Court Opinion

ID: 613234
Source: CourtListenerOpinion
Date Created: 2011-09-07 13:53:55+00
Date Added: 2024-06-11T17:50:23.953767
License: Public Domain

Case: 10-60968     Document: 00511592281         Page: 1     Date Filed: 09/02/2011

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                        September 2, 2011

                                       No. 10-60968                        Lyle W. Cayce
                                                                                Clerk

VINEYARD INVESTMENTS, L.L.C.,

                                                  Plaintiff-Appellant
v.

THE CITY OF MADISON, MISSISSIPPI,

                                                  Defendant-Appellee

                   Appeal from the United States District Court
                     for the Southern District of Mississippi
                             USDC No. 3:09-CV-354

Before REAVLEY, GARZA, and GRAVES, Circuit Judges.
PER CURIAM:*
        Appellant Vineyard Investments, LLC appeals the district court’s entry of
judgment in favor of Appellee City of Madison, Mississippi, on Vineyard’s claims
pursuant to 42 U.S.C. § 1983 that Madison’s refusal to grant Vineyard a building
permit violated Vineyard’s federal constitutional rights to substantive due
process, equal protection of the law, and freedom from tortious interference with
contract. We affirm.

        *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
   Case: 10-60968    Document: 00511592281     Page: 2     Date Filed: 09/02/2011

                                  No. 10-60968

                                        I.
      Vineyard entered into a lease for property in a shopping center in Madison
with the intention of opening a package retail wine and spirits store and applied
for a building permit for improvements to the rental property. Existing tenants
of the shopping center met with Madison’s Mayor to express their concerns about
the over-concentration of wine and spirits stores if a second package retail wine
and spirits store were to be located in the same center, and the proximity of the
store to two businesses whose clientele consisted mainly of families with
children. In response, the Mayor froze Vineyard’s building permit to allow her
and the City’s Board of Aldermen a chance to examine all of the issues raised by
having a second liquor store in the same shopping center. Additionally, the
Board of Aldermen issued a resolution opposing Vineyard’s application for a
liquor permit because (1) granting Vineyard a permit would not be in the best
interest of the City; (2) a concentration of package wine and spirit retailers was
not desirable for the welfare of the City; and (3) the use of the property for a
package wine and spirits retailer was not consistent with the overall land use
goals and planning for the community.
      Around the same time, Vineyard requested that its building permit
application be placed on the agenda of the regular meeting of the Board of
Aldermen and the Mayor. At the meeting, an association of merchants voiced
their opposition to Vineyard’s building permit because having two liquor stores
in the same center, especially with Vineyard’s proposed location being close to
a children’s craft store and children’s learning center, was detrimental to the
“family” clientele   the merchants wanted to attract.           The Board voted
unanimously to deny Vineyard’s building permit until after the state had
determined whether to issue a liquor license for Vineyard. Vineyard timely
sought review of the decision in the Madison County Circuit Court pursuant to
a bill of exceptions provided for under Mississippi law.

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                                 No. 10-60968

      Before the Circuit Court ruled on Vineyard’s exceptions to the denial of the
building permit, the state conducted a hearing on the liquor license. The Mayor
testified at the hearing and opposed the liquor license for the same reasons the
City outlined in its resolution. She argued that having two liquor stores in the
same shopping center could cause economic hardship to the community because
one store could drive the other store out of business, creating a vacancy and
giving the impression of poor economic health. The association of merchants
also opposed the issuance of a liquor license for Vineyard, citing the same
reasons they gave before the meeting of the Board of Alderman—saturation of
the market and proximity to businesses serving mainly families with children.
Despite the testimony of the Mayor and the association, the state issued
Vineyard a liquor license. The record is unclear on whether Vineyard renewed
its application for a building permit at this point. In any event, no building
permit was issued.
      The Madison County Circuit Court upheld the City’s denial of a building
permit. But the Mississippi Court of Appeals reversed the lower court and held
that state law did not grant the City the discretion to deny the building permit,
except for specific grounds not present in this case. Vineyard Invs., LLC v. City
of Madison, 999 So. 2d 438, 441–42 (Miss. Ct. App. 2009). The Court of Appeals
expressly did not reach the constitutional questions raised by Vineyard. Id.
However, the Court’s ruling was a pyrrhic victory for Vineyard, which was
unable to procure another lease with the owner to replace the lease that had
lapsed during the permitting process.
      Vineyard filed the instant suit pursuant to 42 U.S.C. § 1983, alleging that
the City’s actions had violated Vineyard’s rights to substantive due process,
equal protection of the law, and freedom from tortious interference with business
relations. The parties filed cross-motions for summary judgment. The district
court, in a well-reasoned opinion, granted summary judgment for the City and

