### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT D ecember 30, 20 05 THO MAS K. KAH N CL ERK [DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 04- 1660 7 Non-A rgum ent Calendar

____ ____ ____ ____ ____ ____ D. C. Dock et No. 0 4- 00 20 7- CV-ORL-1 9DAB DAVKEN, INC., a corporation organized under the laws of the S tate of Indiana, Pl ai ntiff -A ppe lla nt,
ve rs us CITY OF DAYTONA BEACH SHORES, a m unicipal corporation organized under the laws of the S tate of Florida, De fendant

- A pp e l l e e.

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court fo r the Mi ddl e D istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (D ec em be r 30, 200 5) Be fo re T JO FL A T , D U BI N A a nd M A RC U S, Ci rc uit Jud ge s. PE R CU RIA M:2

D av ke n, I nc . appe al s the dis tr ic t cour t’ s sua spon te dis m iss al of Co unt 1 of it s 42 U
. S
. C
. § 19 83 a c t i on , a ss e rt i ng a vi ol a t i on of t he C on t r a c t s C l aus e of Ar ticle I, Se ct ion Ten of the U
. S. Co nst itu tio n, a nd e ntr y of sum m ar y j udgm en t onit s
re m ai nin g c la im s. D av ke n su ed the Ci ty of D ay

ton a Be ac h Shor es (“ Ci ty ”) af te r the Ci ty en act ed Ordinanc e 2003 -2 4, w hic h r eg ula te d th e sa le of f ir ew orks w ith in the Ci ty
. W e af

fi rm in pa rt a nd r ev er se a nd r em an d inpa rt
. T he pa rt ie s a re f

am ili ar w iththe r el ev an t u nd erl y ing fa ct s a nd w e onl y
sum m ar iz e the m

he re . O n N ove m

be r 6, 200 2, D av ke n e nte re d a n a gr ee m en t t o le as e
a bui ldi ng i n the Ci tyf

or f ive y ears , w iththe opt ionto ex te nd the le as e fo r fi ve ad dit ion al y ears . D av ke n pl an ne d to ope n a firew orks s tor e at the loc at iona nd the lease provided that “ Te nant shall be entitled to the use and poss ession o f the Pr em ises fo r the pur

pose s of r en ova tio n a nd r em ode lin g f or aF ir ew orks S tor e. ” P ri or to
ex ec uti on o f the le as e, the le sso rs , w ho pur ch as ed the pr ope rty on S ep te m

be r 5, 200 2, at which tim e th e p roperty wa s zoned for a retail sto re, had determ ined that local law perm itted the direct retail sale of fireworks i n the City
. Da vken ob tained all necessary pe rm its a nd i nve ste d hu ndr ed s of tho usands of

dol la rs in ca

pit al im pr ove m en ts p ri or to o pe nin g f

or bus ine ss i n M ay

200 3. T he re af te r, on J une 25, 200 3, the Ci ty Co unc il passe d O rd inanc e 2003 -2 4 to
re gul at e the sa le of fi re w orks by , int er al ia , (1 ) co m pe lli ng pot en tia l pu rc ha se rs f ir st3

to o bta in an a ff

ida vit f ro m the Ci ty P oli ce D ep ar

tm en t du ri ng we ek da y

bus ine ss hour s, a nd ( 2) r equir ing ve ndor s, suc h a s K ra zy D av e’ s, to m ai l fi rewo rk s to
cu sto m er s r athe r than pr es en tin g th e fi re w orks t o th e pur ch as er a t t he ti m e of pur ch as e. T he dis tr ic t c ourt no te d that the O rd inanc e w as “ ap pa re ntl y in re spon se to ci tiz enc om

pla int s a bout noi se . ” T he dis tr ic t c ourt c ont inu ed : T houg h th e ost en sib le pur pose of or din an ce 200 3- 24 w as to cu rt ai l t he dis ch ar ge of

f ir ew orks wi thi n Da yton a Be ac h S hor es , the Ci ty Attorney stated during City Council deliberations that Flori d a s t atutes al re ady e nable d th e Ci ty to fi ne pe opl e w ho m isu se f ir ew orks. T he Ci ty A tto rn ey a lso sta te d th at

