Opinion ID: 201629
Heading Depth: 2
Heading Rank: 4

Heading: Count One: Section 1983 and Facial Challenge

Text: 31 As previously mentioned, the district court construed the Appellants'Count One as being comprised of two separate counts: a Section 1983 claim and a challenge to the facial constitutionality of Section 61-17 of the Bangor Code. In its December 20, 2001 order, the district court addressed first whether Count One of the complaint stated a claim under Section 1983 against the Individual Appellees in their individual capacities, and concluded in the negative. The district court next addressed whether Appellant Cormier-Youngs had standing in her personal capacity to pursue a claim against the City of Bangor and the Individual Appellees in their official capacities, and similarly concluded in the negative. This left only Diva's Section 1983 claim against the City of Bangor and the Individual Appellees in their official capacities and its facial challenge to the constitutionality of the Bangor Code Section 61-17. 32 The district court then raised the issue of Younger abstention sua sponte and dismissed the facial challenge to the Bangor Code under principles of comity. 14 As to the remaining claim, Diva's Section 1983 claim attacking the propriety of the City Council's denial of its permit application, the district court, in its December 20, 2001 order, raised the issue of Colorado River abstention sua sponte, 15 and stayed its decision of that claim pending the outcome of the state enforcement action. The Appellants do not challenge on appeal the district court's decision to abstain from deciding the Section 1983 claim until after the state court decision, and make no mention of the district court's decision to exercise Younger abstention and dismiss the facial challenge to Section 61-17. Thus, we review de novo the district court's December 20, 2001 decision to (1) dismiss the claims against the Individual Appellants in their individual capacities; (2) dismiss Cormier-Youngs as a plaintiff for lack of standing; and its June 3, 2003 decision to (3) dismiss the remaining Section 1983 claims under the Rooker-Feldman doctrine. We treat as waived any challenges Appellants may have to the district court's (1) dismissal of the facial challenge to Section 61-17 under principles of Younger abstention and (2) the district court's decision to stay its decision on the Section 1983 claim until the Maine Supreme Judicial Court decided the City of Bangor's enforcement action against Diva's. See, e.g., Smilow v. Southwestern Bell Mobile Sys., Inc., 323 F.3d 32, 43 (1st Cir.2003) (Issues raised on appeal in a perfunctory manner (or not at all) are waived.). 33
34 The district court found that the Individual Appellees enjoyed both absolute and qualified immunity for their actions during the permitting process. The district court's justification for finding absolute immunity was that the City Council members had acted in both a quasi-judicial and legislative capacity. We agree that the officials enjoy absolute immunity from personal liability because they were acting in a quasi-judicial capacity when they denied the special amusement permit, and thus, we do not need to determine whether the officials are qualifiedly immune for their actions or whether they are absolutely immune because their actions were also legislative in nature. 35 We must take a functional approach to determining whether the City Council members are absolutely immune from suit for their denial of the special amusement permit. See Destek Group, Inc. v. State of N.H. Pub. Util. Comm'n, 318 F.3d 32, 40-41 (1st Cir.2003). And, even though the City Council members at various times may perform legislative, executive and judicial functions, each of which may entitle the official to a different level of immunity, the functional approach to immunity requires that actions taken in the performance of a particular function are to be accorded the level of immunity appropriate to that function.  Bettencourt v. Bd. of Registration, 904 F.2d 772, 782 (1st Cir.1990) (citing Scott v. Cent. Me. Power Co., 709 F.Supp. 1176, 1187 (D.Me.1989)) (emphasis in Scott ). 36 In Bettencourt, 904 F.2d at 783, we described the analysis for determining whether an official has engaged in a quasi-judicial act: 37 Proper analysis involves answering three questions, each designed to determine how closely analogous the adjudicatory experience of a Board member is to that of a judge. First, does a Board member, like a judge, perform a traditional adjudicatory function, in that he decides facts, applies law, and otherwise resolves disputes on the merits (free from direct political influence)? Second, does a Board member, like a judge, decide cases sufficiently controversial that, in the absence of absolute immunity, he would be subject to numerous damages actions? Third, does a Board member, like a judge, adjudicate disputes against a backdrop of multiple safeguards designed to protect [the complaining party's] rights? 