court and is presently in

force as is the surety bond of $10,000,

which was filed by Nevada Title.

FIRST: At the outset of Nevada

Entertainment’s Civil Rights lawsuit

under 42 U.S.C. Section 1983, the U.S.

District Court erroneously issued, over

the City of Henderson's objections,

both:

(1) a temporary restraining

orde. on April 27, 1990, and

(2) a preliminary injunction

on June 4, 1990, which injunction

is still in effect, having been

continued pending disposition of

this appeal by order of this Court,

dated December 22, 1992).

The Federal Courts have, for 4 period of

from applying the laws of the State of

Nevada with respect to issuance and

enforcement of a quasi-judicial

administrative order relating to a

a ee eo

7-12

license revocation proceeding before the

Henderson City Council, which was

coercive in nature. Said state order:

(a) was subject to appeal in

the state court system, and review

thereof was ‘pending in the state

System, when the Civil Rights

Complaint was wrongfully filed by

Nevada Entertainment for the

purpose of interfering with the

Nevada proceedings in contravention

of the Eleventh Amendment, and

(b) became final and fully

enforceable under Nevada state law,

well before the occurrence of the

U.S. District Court trial of said

Civil Rights Complaint, in which

the jssues 0f fraud and the

Let rt) City’ 7

wits = Li 7

were relitigated, in contravention

of the Eleventh Amendment to the

U.S. Constitution.

7-13

Since the quasi-judicial order was not

appealed in state court, it became final

and is fully enforceable under Nevada

state law, and was entitled to

recognition by the U.S. District Court,

and by this Court of Appeal, in that:

(1) The City Council’s

quasi-judicial order had been lawfully

rendered and should have been’ regarded

by the federal courts as res judicata

and/or collaterally estopping the

Federal Plaintiffs; and

(2) Federal injuctive power here

has been wrongfully used _ to enjoin

enforcement of valid state laws and

valid and enforceable state decisions

under the test customarily applied in

equity cases involving injunctive

issues, without the requisite additional

circumstances which is mandated by the

Huffman test in cases where Huffman is

pleaded as a valid defense. The

tgecnennne ane een ee

Aiea AE RE RS REE NE ON EAN AS NEIL AEA SET RI AED

set RR ip a ait tay

7-14

memoradum decision, dated May 4, 1994,

(a) use of a Federal

Civil Rights Action under 42

U.S.C. Section 1983, by a

citizen of the state of

Nevada, to restrain the State

of Nevada from enforcing valid

state laws and valid state

decisions; and

(b) constitutes an

invalid federal intrusion into

the operations of the

judiciary system of the state

of Nevada, with respect to

judicial rev ew of state

orders.

Under the 10th Amendment, Nevada

(and its agent, the City of Henderson)

is entitled to the free exercise of its

Police Powers, and Nevada is entitled to

control the development of the rules and

procedures regarding the issuance and

7-15

judicial review of state orders issued

pursuant to its Police Power.

Under the 1ith Amendment, the

judicial power of the United States does

not extend to any action commenced and

prosecuted against Nevada by its own

citizen, over the objection of Nevada.

To restrain the City of Henderson in the

enforcement of its laws (regarding the

issuance of revenue-based municipal

business Licenses) requires the

restraint of valid state laws and the

entire operation of the judicial system

of the state of Nevada, with respect to

judicial review of such orders, and the

determination of the finality and

enforceability of such orders.

The federal judiciary enjoined the

operation of valid state laws without

cause. The reasoning expressed in the

memorandum decision of this Court, dated

May 4, 1994, and the court’s judgment

with respect to the propriety of the use

ee eee ee en Lo ae

7-16

of federal injunctive power, violates

the 10th and 11th Amendments of the U.S.

Constitution, and flies in the face of

the Huffman test (Rule of Law) mandated

by the U.S. Supreme Court (which

precludes the issuance of such an

injunction where the proponent fails to

plead the additional facts which Huffman

requires). This Court does not address

that distinction in its opinions. See

Aiona, discussed at page 9 infra.

SECOND: The U.S. District Court

preliminary injunction, which was

erroneously issued on June 4, 1990, and

continued by this Court on December 22,

1992, and has barred the City from

taking action for approximately four

years (in violation of the 10th and 1ith

Amendments), is presently in force

THIRD: At the hearing in the U.S.

District Court, the

City opposed the issuance of an

injunction on the grounds that the U.S.

7-17

District court could not grant equitable

relief in the nature of an injunction

because of the Equity “clean hands”

maxim which bars the courtroom to those

who have acted fraudulently.

