Court Opinion

ID: 19789
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:27:50+00
Date Added: 2024-06-11T16:46:52.688934
License: Public Domain

UNITED STATES COURT OF APPEALS
                            FOR THE FIFTH CIRCUIT
                            _____________________

                                 No. 98-20497
                            _____________________

                           HC GUN & KNIFE SHOWS, INC.,
                 d/b/a High Caliber Gun & Knife Shows, Inc.,
                    TODD BEAN, individually and d/b/a High
                        Caliber Gun & Knife Shows, d/b/a
                     High Caliber Gun & Knife Shows, Inc.,

                                                      Plaintiffs-Appellees,

                                   versus

                              CITY OF HOUSTON,

                                             Defendant-Appellant.
_________________________________________________________________

           Appeal from the United States District Court
                for the Southern District of Texas
_________________________________________________________________
                         January 20, 2000

Before DUHÉ, BARKSDALE, and DENNIS, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

         Primarily at issue is whether Texas law preempts a City of

Houston ordinance regulating gun shows conducted on city property.

The City contests the partial summary judgment granting declaratory

and injunctive relief to HC Gun & Knife Shows, Inc., and Todd Bean,

individually and d/b/a High Caliber Gun & Knife Shows; the judgment

on   a    jury    verdict   awarding   lost    profits     to   Appellees;   and

attorney’s fees awarded Appellees.            We AFFIRM.

                                       I.

         Bean and his successor corporation (Appellees) have held gun

and knife shows since 1988.            From 1990 until late 1993, they

conducted ten at the City’s George R. Brown Convention Center (the

center).
       In June 1993, the Houston City Council passed an ordinance

requiring all persons attending gun shows at city-owned facilities,

inter alia:        (1) to sign a form declaring the firearms in their

possession (registration requirement); and (2) for all firearms

brought to such shows, to either remove the firing pins or install

key-operated trigger locks (disabling requirement).                      HOUSTON, TEX.

CODE   OF   ORDINANCES § 12-24.

       Bean conducted three shows at the center in 1993, but canceled

the fourth, scheduled for that December, because of the ordinance’s

registration and disabling requirements. No shows were held at the

center between December 1993 and March 1997.

       In January 1996, Appellees filed this action in state court,

alleging        that     the   ordinance’s       registration      and     disabling

requirements effectively prevented them from holding shows on city-

owned property:          the registration requirements would cause delay,

expense, and impositions that would deter attendance; removal of

the firing pins would damage many of the guns shown and traded at

the    shows;     and    installation    of   trigger      locks   would     be   cost

prohibitive        and   result    in   delays    that    would    greatly     reduce

attendance.        The City removed this action to federal court.

       In early 1997, the district court denied summary judgment for

the City and granted partial summary judgment for Appellees.

Declaratory relief was premised on the ordinance being preempted by

TEX. LOCAL GOV’T CODE          §   215.001,   which      prohibits,   inter       alia,

municipal regulation of the “transfer, private ownership, keeping,

transportation, ... or registration of firearms”; and on the

                                          2
ordinance being violative of the commercial speech protections

guaranteed by the United States and Texas Constitutions.            The City

was permanently enjoined from enforcing the ordinance.

     Following a trial on damages that May, the jury awarded

$329,000    for   lost   profits.   In    addition,   the   court   awarded

Appellees $54,442 (stipulated amount) for attorney’s fees and

expenses.

                                    II.

     The City contends that the preemption and commercial speech

holdings are erroneous; that the court abused its discretion by

refusing to order production of documents relating to, and by

excluding evidence of, Appellees’ gross revenues and expenses,

including with respect to shows conducted outside the Houston area;

that the evidence is insufficient to support the verdict; and that,

because the judgment must be reversed, so must the fees award.

                                    A.

     The summary judgment is reviewed de novo, pursuant to the same

standard applied by the district court.         E.g., Drake v. Advance

Const. Service, Inc., 117 F.3d 203, 204 (5th Cir. 1997).              It is

proper when the summary judgment record, viewed in the light most

favorable to the non-movant, establishes that “there is no genuine

issue as to any material fact and ... the moving party is entitled

to a judgment as a matter of law”.         FED. R. CIV. P. 56(c); Drake,
117 F.3d at 204.

     The ordinance requires applicants seeking to use the center

for gun shows to execute an agreement which includes, inter alia,

                                     3
covenants (1) to provide and compensate off-duty City police

officers to provide security for the show; (2) that all persons in

attendance will be required to sign a form declaring all weapons in

their possession; and (3) to comply with the city’s regulations,

which require either the removal of firing pins or the installation

of trigger locks on all firearms brought into the facility.1

     1
      The ordinance states, in pertinent part:

               (a) Each approved applicant for the use
          of a facility to conduct a gun show shall be
          required to execute a special form of
          occupancy agreement that incorporates the
          requirements generally applicable to the
          rental of facilities and the additional
          requirements established in this section. The
          agreement shall include:

               (1)  A covenant to provide a specified
                    minimum number of off-duty city
                    police   officers   who   shall   be
                    compensated solely at the occupant’s
                    expense and shall provide
security for the gun show; the number shall be approved by the
director and shall at least be based upon the number of expected
exhibitors, the expected number of patrons and the size of the area
to be leased;

               ....

