Opinion ID: 2490
Heading Depth: 3
Heading Rank: 1

Heading: Did Spinelli Have A Protected Property Interest In Her Gun Dealer License?

Text: To succeed on a claim of procedural due process deprivation under the Fourteenth Amendmentthat is, a lack of adequate notice and a meaningful opportunity to be hearda plaintiff must first establish that state action deprived him of a protected property interest. Sanitation, 107 F.3d at 995. Property interests that are protected by the Due Process Clause of the Fourteenth Amendment are not created by that amendment; they are defined by existing rules or understandings that stem from an independent source such as state law. Bd. of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). When alleging a property interest in a public benefit, the plaintiff must show a legitimate claim of entitlement to such interest that is grounded in established law. Id. The district court believed that, because the City had broad discretion over whether to grant or deny Olinville's gun dealership license, Spinelli had no protected property interest in the license, and thus her due process claim could not succeed. We do not agree. While a person does not have a protected interest in a possible future [business] license, Sanitation, 107 F.3d at 995, the situation changes once the license is obtained, see Dwyer v. Regan, 777 F.2d 825, 830-31 (2d Cir.1985). While a possible future license involves a purely speculative property interest, once the government has granted a business license to an individual, the government cannot depriv[e] [the individual of] such an interest... without 14 appropriate procedural safeguards. Arnett v. Kennedy, 416 U.S. 134, 167, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974) (Powell, J., concurring in part). See Bell v. Burson, 402 U.S. 535, 539, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971) (Once licenses are issued, ... their continued possession may become essential in the pursuit of a livelihood.). Although there may be no protected property interest where the licensor has broad discretion to revoke the license, see Bach v. Pataki, 408 F.3d 75, 80-81 (2d Cir.2005), here, such discretion was carefully constrained. The relevant regulations provided that, under specific circumstances, the City could revoke or suspend Spinelli's gun dealer license, 38 RCNY § 404( l ), but the City did not have unfettered discretion to do so. Unlike the gun carrier permits in the cases cited by the district court, see Bach, 408 F.3d 75; Potts v. City of Phila., 224 F.Supp.2d 919 (E.D.Pa.2002), over which the government had considerable discretion to suspend or revoke a license, Bach, 408 F.3d at 79, the City's discretion in this case was cabined by the regulations' good cause requirement, see 38 RCNY § 4-04( l ). See, e.g., Dwyer, 777 F.2d at 827 (plaintiff's employment could only be terminated for incompeten[ce] or misconduct). Where a license can be suspended only upon a satisfactory showing of misconduct, the licensee has a property interest in his license sufficient to invoke the protection of the Due Process Clause. Barry v. Barchi, 443 U.S. 55, 64, 99 S.Ct. 2642, 61 L.Ed.2d 365 (1979); see Richardson v. Town of Eastover, 922 F.2d 1152, 1157 (4th Cir. 1991) ([A] state-issued license for the continued pursuit of the licensee's livelihood, renewable periodically on the payment of a fee and revocable only for cause, creates a property interest in the licensee.). Thus, the district court erred in holding that Spinelli did not have a property interest in her gun dealer license that could be protected by the Due Process Clause.