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                                  No. 10-60968

denied Vineyard’s motion for summary judgment. Judgment was entered for the
City. Vineyard timely filed its appeal, and we have jurisdiction pursuant to
28 U.S.C. § 1291.
                                        II.
      “We review a district court’s grant of summary judgment de novo and
apply the same standards as the district court.” Hernandez v. Yellow Transp.,
Inc., 641 F.3d 118, 124 (5th Cir. 2011). A “court shall grant summary judgment
if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).
      Vineyard first argues that the district court improperly granted summary
judgment on its substantive due process claim because the district court imputed
the City’s stated reasons for opposing Vineyard’s liquor license to the City’s
denial of Vineyard’s building permit. In opposing Vineyard’s liquor license, the
City argued that opening two retail package wine and spirits stores in the same
shopping center was not in the best interest of the City, and that the store would
be in close proximity to businesses mainly patronized by families with children.
The district court used these reasons in its rational basis review of the denial of
the building permit. Vineyard contends that the district court should not have
used those reasons because the only reason the City stated for denying the
building permit was that Vineyard did not yet have a liquor license. Since the
Mississippi Court of Appeals found that the City could not, based on Mississippi
law, deny the building permit for that reason, Vineyard argues that reason is
arbitrary and capricious per se and, thus, the City’s denial of the building permit
cannot survive rational basis review. This argument is unpersuasive.
      First, the summary judgment record before the district court contained the
deposition testimony of the Mayor, who did not draw the artificial line Vineyard
suggests between the reasons for the denial of the building permit and the
opposition to the liquor license. The district court quite rightly interpreted the

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                                 No. 10-60968

record to demonstrate that the denial of the building permit was merely one
mechanism through which the City opposed the presence of the second liquor
store for all of the articulated reasons. And second, the Court of Appeals’
holding that the City could not, pursuant to state law, deny the building permit
because Vineyard lacked a liquor license does not automatically characterize the
City’s action as arbitrary and capricious. We have explained that the United
States Constitution does not require that a local government interpret its own
law correctly because “[t]he power to decide, to be wrong as well as right on
contestable issues, is both privilege and curse of democracy.”       FM Props.
Operating Co. v. City of Austin, 93 F.3d 167, 174 (5th Cir. 1996) (internal
quotation omitted). Instead, we require that a local government’s action be
“rationally related to a legitimate government interest.” Id. Which brings us to
Vineyard’s second substantive due process argument—that even assuming
arguendo that the district court correctly identified the City’s reasons for
denying the building permit, those reasons do not satisfy rational basis review.
      Assuming without deciding that Vineyard had a property interest in the
building permit and that the City’s building permit determination is considered
adjudicative for the purposes of the standard of review, the City’s action was
rationally related to a legitimate government interest. When reviewing an
adjudicative action, we look to the record to determine the actual motivation for
the conduct. Mahone v. Addicks Util. Dist. of Harris County, 836 F.2d 921, 934
(5th Cir. 1988). The record is clear that the City was concerned with the effect
of having a second liquor store in the same shopping center. The City reiterated
this concern throughout the process and subsequently passed an ordinance
amending the zoning order to restrict liquor stores. Having identified the City’s
actual interest in denying the permit, we proceed to apply traditional rational
basis review to the action.

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                                  No. 10-60968

      First, we determine whether the City’s interest—the deleterious effects of
having a second liquor store in the same shopping center—is considered a
legitimate government interest.       It is.   Although the outer limits of a
municipality’s police power has not been defined, the ability to make
determinations for the economic welfare of its citizens falls comfortably within
the scope of legitimate exercises of that power. FM Props., 93 F.3d at 175 n.9.
We therefore examine whether the City’s action of denying a building permit to
Vineyard advanced its legitimate goal of protecting the economic well-being of
its citizens.   The connection between possible economic hardships and a
deterioration of community values, and the presence of a second liquor store
within a small geographic area is at least debatable, satisfying the necessary
rational relationship.   See id at 175 (as long as “the existence of a rational
relationship between” the City’s action and the City’s goal “is at least debatable”
there is no constitutional violation). The City did not violate Vineyard’s right to
substantive due process when it denied Vineyard’s application for a building
permit.
      Vineyard next argues that the City violated its right to equal protection
by denying it a building permit. Vineyard argues that it qualifies for the class-
of-one theory of equal protection, which protects an individual from being
(1) “intentionally treated differently from others similarly situated;” with (2) “no
rational basis for the difference in treatment.” Engquist v. Oregon Dept. of
Agric., 553 U.S. 591, 601, 128 S. Ct. 2146, 2153 (2008) (internal quotation
omitted). Vineyard’s argument fails in its inception because Vineyard cannot
show that it was similarly situated to others. No other individuals attempted
to open liquor stores within the same shopping center as another liquor, nor with
the passing of the new City ordinance will one ever be allowed to do so.
Vineyard argues that shopping centers frequently have two restaurants, both
with liquor licenses. However, even assuming that a restaurant and a liquor

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                                    No. 10-60968

store are similar for this inquiry, the difference in treatment is rationally based.
The Mayor explained in her deposition testimony that unlike liquor stores,
restaurants in close proximity attract customers to each other, citing food courts
as a good example of this phenomenon.              Thus, Vineyard has failed to
demonstrate an equal protection violation.
         Vineyard last argues that the City violated its constitutional right to be
free from tortious interference with contract. “To state a claim under § 1983, a
plaintiff must allege facts showing that a person, acting under color of state law,
deprived the plaintiff of a right, privilege or immunity secured by the United
States Constitution or the laws of the United States.” Bryant v. Military Dep’t
of Miss., 597 F.3d 678, 686 (5th Cir. 2010). Vineyard has demonstrated no
federally protected right to be free from tortious interference with business
opportunity. The sole case that Vineyard cites for this proposition is inapposite
because it merely analogized the damage calculations for a tortious interference
claim but found liability based on an equal protection claim. See Cordeco Dev.
Corp. v. Santiago Vasquez, 539 F.2d 256, 260–61 (1st Cir. 1976). Additionally,
Vineyard cannot rely on its alleged property interest in the building permit
because that interest is protected by its right to due process, not some other
right.
         AFFIRMED.

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