At the trial of the Civil Rights

Lawsuit on November 27, 1992 (two and

one-half years after the granting of

injunctive relief), the U.S. District

Court again refused to apply the Huffman

Test (Rule of Law) as mandated by the

U.S. Supreme Court and instead,

proceeded to reexamine the facts which

were found in the Hender n City

Council’s quasi-judicial hearing under

Nevada law, finding and declaring that

the City Council’s “fraud finding was

proper (i.e. was not ultra vires), and

thereby establishing as a proven fact

that, in entertaining jurisdiction over

the Civil Rights Action, the Court’s

determination was in violation of the

Huffman test (Rule of Law) and the Tenth

7-18

and Eleventh Amendments.

Rather than affirming that the

Huffman test (Rule of Law) applied to

the federal complaint and prohibited the

Court from exercising jurisdiction and

issuing an injunction, the U.S. District

Court lifted its preliminary injunction

and decided the case on the merits,

denying federal relief on ne very

grounds that the City had urged to

prevent issuance of any federal

injunction at the time preliminary

relief was issued (i.e. that the Equity

maxim precluded the Court from assuming

jurisdiction). On December 22, 1992,

the Ninth Circuit stayed the U.S.

District Court’s Order and wrongfully

continued that injunction jin further

violation of the Huffman test (Rule of

Law) and the Tenth and Eleventh

Amendments.

The Court of Appeal’s May 4, 1994

memorandum decision flies in the face of

7-19

the test (Rule of Law) which was

declared and mandated by the U.S.

Supreme Court in Huffman v. Pursue.

Ltd., 420 U.S. 592 (1978), for the

purpose of preventing a potential Tenth

and Eleventh Amendment conflict similar

to that which had occurred in Huffman.

By reexamining the facts which had been

before the Nevada quasi-judicial body to

permit the Court to arrive at its own de

novo finding of “fraud (an _ inherent

violation of the Huffman Rule which

contravenes’7 the Tenth and Eleventh

Amendment), and denying federal

jurisdiction on that ground, the U.S.

District Court and this Court of Appeal

has repeated the very error that the

Huffman Rule of Law was designed to

prevent.

FOURIH: The opinion of the Ninth

Circuit panel in Aijona v. Judiciary of

the State of Hawaii, 17 F.3d 1244 (Mar.

3, 1994) (Poole, Wiggins, T.G. Nelson)

ee a e

EP EP WER NNO

7-20

specifically held the rule of law to be

that which the trial court and this

Court of Appeal has refused to

acknowledge; that is. that the Plaintiff

TTC , of '

circumstances. See 17 F.3d 1244, at

1248-1249:

“Under the_Younger abstention

doctrine, a federal court in most

circumstances may not interfere

with pending state criminal or

civil proceedings, including state

administrative proceedings. Ohio

Civil Rights Comm ny. Dayton

Christian Schools. tinc., 477 U.S.

619, 106 §.Ct. 2718, 91 L.Ed.2d 512

(1986); Bonwin vy. Dunham, 818 F.2d

675, 677-78 (8th Cir. 1987)

(administrative proceeding

regarding suspension of driver's

license for speeding). Abstention

is appropriate in favor of state

proceedings if (1) the state

proceedings are ongoing, (2) the

proceedings implicate important

state interests, and (3) the state

proceedings provide the pieretiftt

an adequate opportunity te fitigete

federal conetitutional quest ome

Middlesecs Coumiy =!ldica ——-_ he

Garden Siete... Bat.Ases.2 667 i

423, 432, 102 &.¢€t 25i6. a>at ra

!. Ed.26 116 (1962): eeeere iteee

. 505 Ff. $257

1357-56 (9th Cir. 1986) il... meee

Lae 4

federal action ... Jamel Lees * Pe

no discretion to acael. sssmeeiiee

reliel Ecaah lal i._t ere. 0%

F 24 et 1386 (citing Caletege Ainge

Sater Conservalion Bisi.._t.. nhs 143

States. 424 U.S. 800 e316 a. 22 »

Ss. ct 1236. 12746. 47 L.84.28 883

(1976) iOwr tapheerie

U.S. et 5$2-66 1 S.Ct e' 7S5

For eranp ie :f . stetete«

fiegrentiy end petentiy ,ie@letee

euiprese aet ites "*

prohibitions ia every . @ee*

sentence etd oareegr ee” ‘hee

federal iantervent ioe *» state

proceedings is ereroe? ete ?

Ser -Eeaphesrie

Here state eter. eaietret ive

proceed ings en? we _

proceedings were aQGo-. ." ‘ te

tine the Sieaiatitte : e? Hie

section 1987 ect ioe sae ‘he

Thie i@ the game “'* 3 a) :

oe befere the we * 4 t< se'%s

7-22

plaintiffs do not contest that’ the

state has an important state

interest in keeping drunk drivers

off the road [footnote omitted].

Thus, the first two prongs of the

Younger test are met.

