Court Opinion

ID: 9964628
Source: CourtListenerOpinion
Date Created: 2024-04-30 16:00:33.5588+00
Date Added: 2024-06-11T08:25:38.098101
License: Public Domain

FOR PUBLICATION

     UNITED STATES COURT OF APPEALS
          FOR THE NINTH CIRCUIT

DIAMOND S.J. ENTERPRISE,                         No. 20-15085
INC., DBA S. J. Live,
                                                   D.C. No.
                 Plaintiff-Appellant,           5:18-cv-01353-
                                                     LHK
    v.

CITY OF SAN JOSE,                                  OPINION

                 Defendant-Appellee.

          Appeal from the United States District Court
            for the Northern District of California
            Lucy H. Koh, District Judge, Presiding

             Argued and Submitted May 14, 2021
             Submission Vacated April 25, 2022
                Resubmitted August 28, 2023
                  San Francisco, California

                      Filed April 30, 2024

     Before: Jacqueline H. Nguyen and Daniel P. Collins,
    Circuit Judges, and Timothy M. Burgess,* District Judge.

*
 The Honorable Timothy M. Burgess, Chief United States District Judge
for the District of Alaska, sitting by designation.
2          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

                   Opinion by Judge Nguyen;
                    Dissent by Judge Collins

                          SUMMARY**

              First Amendment/Prior Restraint

    The panel affirmed the district court’s dismissal of
plaintiff Diamond S.J. Enterprise’s claims, and its summary
judgment for the City of San Jose, in Diamond’s action
alleging First Amendment and due process violations when
the City suspended Diamond’s license to operate a nightclub
for thirty days following a shooting outside the club.
    After holding an administrative hearing, the City found
Diamond operated its venue in a manner that caused the
shooting and created a public nuisance in violation of San
Jose Municipal Code (SJMC) Chapter 6.60’s entertainment
business licensing provisions. Diamond filed a complaint in
federal court, asserting: (1) a First Amendment facial
challenge raising theories of prior restraint, overbreadth and
vagueness to SJMC Chapter 6.60’s Nuisance Provisions,
specifically §§ 6.60.290, 6.60.370(L), and 6.60.383(F),
which preclude public entertainment businesses from
operating in a way that causes a public nuisance; and (2) a
due process claim, in connection with the administrative
hearing.

**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE      3

    The panel held that Diamond had standing to bring a
First Amendment facial challenge to the suspension,
revocation, and renewal procedures in the Nuisance
Provisions.
    The panel held that Diamond’s facial attack on the
Nuisance Provisions as prior restraints failed because the
Provisions’ definition of “public nuisance” does not give
City officials unbridled discretion that creates a risk of
censorship. The City’s public entertainment business
licensing scheme properly constrains official discretion by
incorporating narrow, objective, and definite public
nuisance statutes into the scheme. Moreover, the challenged
provisions require the Chief of Police to state all grounds
upon which a denial, suspension, or revocation of a license
is based and provide for an administrative hearing and both
administrative and judicial review. Because the panel
rejected Diamond’s facial attack on the Nuisance Provisions
as prior restraints, it also rejected the overbreadth and
vagueness challenges.
    The panel held that Diamond failed to state a procedural
due process claim. The licensing scheme provided Diamond
with notice, an opportunity to be heard, the ability to present
and respond to evidence, and a pre-deprivation appeal,
followed by post-deprivation review by the California
Superior Court. In any event, any procedural error was
harmless as none of the alleged deficiencies affected the
outcome of the proceedings.
    Dissenting, Judge Collins disagreed with the majority’s
conclusion that the district court properly rejected, as a
matter of law, Diamond’s facial challenges to the City’s
licensing scheme. The nuisance standard underlying
§§ 6.60.290 and 6.60.370(L) is too amorphous to adequately
4        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