38 Here, first, the Council members performed an adjudicatory function when they reviewed and voted on Diva's special amusement permit: they held a hearing, heard testimony, asked questions, discussed the matter, made their decision, and then provided a written explanation of their reasoning. Second, the act of denying a special amusement permit can be controversial, and can prompt litigation, as it did in this case. Without the proper protection from personal liability, it would be extremely difficult to get people to serve as City Council members. Cf. Bogan v. Scott-Harris, 523 U.S. 44, 52, 118 S.Ct. 966, 140 L.Ed.2d 79 (1998) ([T]he threat of liability may significantly deter service in local government, where prestige and pecuniary rewards may pale in comparison to the threat of civil liability.). Lastly, there are procedural safeguards that operate to protect a special amusement permit applicant from the violation of its constitutional rights. Indeed, this case presents a perfect example: Diva's exercised its statutory right to (1) request a written explanation of the reasons justifying the Council's denial of the special amusement permit, see Bangor Code § 61-21, and (2) appeal the decision to the Bangor Board of Appeals, see Bangor Code § 61-24. As a result of the appeal, the faulty decision of the City Council was reversed, and Diva's received its special amusement permit. The process worked. And, if Diva's had lost its appeal to the Bangor Board of Appeals, it had recourse to the Maine state courts, see Bangor Code § 23-3H. 39 To the extent that the Appellants' amended complaint raises a claim against the Individual Appellees in their individual capacities, the district court was correct to grant their motion to dismiss, because the City Council members are absolutely immune in their personal capacities from a suit arising from their denial of the special amusement permit.
40 The district court next dismissed Cormier-Youngs as a plaintiff in the remaining Section 1983 claims. Article III of the Constitution confines the federal courts to deciding actual cases and controversies. Cotter v. City of Boston, 323 F.3d 160, 166 (1st Cir.2003). In order to establish Article III standing, a plaintiff must have a personal stake in the outcome of the controversy. Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962). And, [a]ctions to enforce corporate rights or redress injuries to [a] corporation cannot be maintained by a stockholder in his own name ... even though the injury to the corporation may incidentally result in the depreciation or destruction of the value of the stock. Pignato v. Dein Host, Inc., 835 F.2d 402, 406 (1st Cir.1987) (quoting Brictson v. Woodrough, 164 F.2d 107, 109 (8th Cir.1947)). This standing rule applies even when there is only one shareholder in a corporation. See id. And, although we have not yet had the opportunity to explicitly state, we join the circuits who have already addressed the issue to hold that this standing requirement also applies to actions brought to redress injuries to a corporation under Section 1983. See Potthoff v. Morin, 245 F.3d 710, 717 (8th Cir.2001) (holding that the shareholder standing rule applies to civil rights actions brought pursuant to § 1983); Flynn v. Merrick, 881 F.2d 446, 450 (7th Cir.1989) (holding that filing suit under § 1983 does not diminish the requirement that the shareholder suffer some individual, direct injury.); Gregory v. Mitchell, 634 F.2d 199, 202 (5th Cir.1981) (extending shareholder standing rule to civil rights actions under § 1983); Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969) (finding nothing in the Civil Rights Act which would permit a plaintiff-stockholder to circumvent the rule that even though a stockholder owns all, or practically all, of the stock in a corporation, such a fact of itself does not authorize him to sue as an individual). 41 Here, Appellant Cormier-Youngs does not allege any injury, separate from the injury to Diva's, resulting from her claim that the Appellees violated Section 1983 when they acted under color of state law to deny Diva's the special amusement permit in violation of the First and Fourteenth Amendments. As the district court correctly determined, once it dismissed all but the Section 1983 claim of the second amended complaint, Appellant Cormier-Youngs no longer had Article III standing. We affirm the dismissal of Cormier-Youngs as a plaintiff in the remaining Section 1983 claim.