“In addition, the third prong

of the abstention inquiry -- the

adequacy of opportunity to raise

constitutional issues -- is

satisfied by the plaintiffs’

ability to raise constitutional

Claims during judicial review of

the administrative proceedings.

Haw. Rev. Stat. Section 286-260

(court may review whether director

exceeded constitutional or

statutory authority); gee Dayton

Christian Schools, 477 U.S. at 629,

106 S.Ct. at 2724 (even if

constitutional claims cannot be

raised in an administrative

proceeding, it is ‘sufficient

[that they] may be raised in state

court judicial review of the

administrative proceeding’);

Partington v. Gedan, 880 F.2d 116,

124 (9th Cir. 1989) (same), vacated

in part on other grounds, 497 U.S.

1020, 110 S.Ct. 3265, 111 L.Ed.2d

776 (1990) [footnote omitted]. ~

{Our Emphasis. ]

FIFTH: The City contends that its

cross-appeal, under the law expressed

above in Ajiona, supra, is not moot, for

the reasons expressed in the

“Conclusion to its response to Nevada

Entertainment's Petition for Rehearing

7-23

of this Court’s November 2, 1993 opinion

(which held that Huffman applied but

would not express the law to be as was

further upheld and explicated in Aiona).

In its Conclusion, the City argued at

pages 7-9:

Conclusion

“Appellant City of Henderson

is of the view that this Court's

three judge panel opinion, reported

in 8 F.3a, at 1348-1353, is

eminently correct in so far as it

has applied the Huffman abstention

doctrine to the narrow trial facts

which were before the United States

District Court.

“The City of Henderson in this

regard, however, makes these

further contentions:

"€1) The Court's opinion

would have greater value to other

federal appellate courts and

litigants were it to more fully

elaborate upon what it meant at

page 1350, when it referred to The

considerations relied upon in

' Did the Court mean, 4&8

the City of Henderson concluded,

that the United States Supreme

Court fashioned the Huffman rule

(as to civil litigants) for the

guidance of federal district courts

so as to require them to abstain or

require “heightened pleadings

where the pleadings show a4 strong

probability that the assumption of

federal jurisdiction would lead to

the type of Tenth and Eleventh

Amendment infringement of state

7-24

powers which occurred herein, as

corroborated by the United State

District Court’s finding of fraud,

retrospectively applied?

"3D The cases cited by

Nevada Entertainment and the Amicus

Curiae do not affect this Court’s

opinion in as much as they are not

apposite in this Huffman-type

appeal which is controlled by an

extremely narrow set of facts.

Further, their analyses are

defective in their apparent failure

to weigh in the balance “the

considerations relied upon in

Huffman. The City of Henderson is

of the further view that were this

Court's opinion to be expanded to

include an elaboration of its

language “The considerations relied

upon in Huffman, this Court's

opinion would materially alter the

manner in which the Huffman

Doctrine is applied in those cases.

It would appear, however, that if

such opinion is not expanded, a

substantial federal question will

be raised which may require

resolution by the United States

Supreme Court.

“(3) Finally, the City is of

the opinion that this Court's

opinion requires a remand to the

trial court for the exercise of the

district court’s discretion on the

question of attorney's fees, in the

light of the entire record

(including this Court's opinion

that the trial court erred in that

the Huffman Doctrine should have

been applied), and the City of

Henderson's claim that,

notwithstanding Nevada

Entertainment's attorneys had both

subjective and objective knowledge

7-25

from existing case law that the

narrow facts of record established

a clear case for application of the

Doctrine, they,

neverthless, recklessly continued

such litigation by remaining silent

and refusing to address the City’s

arguments on the jurisdictional

aspects.

This Court’s November 2, 1993 opinion

with respect to the application of

Huffman should be reinstated and amended

to conform to Aiona, and remanded for

determination of an award of a

reasonable attorney fee in favor of the

City of Henderson under 42 U.S. 1988,

for assessment against the Bond which

was filed by Nevada Entertainment.

SIXTH: In four years of appellate

litigation, which included two pre-trial

applications to the Ninth Circuit Court

of Appeal on extraordinary petitions for

a writ of mandate and two applications

to the U.S. Supreme Court on (pre-trial)

petitions for writs of certiorari, the

City of Henderson has_ contended that

certain panels of the Ninth Circuit are

7-26

ignoring the Huffman test (Rule of Law)

which the U.S. Supreme Court has

mandated. Representative of that split

of opinion is the differing opinions of

Circuit Judges Kennedy and Tang in World

Famous Drinking Emporium v. City of

Tempe, 820 F.2d 1079 (CA 9, 1987). See

City of Henderson's Opening and

Answering brief, at page 10 reading:

“There appears to bea split

of opinion within the Ninth Circuit

on this issue, as demonstrated by

the Ninth Circuit’s handling of the

matter in World Famous Drinking

Emporium, Inc. v. City of Tempe,

820 F.2d 1079 (CA 9, 1987) {Tang

and Kennedy]. The concurring

Opinion of then-Circuit Judge

Kennedy clearly follows the

approach of the Sixth Circuit,

which holds that it is

‘jurisdictional,’ and that a

dismissal is mandated. ™

The City of Henderson contends that this

Court's November 2, 1993 opinion (which

addressed the Huffman issues) should not

have been withdrawn but should have been

modified.