cabin official permitting discretion in the First Amendment
context. Judge Collins would reverse the district court’s
grant of summary judgment rejecting the challenges to
§§ 6.60.290, 6.60.370(L), and 6.60.383(F), and would
remand with instructions (1) to hold §§ 6.60.290 and
6.60.370(L) facially invalid, but only insofar as they permit
a revocation or suspension of an entertainment permit based
on a nuisance theory; and (2) to further consider Diamond’s
challenges to § 6.60.383(F). Judge Collins would vacate the
judgment with respect to Diamond’s constitutional
challenge to SJMC Chapter 6.62, which governs licensing
for event promoters, and would remand with instructions to
dismiss those claims for lack of Article III standing. He
would affirm the dismissal of the due process claim to the
extent that it is based on an allegedly biased decisionmaker,
but would reverse the district court’s dismissal, on the
pleadings, of Diamond’s claim that the City arbitrarily
withheld material evidence from Diamond in violation of
due process.

                        COUNSEL

D. Gill Sperlein (argued), The Law Office of D. Gill
Sperlein, San Francisco, California, for Plaintiff-Appellant.
Malgorzata Laskowska (argued) and Kathryn J. Zoglin,
Senior Deputy City Attorneys; Ardell Johnson, Assistant
City Attorney; Nora Frimann, City Attorney; San Jose City
Attorney’s Office, San Jose, California, for Defendant-
Appellee.
Niles Illich and Scott H. Palmer, Palmer Perlstein, Addison,
Texas, for Amicus Curiae First Amendment Lawyers
Association.
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE     5

                          OPINION

NGUYEN, Circuit Judge:

    Diamond S.J. Enterprise, Inc. (“Diamond”), operates SJ
Live, a nightclub in downtown San Jose, California (“City”).
On the night of May 27, 2017, Jenny Wolfes, the nightclub’s
owner, cancelled a live show shortly before it was scheduled
to start because the show’s promoter had taken payments for
table reservations without her knowledge. Concerned that
some of the club’s tables had been double-booked, Wolfes
closed the doors on a large crowd waiting outside to enter.
After leaving the club, the show’s promoter fired multiple
shots into the crowd.
    A City ordinance empowers the Chief of Police to deny,
revoke, or suspend the license of a public entertainment
business that serves alcohol and hosts events with more than
100 guests if the business operates in a way that causes a
“public nuisance.” Following the incident, the City held an
administrative hearing and suspended Diamond’s license for
thirty days, finding that Diamond operated its venue in a
manner that caused the shooting and created a public
nuisance. Diamond’s thirty-day suspension went into effect
after the suspension was affirmed on administrative appeal.
    Diamond facially challenged the public entertainment
business nuisance provisions of the City ordinance in district
court, arguing that they operate as prior restraints and are
overbroad and vague. Diamond also challenged the
procedural adequacy of the administrative hearing. The
district court dismissed Diamond’s claims and granted
summary judgment in favor of the City, holding that the
challenged provisions did not implicate First Amendment
6         DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

rights and the City satisfied due process requirements. We
agree.
    Diamond’s facial attack fails because the challenged
provisions do not give City officials unbridled discretion that
creates a risk of censorship. The City’s public entertainment
business licensing scheme properly constrains official
discretion by incorporating narrow, objective, and definite
public nuisance statutes into the scheme. Similarly,
Diamond fails to state a due process claim. The licensing
scheme provided Diamond with notice, an opportunity to be
heard, the ability to present and respond to evidence, and a
pre-deprivation appeal, followed by post-deprivation review
by the California Superior Court. In any event, none of the
alleged deficiencies affected the outcome of the proceedings.
We therefore affirm the district court’s rulings.1
                                I
    Diamond operates SJ Live, sometimes referred to as
Studio 8. The nightclub is owned and managed by Wolfes,
a shareholder and the Chief Executive Officer of Diamond.
SJ Live’s patrons who wish to reserve tables can do so; they
agree to buy alcohol without paying in advance, a practice
referred to as “table service” or “bottle service.”
    On the night of May 27, 2017, SJ Live had scheduled a
live show through Daniel Embay, an event promoter. Before
the show, however, Wolfes discovered that Embay had
collected money from guests and booked advanced table
service reservations without permission. As a result, the
club’s table reservations were overbooked.           Wolfes
discovered the problem as patrons arrived for the show. She