the or din an ce w ould ha ve no ef fe ct on the availabi l i ty

of fire works because they we re r eadily

available fr om

an out le t i n ne ar

by D ay ton a Be ac h. T he or din an ce pa ssed, how ev er , a nd D ay ton a Be ac h S hor es be ga n to e nf or ce it a ga ins t P la int if

f on J uly 18, 2003
. U nsur

pr isi ngl y , thi s e ff

ec tiv el y r uin ed P la int if f’s bus ine ss be ca use f ir ew orks c oul d be obt ai ne d w ith out a ny e nc um br an ce s si m

ply by dr i v i n g af

e w b l o c k s t o D a yt o n aB e a c h , w h i c h , b e i n g as e pa ra te m uni ci pality , w as out sid e the j ur isd ic tio n of or din an ce 200 3- 24. Plaintiff alleges that the actions of D aytona Beach Shores have depr ived him of the inc om e he ne ed s to fulf ill his obl iga tio ns u nde r his bui ldi ng lease. InN ove m

be r 2003 , P la intiff so ught ava ri an ce or

the
“ gr an df athe ri ng” of the or din an ce be ca use it ha d destro y ed

it s bu sin es s by vitiat in g ve ste d pr ope rty r igh ts and u nde rm ini ng the ope ra tio n of Plaintiff’ s lease. O n Dec em ber 10, 2003, the City

Council cons i d ered Plaintiff’ s petition , but, on a dvice of the City Attorney , dism issed it as devoid of m erit and invited Plaintiff to sue. On February

19, 2004, Da vken filed this law suit, alleging a subs tantive-duepr oc es s c la im

und er the Fo urte en th A m en dm en t a nd an un re as ona ble im pa irm en t of4

ex ist ing c ont ra ct

r ig ht s an d ob lig at ion s invio la tio n of A rt ic le I , S ec tio n T enof the U
. S. Co nst it ution, both pu rs ua nt t o 42 U
. S. C. § 19 83 ( “ Co unt 1” ), se ek ing a de cl ar at or

y j udgm en t tha t the O rd inanc e con fl ic te d wi th Fl or ida la w (“ Co unt 2” ), a nd
se ek ing “ j ust c om pe nsa tio n” und er

the F lor ida

Co nst itu tio n ( “ Co unt

3” ). A ft er

the Ci ty f ai le d to f ile a re spon siv e ple ad ing or m oti on, on Apr il 6, 200 4, ac le ri ca l de fa ult
wa s entered, pursuant to Fed. R. Civ. P. 55(a). Ther eafte r, on April 16, 2004, D avken
m ove d f or pa rt ia l de fa

ult j udgm en t, sta tin g it

w as e nti tle d to a def

au lt j udgm en t as t o Counts 1 and 2 and also stating that Count 3 had been pled in the alternative so that the dis tr ic t c ourt ne ed

not gr an t r el ie f on C ount

3 i f it ent er ed a de fa

ult j udgm en t on Co unt s 1 and 2
. Pr ior to se tti ng D av ke n’ s m oti on for pa rt ia l de fa

ult j udgm en t f

or ahe ar ing , or oth er w ise a ct ing on the m oti on, a nd b ef or e the Ci ty ha d ap pe ar ed in the pr oc ee din g, on M ay 7, 200 4, the dis tr ic t c ourt su a spon te dis m iss ed D av ke n’s Co unt 1 c la im to the e xte nt tha t it asse rt ed a viol at ion of the Co ntr ac ts Cl au se of A rt ic le I , S ec tio n 10
. T he c ourt sta ted t ha t i t ha d c ondu ct ed it s ow n r ev ie w of