               (3)    A covenant that all persons who
                      attend the gun show will be required
                      to sign a form approved by the city
                      attorney setting forth a declaration
                      of weapons in their possession, if
                      any,    and     expressing     their
                      understanding         of      their
                      responsibilities     relating     to
                      possession, use and access to any
                      firearms and ammunition at the gun
                      show;

               (4)    A covenant to comply with and
                      enforce   the   public    gun   show
                      regulations of the city, which shall
                      include,   without   limitation,   a

                                  4
      The Texas statute, TEX. LOC. GOV’T CODE ANN. § 215.001, held by

the   district       court       to   preempt   the      ordinance,       prohibits

municipalities from regulating, inter alia, “the transfer, private

ownership,    keeping,        transportation,      ...    or   registration     of

firearms”.2

                           requirement that no firearm may be
                           brought into any exhibit area of any
                           facility    without   first    being
                           inspected by a city police officer
                           ... who shall verify that each
                           firing pin has been removed from the
                           firearm, or alternatively, the city
                           police officer may install a trigger
                           lock upon the firearm if it is of
                           such a design that the firing pin(s)
                           may not be removed by any procedure
                           that will not cause permanent damage
                           to the firearm, provided that the
                           city police officer shall retain the
                           key to the lock and the lock shall
                           not be removed from the firearm
                           until the firearm is checked out of
                           the exhibit area....

HOUSTON, TEX. CODE   OF   ORDINANCES § 12-24.
      2
       The statute provides, in pertinent part:

                (a) A    municipality   may   not   adopt
           regulations relating to the transfer, private
           ownership, keeping, transportation, licensing,
           or registration of firearms, ammunition, or
           firearm supplies.

                (b) Subsection (a) does not affect the
           authority a municipality has under another law
           to:
                     ....

                      (2) regulate the discharge                   of
                 firearms within the limits of                    the
                 municipality;

                           ....

                           (6)    regulate   the   carrying     of    a

                                         5
     The City’s brief devotes less than four pages (one of which is

devoted to quoting § 215.001) to preemption. Essentially, the City

contends that the ordinance is not preempted by § 215.001(a),

because, rather than restricting the transfer, private ownership,

keeping, transportation, licensing, or registration of firearms,

the ordinance is instead a valid exercise of the City’s authority,

under § 215.001(b)(2), to regulate the discharge of firearms within

the city limits.

     The district court rejected this contention, reasoning that,

although the ordinance’s disabling requirement (removal of firing

pins or installation of trigger locks) prevents the discharge of

firearms, the ordinance also seeks to regulate the transfer,

private ownership, or keeping of firearms, which is prohibited by

                firearm by a person other than a person
                licensed to carry a concealed handgun
                under   Subchapter   H,  Chapter   411,
                Government Code, at a:

                           (A)    public park;

                          (B) public    meeting            of   a
                     municipality,   county,  or            other
                     governmental body;

                          (C) political rally, parade,
                     or official political meeting; or

                          (D) n o n f i r e a r m s - r e l a t e d
                     school, college, or professional
                     athletic event.

               (c) The exception provided by Subsection
(b)(6) does not apply if the firearm is in or is carried to or from
an area designated for use in a lawful hunting, fishing, or other
sporting event and the firearm is of the type commonly used in the
activity.

TEX. LOC. GOV’T CODE ANN. § 215.001.

                                    6
§ 215.001(a).      It concluded that, through the ordinance, the City

“attempts to occupy all but a hair’s width of the entire field of

the   regulation         of       gun        shows”;        and     that,     if    the      City’s

interpretation       of       §    215.001(b)(2)             (discharge-exception)            were

accepted, it would “swallow[] the general rule preempting municipal

regulation of firearms”.                We agree.

      The   City    does          not    address       the        ordinance’s      registration

requirement;       nor    does          it    make     any        attempt    to     defend    that

requirement as a regulation relating to firearms-discharge. In any

event,   pursuant        to       our    review        of    whether        the    ordinance    is

preempted, it is obvious that the registration requirement is not

related to preventing such discharge.                        Therefore, the ordinance is

not authorized by § 215.001(b)(2).                           Moreover, the registration

requirement is expressly preempted by § 215.001(a).

      In district court, the City maintained that the disabling

requirement    was       authorized           by   §    215.001(b)(6),            which   permits

municipal regulation of the conduct of persons in certain public

places; and that the ordinance is an exception to the City’s more

restrictive ban on possession of all firearms on city premises.