1
  We GRANT the First Amendment Lawyer Association’s motion for
leave to file an amicus brief. ECF No. 22.
         DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE     7

immediately terminated Diamond’s relationship with
Embay, cancelled the event, and asked Embay to leave.
Wolfes closed the club’s doors, resulting in a large crowd
gathered outside. Some patrons who had pre-booked tables
became angry and tried to storm the front door. When
Wolfes asked Embay to leave, he threatened her, exited the
club’s back door, went to his car, and got a gun. He fired
several shots into the crowd gathered in a shared parking lot
behind the club and eventually fled in his car.
    In July 2017, the City’s Chief of Police issued a notice
of intention to revoke Diamond’s entertainment permit,
alleging several violations of San Jose Municipal Code
(“SJMC”) Chapter 6.60, including that Diamond had created
a public nuisance. The notice was followed by an
administrative hearing where Diamond had an opportunity
to be heard, present evidence, and respond to the City’s
evidence. The hearing officer found that Diamond operated
its venue in a manner that created the shooting incident
outside the club, which the officer deemed a public nuisance.
Specifically, the hearing officer relied on the fact that
Diamond contracted with a promoter who fired multiple
shots into a crowd that had gathered outside after patrons
were denied entry to the cancelled event. The hearing officer
also concluded that Diamond’s security outside the premises
that evening was inadequate. The hearing officer reduced
the sanction from revocation to a thirty-day suspension.
Pursuant to SJMC Section 6.60.520, the decision would not
become final if Diamond filed a timely appeal.
   Diamond sought review of the order at the City’s
Appeals Hearing Board, which upheld the decision as
supported by substantial evidence. The California Superior
Court for Santa Clara County reached the same conclusion
and denied Diamond’s petition for a writ of administrative
8          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

mandamus and request to stay enforcement of the
suspension.
    Diamond then filed a complaint in federal court,
asserting: (1) facial challenges to the ordinance for violating
the First Amendment under theories of prior restraint,
overbreadth, and vagueness; and (2) a due process claim, in
connection with the administrative hearing. The district
court dismissed the prior restraint theory and the due process
cause of action for failure to state a claim, and subsequently
denied Diamond’s request for leave to amend and for
reconsideration.      The parties filed cross-motions for
summary judgment, and the district court granted the City’s
motion on Diamond’s remaining First Amendment theories
of overbreadth and vagueness and entered judgment for the
City. Diamond timely appealed.
    Diamond argues that the public entertainment business
licensing provisions of the SJMC are facially
unconstitutional. Specifically, Diamond challenges three
provisions within SJMC Chapter 6.60 that preclude public
entertainment businesses from operating in a way that causes
a public nuisance. See SJMC §§ 6.60.290, 6.60.370(L),
6.60.383(F) (collectively, the “Nuisance Provisions”).2
Diamond further argues that it was deprived of procedural

2
  We need not address Diamond’s argument that SJMC Chapter 6.62,
which governs licensing for event promoters, is unconstitutional.
Diamond did not properly plead it in the Second Amended Complaint
(“SAC”), and the district court did not abuse its discretion in striking
from the SAC the only paragraph—paragraph 55—that arguably related
to this claim. The district court had previously instructed Diamond to
identify with specificity the subsections relevant to its claims, and
Diamond failed to do so. Moreover, Diamond did not contest the order
striking paragraph 55 in its motion for reconsideration of the order
partially granting the City’s motion to dismiss.
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE       9