D av ke n’ s c om

pla int a nd
m oti on f or pa rt ia l de fa

ult j udgm en t a nd c onc lud ed tha t D av ke n’ s C ount

1 f ai le d to sta te ac la im fo r viol at ion of its ri ght s unde r the Co ntr ac ts C lause . T he c ourt f ound that althou gh the com

plaint adequatelyalleged a contrac tual relationship betwee n D av ke n a nd its le sso r, the co m pla int f ai le d to a de qua te ly

ple ad tha t O rd inanc e 2003

-5

2 4 wa s an im

pairm ent of that contract. More specif ically , the district court de te rm ine d th at

the O rd inance “ ha s si m ply c ri ppl ed P la int if f’ s a bil ity to earnthe
m one y ne ce ssary

to pa y it s r en t, not

abr oga te d or oth er

w ise r ew ri tte n a ny

pr ovi sio n
o f t h e l ea s e c o n t ra ct i t s el f. Wit h o u tn u l l i fyi n g o r r ed ra ft i n g s o m e t er m o f P l ai n t i ff ’s le as e, how ev er , or din an ce 200 3- 24 h as not c ont rave ne d th e co ntr ac ts c lause . ” A lso on M ay 7, 200 4, in a se pa ra te or de r, the dis tric t c ourt se t a n e vid en tiary he ar ing to
co nsi de r the r em ai nde r of D av ke n’ s m oti on f

or pa rt ia l de fa

ult j udgm en t. O n M ay 26, 2004 , the Ci ty en te re d its a ppe ar an ce in the a ct iona nd m ove d to
se t a sid e the c le ri ca l de fa ult a nd f ile it s a nsw er

out of ti m e, sta tin g th at

a lth ough the Ci ty Mana ge r re ce ive d the sum m ons an d c om

pla int , his a ssi stant h ad

ina dve rt en tly failed to forw ard these m aterials to the a ppropriate entity

that defends the City

in such
ac tio ns. A ft er

a n e vid en tiary

he ar ing , the dis tr ic t co urt se t a sid e the c le ri ca l de fa ult , fi ndi ng tha t t he Ci ty ’ s f

ai lur e to f ile it s re spon se to the co m pla int w as not

w ilf ul and
w as not m eant t o th w ar

t t he pr oc ee din gs o r to be in re ck le ss dis re ga rd of the m . T he
co urt a w ar de d D av ke n th e co sts a nd a tto rn ey s’ f ee s it ha d in cu rr ed in obta ini ng the cl er ic al de fa

ult a nd d ef en di ng the m oti on t o se t i t a sid e. T he dis tr ic t c ourt a lso pe rm itt ed D av ke n to f

ile a n a m en de d c om

pla int
. In Count 1 of Davken’ s am ended com plaint, it realleged the subs tantive-duepr oces s vi ola tio n, a dde d ac la im ba se d one qua l pr ote ct ionund er the F ourte en th6

A m en dm en t, pur suant to 42 U
. S. C. § 1983 , an d om itt ed the Co ntr ac ts C lause c la im that had been sua spo nte dism issed bythe dis t ri ct co u rt
. Da vken also reasserted Co unt 2, se ek ing ade cl ar at or

y j udgm en t tha t the O rd inanc e con fl ic te d w ithF lor ida law, and Count 3, seeking “ j ust com pensation
. The C ity

m ove d for sum

m ary j udgm en t on Davken’ s am ended com plaint. T he district court entered sum m ary j udgm en t, f

ind ing tha t ( 1) the or din an ce m et the ra tio na l- re la tio nshi p te st u nde r the Due P rocess and Equal Protection Clauses since the City ’ s passage of the ordinance
wa s r a t i on a l l y r e l a t e d t o l e gi t i m a t e go ve rnm e nt pu r po se s, i nc l ud i ng t he he alth of a la rg e el de rl y popu la tio n, the sa fe ty of the c om m uni ty , e nvi ro nm en ta l c onc er ns, a nd qua lit y -o f- lif e co nc er ns; ( 2) the or din an ce did

not c onf lic t w ithF lor ida

la w a nd, thu s, Da v ken was not entitled to a declaratory j udgm ent; and (3) the state-lawinverseco nde m na tio n c la im

w as not y et r ipe f or r ev ie w . T his appe al f

oll ow ed
. D av ke n a rg ue s th e dis tr ic t c ourt e rr ed by sua spon te dis m iss ing its Co ntr ac ts Cl au se c la im

f or f ai lur e to st at e a cl ai m , both pr ior to the Ci ty ’ s a

ppe ar an ce in the
ac tio n a nd w ith out

pr ovi din g no tic e to D av ke n. W e agr ee . I n Je ff er son Fo urte en th Ass oc s. v . W om et co de Pu ert o R ic o, In c. 69 5 F .2d 52 4 (1 1t h C ir. 1 98 3) , we spe ci fi ca lly

