Opinion ID: 569110
Heading Depth: 2
Heading Rank: 3

Heading: motions in the district court

Text: 15 The City filed pretrial motions to dismiss and for summary judgment which were partially successful as the district court ultimately dismissed the equal protection, RICO and 42 U.S.C. §§ 1985 and 1986 conspiracy claims against it, though it would not dismiss the due process and taking claims. The court determined that the parties agreed that the City maintained a long-standing policy to apply police and neighborhood approval to dance hall licensing, a policy the court considered might support municipal liability under 42 U.S.C. § 1983. The court, however, did not decide whether neighborhood objections are a valid legal basis upon which to deny a dance hall license, instead leaving that question to the jury to answer. It did state that the appellees had property interests in receipt of the dance hall licenses if they satisfied the objective criteria required for dance hall licensing, relying on Winsett v. McGinnes, 617 F.2d 996, 1007 (3d Cir.1980) (in banc), cert. denied, 449 U.S. 1093, 101 S.Ct. 891, 66 L.Ed.2d 822 (1981) and Second & Ashbourne Associates v. Cheltenham Township, No. 88-6400 (E.D.Pa. July 28, 1989) (available at 1989 WL 86602). It said that the appellees met the objective rules, regulations, ordinances and laws for licensing and that L & I ultimately did issue a license to After Midnight. 3 It thus concluded that the right to approval of the licenses was a property interest. 16 The court noted that substantive due process included the right to be free from arbitrary government action and that arbitrariness turned on whether the government action was rationally related to the furtherance of a legitimate government interest. Again, the court concluded that a jury should resolve the question of whether the requirement of community and police approval for the licensing furthered a valid governmental interest or was simply an arbitrary and irrational supplement to the applicable objective criteria. Turning to the procedural due process claims, the court concluded that the availability of an appeal to the Review Board of L & I's decision did not establish, as a matter of law, that the City's procedure was constitutional as provided or applied and the court therefore denied the City summary judgment on the due process claims. On the unconstitutional taking of property claims, the court determined that the property taken was the appellees' reasonable, distinct, investment backed expectations in their dance halls. The appellees alleged that their investments for renovation, based on the expectation that they would obtain licenses when the governmental requirements were met, were lost when the City denied their applications for dance hall licenses. The court rejected the City's argument that the appellees had not lost the beneficial use of their properties. 17 The district court dismissed the RICO claims against the City and Tayoun, who also moved for a pretrial dismissal, by order entered July 24, 1990. The appellees do not appeal this dismissal insofar as it involved the City and thus we do not describe these claims against it further. 4 The court held that Tayoun's actions did not constitute racketeering activity under the statute and thus the appellees did not adequately plead the RICO count. Appellees cross-appeal from the dismissal as to Tayoun. 5 18 As we have noted, the jury returned a verdict against the City on the procedural and substantive due process and taking claims, but found it was not liable for intentional race discrimination. The City then moved for a judgment notwithstanding the verdict, or for a new trial, arguing that there was insufficient evidence to support the jury's verdict that it had denied appellees' due process rights or had unconstitutionally taken their property. 6 The City also contended that the district court erred as a matter of law when it submitted the issues of substantive and procedural due process and unconstitutional taking to the jury. Finally, the City challenged the submission of certain damage claims to the jury. 19 In its opinion denying the motion, the district court insisted that it, not the jury, had decided that the appellees had property rights in the dance hall licenses. Thus, it had charged the jury that the appellees had property rights in the dance hall licenses and, although the City objected to the initial charge on this point, it later agreed to the language of the re-charge and did not object. The district court then concluded that there was sufficient evidence to support the jury's finding that Down South had satisfied all the objective criteria for obtaining a license. The court, without elaboration, rejected the City's contention that determination of whether the City's procedures were constitutionally adequate was a question of law for the court. It stated that there was evidence that the City told the appellees it would not consider community objections but, after the appellees appeared for their hearing without evidence, based its decision on that exact criterion. 20 Likewise, it concluded that there was evidence that the City closed Down South and rendered it financially unable to pursue the appeals process and that this conduct denied it procedural due process. Additionally, the court concluded that the evidence supported the jury's verdict on unconstitutional taking of property. Finally, the court rejected the City's contention that it had submitted questions of law to the jury. The court explained that many issues of material fact were unresolved and required the jury's consideration. The court insisted that it did not ask the jury to determine the constitutionality of the Dance Hall Act nor interpret that statute; rather, it stated that it instructed the jury to determine whether the City acted arbitrarily and irrationally regardless of whether the City violated the Dance Hall Act. It also concluded that a remittitur would be inappropriate. Thus, the City's post-trial motion was denied in its entirety.