due process at its license suspension hearing because the
hearing officer was biased and because it could not obtain
copies of video surveillance before or during the hearing.
                               II
    We have jurisdiction under 28 U.S.C. § 1291. We
review de novo a district court’s dismissal for failure to state
a claim under Federal Rule of Civil Procedure 12(b)(6).
Wilson v. Lynch, 835 F.3d 1083, 1090 (9th Cir. 2016). We
also review de novo a district court’s grant of summary
judgment. Branch Banking & Tr. Co. v. D.M.S.I., LLC, 871
F.3d 751, 759 (9th Cir. 2017).
                               III
                               A
                               1
    We reject the City’s contention that Diamond lacks
standing to bring a First Amendment facial challenge to the
suspension, revocation, and renewal procedures in the
Nuisance Provisions. A plaintiff has standing to vindicate
First Amendment rights through a facial challenge when it
“argue[s] that an ordinance . . . impermissibly restricts a
protected activity.” Santa Monica Food Not Bombs v. City
of Santa Monica, 450 F.3d 1022, 1033 (9th Cir. 2006)
(citation omitted). Because Diamond alleges that the
Nuisance Provisions target entertainment businesses and
vest unbridled discretion in government officials to limit
First Amendment activity, Diamond may proceed “without
the necessity of first applying for, and being denied, a
license.” City of Lakewood v. Plain Dealer Publ’g Co., 486
U.S. 750, 755–56 (1988).
10        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

     Diamond, however, lacks standing to challenge the
initial licensing provision. See SJMC § 6.60.370(L).
Diamond obtained a public entertainment license before this
lawsuit, so it cannot satisfy the injury-in-fact requirement
unless it plans to apply for another license in the future. See
Get Outdoors II, LLC v. City of San Diego, 506 F.3d 886,
895 (9th Cir. 2007) (finding the plaintiff failed to satisfy the
injury-in-fact requirement to challenge an initial licensing
scheme when it did not demonstrate intent to apply for
another permit). Diamond’s vague allegation that it intends
to apply for permits in the future is too speculative to meet
the standing requirements. See Lujan v. Defs. of Wildlife,
504 U.S. 555, 564 (1992) (“Such ‘some day’ intentions—
without any description of concrete plans, or indeed even
any specification of when the some day will be—do not
support a finding of the ‘actual or imminent’ injury that our
cases require.”).
                               2
    Diamond contends that the Nuisance Provisions are
facially invalid as prior restraints. There is no dispute that
music and entertainment fall within the protection of the
First Amendment. Ward v. Rock Against Racism, 491 U.S.
781, 790 (1989) (holding that music is protected expression);
Cinevision Corp. v. City of Burbank, 745 F.2d 560, 567 (9th
Cir. 1984) (holding that live entertainment is protected
expression). The narrow question here is whether the
challenged provisions operate as unlawful prior restraints on
those protected activities. We conclude they do not.
    Although facial challenges are disfavored, S. Or. Barter
Fair v. Jackson County, 372 F.3d 1128, 1134 (9th Cir. 2004),
licensing schemes may be facially unconstitutional if they
have a close enough nexus to expression and place
         DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE   11

“unbridled discretion in the hands of a government official
or agency,” Plain Dealer, 486 U.S. at 755–57, 759; see also
Epona v. County. of Ventura, 876 F.3d 1214, 1221 (9th Cir.
2017) (holding that a facial prior restraint challenge is
cognizable “to the extent that the scheme g[i]ve[s]
permitting officials unbridled discretion to grant or revoke
permits” (citing Kaahumanu v. Hawaii, 682 F.3d 789, 802
(9th Cir. 2012))). We need not decide whether the City’s
licensing scheme has a nexus to expression. Even assuming
it does, Diamond’s facial challenge nevertheless fails
because the Nuisance Provisions do not confer unbridled
discretion on any City official.
    To survive a facial challenge, a licensing scheme must
provide “narrowly drawn, reasonable and definite standards”
for granting, revoking, or suspending a license. Thomas v.
Chi. Park Dist., 534 U.S. 316, 324 (2002) (quoting Forsyth
County v. Nationalist Movement, 505 U.S. 123, 133 (1992));
Broadrick v. Oklahoma, 413 U.S. 601, 613 (1973) (noting
that “standardless discretionary power” may result in
“virtually unreviewable prior restraints”). Otherwise, the
decisionmaker could, “in a calculated manner, censor certain
viewpoints.” Plain Dealer, 486 U.S. at 764.
    Here, Diamond’s facial challenge fails because the
Nuisance Provisions do not confer unbridled discretion on
the City’s Chief of Police. While the application of some of
these provisions certainly requires some exercise of
discretion, that discretion is properly limited. Diamond
primarily takes issue with the provisions’ definitions of
“public nuisance,” arguing that the definitions contain the
same broad language that prior cases have found boundless.
The first and second provisions define public nuisance by
specific reference to the definitions of public nuisance in
SJMC Section 1.13.050 and California Civil Code §§ 3479
12          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