But, the City does not make those contentions here and, therefore,

has abandoned them.               See Yohey v. Collins, 985 F.2d 222, 224-25

(5th Cir. 1993).

      Instead, the City relies on a Texas Attorney General opinion

that a different ordinance, HOUSTON, TEX. CODE                         OF   ORDINANCES § 28-47,

which makes it unlawful for a child to discharge a firearm within

the City limits, is not preempted by § 215.001(a).                                Op. Tex. Att’y

                                                   7
Gen. No. 94-56 (1994).       Unlike the ordinance now at issue, the

ordinance   addressed   by   the   Attorney       General    prohibited      only

firearms-discharge; it did not impose registration or disabling

requirements such as those now at issue.

     In sum, based on our review of the summary judgment record,

the ordinance is preempted by TEX. LOC. GOV’T CODE ANN. § 215.001(a);

it is not authorized by the discharge-exception in subpart(b)(2).

Because we so hold, we need not reach the federal and state

commercial speech constitutional issues.                See County Court of

Ulster County, N.Y. v. Allen, 442 U.S. 140, 154 (1979) (court has

“strong duty to avoid constitutional issues that need not be

resolved in order to determine the rights of the parties to the

case under consideration”).

                                     B.

     The City moved for summary judgment in April 1996; Appellees,

that May.   By a May scheduling order, the discovery deadline was

early January 1997, with trial in late March.               In late November

1996, the parties moved jointly to extend the discovery deadline

until the end of February 1997; the motion was granted in early

December.

     In mid-January 1997, the City requested documents related to

all gun shows conducted by Appellees.             But, one week later, they

were awarded partial summary judgment.                  Accordingly, in mid-

February,   the   parties’   joint       motion    to    limit   discovery    to

Appellees’ damages was granted.

                                     8
      In early March, one week after the discovery deadline, the

parties moved jointly to continue trial.               On 13 March, it was

continued until mid-May.

      That same day (13 March), Appellees moved for a protective

order,   contesting   the    relevancy     of    the   requested   documents

pertaining to non-Houston shows.         On 31 March, the City moved to

compel document production and to amend the scheduling order; it

maintained that, in order to determine Appellees’ profit margins,

it was necessary to review documents related to all of their shows.

      On 29 April, the court granted the protective order and denied

the motion to compel.       Noting that the case was no longer at an

early stage of pre-trial discovery, and that the partial summary

judgment had narrowed discovery to damages for Appellees’ inability

to conduct shows at the center, the court held that the document

requests were overly broad, unreasonable, and unduly burdensome.

      On Thursday, 15 May 1997, only four days before trial set for

Monday, 19 May, the City moved to continue trial for 45 days,

claiming that it had received incomplete information to allocate

Appellees’ overhead expenses and income in order to calculate their

profit margin.    The continuance was denied at a hearing conducted

the   following   day.       At   trial,    the     City   repeatedly,   but

unsuccessfully, re-urged the relevance of the non-Houston evidence.

      In contending that it was prohibited from defending against

Appellees’ damages claims, the City presses its need for documents,

including income tax returns, relating to Appellees’ gross revenues

and expenses for non-Houston shows.             Therefore, it contests the

                                    9
adverse rulings on its motions to compel, for continuance, and for

judgment as a matter of law, as well as the non-Houston evidence

being excluded, and the protective order being granted.

     In sum, the damages issue is extremely limited.             For example,

the City does not contest the methodology employed by Appellees,

nor assert, as it did in district court, that, as a matter of Texas

law, lost profits could not be recovered under the circumstances

existing in this case.         Distilled, the issue relates only to

denied-evidence       wanted     for        challenging      lost      profits.

Concomitantly, as hereinafter discussed, the scope of our review is

narrow.

     The discovery, evidentiary, and no-continuance rulings are

reviewed for abuse of discretion.           E.g., Coughlin v. Lee, 946 F.2d
1152, 1158 (5th Cir. 1991) (discovery); Polanco v. City of Austin,

Tex., 78 F.3d 968, 982 (5th Cir. 1996) (evidentiary rulings);

Dorsey v. Scott Wetzel Servs., Inc., 84 F.3d 170, 171 (5th Cir.

1996) (continuance).       “A trial judge’s control of discovery is

granted great deference.”      Meadowbriar Home for Children, Inc. v.

Gunn, 81 F.3d 521, 534 n.12 (5th Cir. 1996).               We will reverse a

discovery ruling only if it is “arbitrary or clearly unreasonable”,

Mayo v. Tri-Bell Industries, Inc., 787 F.2d 1007, 1012 (5th Cir.