42 After the Maine Supreme Judicial Court rendered its decision, the federal district court requested submissions on the effect of the decision on the pending federal case, and then dismissed the remaining Section 1983 claim under the Rooker-Feldman doctrine. The federal district court held that the Rooker-Feldman doctrine prevented it from ruling on Diva's federal claim because a decision in favor of Diva's would effectively defeat or negate a state judgment to which the federal claimant was a party. 43 After this court heard argument and took this case under advisement, the Supreme Court decided Exxon Mobil Corp. v. Saudi Basic Indus. Corp., ___ U.S. ___, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). In Exxon Mobil , the Supreme Court cautioned that the Rooker-Feldman doctrine is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments. Id. at 1521-22. And, the Court held that neither Rooker nor Feldman supports the notion that properly invoked concurrent jurisdiction vanishes if a state court reaches judgment on the same or related question while the case remains sub judice in a federal court. Id. at 1527. 44 The Rooker-Feldman doctrine does not apply in this case because Diva's filed its case in federal court before the enforcement action was filed against it in state court. And, Diva's was not seeking an appeal of a state court judgment in federal district court, but instead was, among other things, seeking redress for the City Council's arbitrary and capricious denial of the special amusement permit for impermissible reasons. Thus, it was an error for the district court to invoke the Rooker-Feldman doctrine to dismiss Appellant Diva's remaining Section 1983 claim. 45 Our inquiry does not end, however, with the determination that the federal district court erroneously invoked the Rooker-Feldman doctrine, as we may uphold the dismissal on any ground supported by the record. See Wilson v. Town of Mendon, 294 F.3d 1, 10 n. 23 (1st Cir.2002). In our review of whether there is an alternate ground to support the dismissal, we find our jurisprudence on damages resulting from delays caused by the improper denial of building permits instructive. In Chiplin Enters. v. City of Lebanon, 712 F.2d 1524, 1526-28 (1st Cir.1983), we held that a building developer who had to wait five years between the denial of a building permit and the determination that the permit had been improperly denied, could not state a Section 1983 claim for deprivation of either substantive or procedural due process. Taking all facts alleged as true, even though the plaintiff had met all legal requirements for the permit and the town had no valid reason to reject the application and that defendants maliciously den [ied] [plaintiff] a building permit for invalid and illegal reasons and in bad faith, we held that the plaintiff could not state a valid Section 1983 claim. Id. at 1526. We found that even though the conduct complained of was concededly carried out under the color of state law, the plaintiff could not identify a constitutional right of which [he] ha[d] been denied. Id. at 1527. This is because property is not denied without due process simply because a local planning board rejects a proposed development for erroneous reasons or makes demands which arguably exceed its authority under the relevant state statutes. Creative Env'ts, Inc. v. Estabrook, 680 F.2d 822, 832 n. 9 (1st Cir.1981). 46 But, although an erroneous denial of a permit for the use of property does not amount to a denial of due process, it may, in certain circumstances, give rise to genuine constitutional issues. Chiplin, 712 F.2d at 1527. In Packish v. McMurtrie, 697 F.2d 23, 25-26 (1st Cir.1983), we held that a firefighter who had initially been denied reimbursement for medical expenses, allegedly in retaliation for his published criticism of town officials, and who sought damages for the delay in receiving the reimbursement, could not state a claim for denial of due process, but might have viable claims if [he] could in fact demonstrate that [he] was denied indemnification in retaliation for his exercise of his First Amendment rights. Similarly, in Manego v. Cape Cod Five Cents Sav. Bank, 692 F.2d 174, 177 (1st Cir.1982), we found that the plaintiff had stated a claim under Section 1983 because he alleged that the reason for the denial of an entertainment license was based on race — even though this was a claim the plaintiff ultimately could not prove. Furthermore, in Nestor Colon Medina & Sucesores, Inc. v. Custodio, 964 F.2d 32, 40 (1st Cir.1992), we considered whether the denial of a land use permit in unjustifiable retaliation for the applicant's expressions of his political views is a First Amendment violation, and found, at least with respect to one of the plaintiff's claims, that summary judgment was inappropriate because plaintiff had stated a prima facie case of denial in retaliation for his political expressions. Id. at 41. 47 Here, even though Bangor Code Section 61-17 has been determined by the Maine Supreme Judicial Court to be constitutional on its face, and, even though Diva's cannot state a claim for a violation of procedural or substantive due process, we believe that Diva's has stated a claim that the City of Bangor and the Individual Appellees in their official capacities acted under color of state law to deprive Diva's of its First Amendment right to freedom of speech. We caution, however, that the First Amendment right that is implicated here is not the right for Diva's to allow nude dancers on its premises, 16 but for Diva's right, if any, to offer dancing that is consistent with the type of dancing permitted under Section 61-17. We also caution that if the district court on remand determines that the City Council did act arbitrarily and capriciously with the intent of depriving Diva's of its First Amendment right to free speech, the only available damages are those incurred by Appellant Diva's during the three week period from when the City Council denied the permit, to when the Bangor Board of Appeals reversed that decision and granted the permit. We express no opinion on whether Diva's can ultimately prove her claim.