All that this panel need do to

7-27

bring its interpretation of Huffman, as

set forth in its opinion dated November

2, 1993, into compliance with the rule

of law expressed in the Ajona case,

which the City contends is clearly the

law under the U.S. Supreme Court mandate

in Huffman, would be to add the

following sentence appearing in the

Aiona case at page 1248:

ae S these three circumstances

exist, then a ‘district court must

dismiss the federal action... and

there is no

discretion to grant injunctive

relief.’

SEVENTH: The City contends that,

in the light of the present legal

controversy over the meaning of the

Huffman test (Rule of Law) which has

existed for the past three years as

noted above, this Court cannot,

consistent with due process and equal

protection of the law principles of the

federal constitution, and the evolution

of common law “precedent which depends

7-28

upon the correct resolution of such

disputes, issue an order which precludes

the decisions of this Court from being

cited and considered in the Ninth and

other Circuits of the federal court or

in State Courts, in relation to the

subject of such raging controversies,

and such order should be vacated.

EIGHTH: At oral argument, Chief

Judge Browning inquired as to why the

jurisdiction issue (re federal courts)

was so important to the City’s

interests. A partial explanation

follows:

The record clearly indicates’ that

there was no reasonable basis for the

U.S. District Court to grant the

injunctions issued herein (i.e. the

temporary restraining order and the

preliminary injunction). Federal

injunctive relief allowed Federal

Plaintiffs to freely conduct their

operations in defiame of State law

7-29

pending “adjudication on the merits, ,

without making the requisite factual

showing of “extraordinary

circumstances, | as required by

Younger-Huffman. The City has suffered

irreparable harm by being restained for

a period of four years from enforcing

valid state laws and valid state

decisions.

ae t ;

federal iniunctive power that has

’ Ta? Fed | Plaintiff

hielded t! t] (

their f£ ‘lan! luct 1 which 1

bled tl uct thei ' :

bstantial rit

in defiance of Nevada state law. The

disposition of this case by this Court

of Appeal is grossly unfair. By failing

to address the improper exercise of

federal injuctive relief and by refusing

to apply the Huffman test, the Court's

action will only serve to encourage the

7-30

multiplication of fraudulent conduct.

This is because the Court, in effect,

has rewarded and encouraged the filing

of federal complaints under 42 U.S.C.

Section 1983, accompanied by requests

for injunctive relief pending ‘final

adjudication on the merit, as a method

of ‘buying time” for recalcitrant

business operators.

Fresh International Corp, ov.

Agricultural Labor Relations Bd., 805

F.2d 1353 (9th Cir. 1986), cited with

approval in Aiona, supra, states that:

“When a case falls within the

proscription of Younger, a district

court must dismiss’ the federal

action. See Judice v. Vail, 430

U.8. 327¢ 3376 :OF' B.C A2Bhi4 1246,

51 L.Ed.2d 376 (1977). The Supreme

court has stated expressly that

‘[wlhere a case is properly within

{the Younger! category of cases,

there is no discretion to grant

injunctive relief.’ Colorado River

Water C District

United STates, 424 U.S. 800, 816 n.

22, 96 S.Ct. 1236, 1246 n. 22, 47

L.Ed.2d 483 (1976). °

In a quasi-judicial administrative

proceeding, Federal Plaintiffs were

7-31

found to have been guilty of fraud,

having made misleading statements and

misrepresentations in connection with

their application for a4 City business

license. A deliberate misrepresentation

to a governmental licensing agency can

never be immaterial. The manner in

which the federal courts have handled

this case has caused irreparable harm to

the City of Henderson, as Was stated to

the U.S. District Court by the City in

oral argument opposing the issuance of a

temporary restraining order {see

Reporter's Transcript for April 27, 1990

(hearing on temporary restraining

order), appearing at Appellees’

Supplementary Excerpts of Record

(hereinafter referred to as "SER"), at

Fxhibit 18, pages 13-14]:

“The harm -- there is irreparable

harm to the City because what it

does, this type of case sends a

message to the public that it's

okay to make misrepresentations,

that it’s okay to lie on your

application form if you don't agree

7-32

with an ordinance of the City, and

the, if the City should find out

about it and seeks to revoke your

license, then all you have to do is

seek equitable relief to stay open.

And that is contrary to the

fundamental principle of he _ who

comes into a court of equity must

come with clean hands. And that

is exactly the situation we have

here.”