pr ohi bit ed

suc h asua

spo nte dis m iss al in the f oll ow ing c ir cu m stanc es : (1) th e d efendant h ad not filed an answer and, th us, th e p laintiff s till had a righ t under Fe d. R. Ci v. P. 15( a) to am en d the co m pla int ; ( 2) the pla int if

f’ s c la im w as br ough t i nAs we r ecog nized in W ometco, a dismissal based on a district court’s c onclusion that the 1 suit lacks merit diffe rs from a sua sponte dismissal based on a f inding of frivolity . See 695 F .2d at 526 n.3 (noting inhere nt power of courts to dismiss frivolous suits without notice and obse rving that “[w]e do not hold that case s cannot, if proper proce dures are followed, be dism issed when they are so patently

lackingin merit as to be fr ivolous”). The City did not argue in the district cour t and does not contend her e, nor c an we find, that Davke n’s claim bas ed on the Contracts Clause r ose to the level of be ing patently

frivolous, within the meaningof Wometco.
Th e City su g g e sts that ou

r Wo me tc o h old ingis the min or ity vie w a nd ur g e s u s n ot t o 2 a pp ly it h e re . B a se d on our “ pr ior pr e c e de nt ru le ,” Wome tc o is bin din g on su bs e qu e nt p ane ls o f t

his Court and ca

n be overturne d only by the Court sitting en banc. Morrison v. Amway Corp., 323 F.3d 920, 929 (11th Cir. 2003) (citations omitted). Be cause this Court sitti ng en banc ha s not overrule d Wome tc o, it i s b ind ing

pr e c e de nt whic h mu st b e fo llo we d b y thi s p ane l. 7 good faith and wa s not vexatious or p atently frivolous; and (3) the district court had provided the plaintiff with neither notice of its intent to dism iss the com plaint no r an oppo rt uni ty t o res po nd. Id
. a t 52 7; c f. N ei tz ke v. W ill ia m s, 490 U
. S. 319 , 330 n. 8, 109 S. Ct. 1827 , 104 L. Ed. 2 d 338 (1989) (declining to decide w hether a district court possess es the ability to sua sponte dism iss a com plaint un der Rule 12(b)(6))
. 1 Sim ply put, all of the foregoing cir cum stances that existed in W om etco also are pr es en t i n th e ca se at ba r. A cc or din gly , pur suant t o ou r co ntr oll ing c as e pr ec ed en t, 2

w e re ve rs e an d r em an d th e dis tri ct co urt’ s su a spon te dis m iss al of the Co ntr ac ts Cl au se c la im
. O n rem an d, the dis tr ic t c ourt m ust pr ovi de not ic e of

it s in te nt t o dis m iss the c la im

f or la ck of m er it an d an opportun ity fo r D av ke n to r es pond pr ior to dis m iss ing the c la im

f or la ck m er it.We also find no abuse of discretion in the discove ry ruling s Davke n challeng es. See 3 Wright v. AmSouth Banc orpor a ti o n , 3 2 0 F
. 3 d

1 1 9 8 , 1 205 (11th Cir. 2003) (re viewing district court’s ruling s on discovery

issues for a

buse of discr etion); Har

ris v. Chapman, 97 F.3d 499, 506 (11th Cir. 19 96 ) (“ Di str ic t jud g e s are a c c or de d wi de dis c re tio n in ru lin g up on dis c ov e ry mot ion s, and a pp e llate revie w is acc ording ly

defe rential.” ). 8 A s fo r D av ke n’ s re m ai nin g ar gum en ts, ba se d upon our care fu l re vie w of the record and the dis trict court’ s thoroug h and we ll-reasoned sum m ary j udgm ent order ad dr es sin g vi rt

ua lly e ve ry a rg um en t r ai se d inthi s a ppe al , w e can fi nd no r ev er sib le
er ro r in the dis tr ic t c ourt ’s di spos iti on o f the r em ai nin g c la im s a nd a ff irm it s j udgm en t i n a ll oth er

r es pe ct s. 3 AF FIRMED IN P AR T; REVE RS ED AN D REMA ND ED IN P AR T.