and 3480.3 SJMC §§ 6.60.290, 6.60.370(L) (citing SJMC
§ 1.13.050; Cal. Civ. Code §§ 3479, 3480). Each of these
definitions has appropriate limits.
     Under California Civil Code § 3479, a nuisance is:

         Anything which is injurious to health,
         including, but not limited to, the illegal sale
         of controlled substances, or is indecent or
         offensive to the senses, or an obstruction to
         the free use of property, so as to interfere with
         the comfortable enjoyment of life or
         property, or unlawfully obstructs the free
         passage or use, in the customary manner, of
         any navigable lake, or river, bay, stream,
         canal, or basin, or any public park, square,
         street, or highway, is a nuisance.

California Civil Code § 3480 clarifies that a public nuisance,
as opposed to a private nuisance, is “one which affects at the
same time an entire community or neighborhood, or any
considerable number of persons, although the extent of the
annoyance or damage inflicted upon individuals may be
unequal.” The California Supreme Court found that these
definitions follow a well-defined objective test. People ex
rel. Gallo v. Acuna, 929 P.2d 596, 605 (Cal. 1997) (“[T]he
standard is an objective one.”). They do not allow the City
to declare a public nuisance for any level of interference, as

3
   The third provision requires the business to be subject to an
administrative or judicial nuisance finding. SJMC § 6.60.383(F). This
renewal provision does not incorporate § 1.13.050 or §§ 3479 and 3480,
but instead goes a step farther: it applies only after a public entertainment
business has been subject to an administrative or judicial public nuisance
finding, which limits the Chief of Police’s discretion even more.
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE      13

Diamond contends, or to find a public nuisance based on
subjective criteria. “[N]ot every interference with collective
social interests constitutes a public nuisance. . . . [T]he
interference must be both substantial and unreasonable”
from the perspective of an objectively reasonable person. Id.
at 604. In other words, the risk of abuse by a Chief of Police
who may find something subjectively “indecent or offensive
to the senses” is cabined by the additional requirement that
it be both objectively unreasonable and substantial.
     This case is distinguishable from Plain Dealer. There,
the Supreme Court found that a provision allowing a mayor
to deny newspaper rack permits “for reasons related to the
health, safety, or welfare” conferred unbridled discretion by
failing to include neutral criteria or any limits “made explicit
by textual incorporation, binding judicial or administrative
construction, or well-established practice.” Plain Dealer,
486 U.S. at 769–70; cf. Spirit of Aloha Temple v. County of
Maui, 49 F.4th 1180, 1192 (9th Cir. 2022) (rejecting a
permitting scheme that allowed denial where the use would
“adversely affect surrounding property” as “general, flimsy,
and ephemeral”).
    In contrast, here, judicial construction of California Civil
Code §§ 3480 and 3479 imposes clear limits on their
definition of a public nuisance—that it be both objectively
unreasonable and substantial. See Acuna, 929 P.2d at 605;
see also Thomas, 534 U.S. at 324 (holding that a regulatory
scheme wherein permits could be denied “when the intended
use would present an unreasonable danger to the health or
safety of park users or Park District employees” was
“reasonably specific and objective”).
    The Nuisance Provisions also incorporate the public
nuisance definition from the City’s administrative abatement
14        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