1986),    and   the   complaining   party      demonstrates     that    it   was

prejudiced by the ruling.      See Hastings v. North East Indep. School

Dist., 615 F.2d 628, 631 (5th Cir. 1980).             Similarly, unless an

erroneous evidentiary ruling substantially affects the rights of

the complaining party, the error is harmless.             FED. R. EVID. 103(a).

                                       10
     “When   the   question   for   the   trial   court   is   a   scheduling

decision, such as whether a continuance should be granted, the

judgment range is exceedingly wide, for, in handling its calendar

and determining when matters should be considered, the district

court must consider not only the facts of the particular case but

also all of the demands on counsel’s time and the court’s.”

Fontenot v. Upjohn Co., 780 F.2d 1190, 1193 (5th Cir. 1986).              We

will not “substitute our judgment concerning the necessity of a

continuance for that of the district court”, unless the complaining

party demonstrates that it was prejudiced by the denial.              Id. at

1194.

     The denial of judgment as a matter of law is reviewed de novo;

in so doing, we apply the same standard as did the district court;

and “[s]uch judgment is appropriate if, after viewing the trial

record in the light most favorable to the non-movant, there is no

‘legally sufficient evidentiary basis’ for a reasonable jury to

have found for the prevailing party”.       Hill v. International Paper

Co., 121 F.3d 168, 170 (5th Cir. 1997).

     Obviously, each of the challenged rulings turns, to a great

extent, on the relevance of Appellees’ non-Houston documents.

Discovery and evidence being limited to Houston revenues and

expenses was premised, inter alia, on the court’s conclusion that

the other data was not relevant to Appellees’ damages resulting

from inability to conduct shows at the center.            (As discussed, in

denying the motion to compel and granting the protective order, the

court also noted that the case was “no longer at an early stage of

                                    11
pretrial discovery”, and held that the discovery requests were

“overly broad, unreasonable, and unduly burdensome”.)

     Consistent with this limitation-basis, the court, in denying

judgment as a matter of law, rejected the City’s contention that

Appellees could not recover lost profits without evidence of their

total revenues and expenses.

     The City maintains that the desired evidence was relevant to

the profitability of Appellees’ business, alternate methods of

calculating lost profits, and mitigation of damages; and that the

evidence does not support the verdict because the lack of evidence

relating    to     total     gross     revenues       and       expenses    precluded

establishing entitlement to lost profits.                    We conclude that the

evidentiary, discovery, and no-continuance rulings were not an

abuse of discretion; and that the damages award is supported by

sufficient evidence.

     Before 1996, Bean, who lives approximately 30 minutes away

from the    center,    did    business     as    a   sole       proprietorship;    his

business was incorporated in 1996.              In essence, the business was a

three-person operation, headed by Bean.                   Other personnel, such as

security, were hired as necessary for a show.                     During the period

1992-97,    Bean    conducted        approximately         35    non-Houston      shows

annually.    He testified that, because of the ordinance, he was

precluded   from    presenting       13   shows      at    the    center;   and   that

presenting a show there was not precluded by his presenting a non-

Houston show on the same day.

                                          12
     Appellees sought damages only for lost profits resulting from

their inability, because of the ordinance, to conduct center-shows.

As noted, they did not claim that it affected their ability to

conduct shows in other markets, and did not seek to recover other

possible damages, such as for injury to business reputation, loss

of good will, or other potential harm related to non-Houston shows.

In its brief, the City has failed totally to demonstrate how the

evidence at issue is relevant to the awarded lost profits.

     In    any    event,    the   record      reflects     that    the    challenged

discovery, evidentiary, and no-continuance rulings did not preclude

the City from defending against the damages claim.                    In short, the

requisite prejudice is lacking.                Appellees presented evidence

pertaining to each of their Houston shows (both at the center and

at a private facility) before and after the ordinance was enacted.

The City cross-examined Bean about his calculation of profits and

expenses    for    each    of   those   shows,      and    about   his    method   of

allocating fixed expenses.              Concerning mitigation, the City’s

cross-examination of Bean established, for example, that he did not

seek to conduct shows at several other facilities in the Houston

area while the ordinance was in effect.                   In addition, the court

allowed the City, over Appellees’ objection, to elicit from Bean

the above-described number of non-Houston shows held annually, and

ruled     that    it   could    question      him   about     those      in   Biloxi,

Mississippi.

     The City’s assertion that the evidence does not support the

award is belied by the record, which includes not only Bean’s

                                         13
testimony, but extensive documentary evidence corroborating it. In

the light of the framing of this issue on appeal, the exclusion of

the non-Houston data does not undermine the sufficiency of that

evidence.   Restated, there is a legally sufficient evidentiary

basis for the awarded lost profits.

                                C.

     Because we affirm, the City’s only challenge to the fees award

(stipulated amount of $54,442) — that a reversal compels its

abrogation — fails.

                               III.

     For the foregoing reasons, the judgment is

                                                      AFFIRMED.

                                14