scheme. This definition, similarly, engenders no facial
concerns. Section 1.13.050 defines a public nuisance to
include “[t]he maintenance or use of property in the city in a
manner that jeopardizes or endangers the health, safety or
welfare of persons on the premises or in the surrounding
area.” SJMC § 1.13.050(A)(1). Critically, City officials are
expressly prohibited from using this definition to limit
constitutionally protected activity. Id. § 1.13.050(B). This
directly constrains officials from using nuisance abatement
to curb First Amendment rights. Cf. Plain Dealer, 486 U.S.
at 769–70 (finding only illusory limits on a mayor’s
discretionary power to deny permits where no constraints
were explicitly contained in the law).
    Moreover, the challenged provisions require the Chief of
Police to state all grounds upon which a denial, suspension,
or revocation is based and provide for an administrative
hearing and both administrative and judicial review. SJMC
§§ 6.60.500, 6.60.510, 6.60.520, 6.60.530. This scheme
contrasts with the loose and standardless regulations ruled
unconstitutional in past cases. See, e.g., Forsyth County, 505
U.S. at 133 (holding an ordinance lacked narrowly drawn
reasonable and definite standards because charges were left
to the “whim” of the administrator, who did not have to rely
on any objective factors or provide an explanation, and
whose decision was unreviewable); Spirit of Aloha, 49 F.4th
at 1192 (striking down a permitting scheme that allowed “a
limitless range of subjective factors” and did not require the
regulator to provide any explanation for the denial);
Kaahumanu, 682 F.3d at 807 (finding an ordinance
conferred unbridled discretion because authorities could
revoke a permit “at any[ ]time” for “any reason” and in their
“sole and absolute discretion”); Desert Outdoor Advert., Inc.
v. City of Moreno Valley, 103 F.3d 814, 819 (9th Cir. 1996)
           DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE              15

(finding unbridled discretion where ordinance provided “no
limits” on officials’ authority to deny a permit and where
officials could “deny a permit without offering any evidence
to support [their] conclusion”).
   Because the Nuisance Provisions are narrow, objective,
and definite enough to constrain discretionary authority, any
abuse in practice must be challenged as applied. Thomas,
534 U.S. at 324–25. Thus, Diamond’s facial attack fails.4
                                   B
    We next address Diamond’s contention that the
Nuisance Provisions are unconstitutionally overbroad and
vague. A law may be invalidated as overbroad if a
“substantial number of its applications are unconstitutional,
judged in relation to the statute’s plainly legitimate sweep.”
United States v. Stevens, 559 U.S. 460, 473 (2010) (citation
omitted). If a statute “at its margins” infringes on protected
expression, facial invalidation is typically inappropriate.
Osborne v. Ohio, 495 U.S. 103, 112 (1990). The doctrine of
vagueness often overlaps with substantial overbreadth and is
a “logically related and similar doctrine.” Kolender v.
Lawson, 461 U.S. 352, 358 n.8 (1983). Because we reject
Diamond’s facial attack on the Nuisance Provisions as prior
restraints, we also reject the overbreadth and vagueness
challenges. See Kaahumanu, 682 F.3d at 802 (“To the
degree that we reject Plaintiffs’ facial attack on the
regulation, we also reject their overbreadth challenge.”).

4
  Because we affirm the district court on the merits, we do not reach the
City’s argument that Diamond’s First Amendment claim is barred by res
judicata.
16          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

                                   C
    Finally, Diamond alleges that it was deprived of
procedural due process at its license suspension hearing
because it could not access video evidence before or during
the hearing and because the hearing officer was biased. The
district court applied the Mathews v. Eldridge balancing test
to Diamond’s allegations and dismissed the claim pursuant
to Rule 12(b)(6) without leave to amend.5 424 U.S. 319
(1976).
    To evaluate a procedural due process claim, we weigh
the Mathews factors: “(1) the private interest affected;
(2) the risk of erroneous deprivation through the procedures
used, and the value of additional procedural safeguards; and
(3) the government’s interest, including the burdens of
additional procedural requirements.” Yagman v. Garcetti,
852 F.3d 859, 864 (9th Cir. 2017) (citing Mathews, 424 U.S.
at 335) (citation omitted). Assuming Diamond’s private
interest in its license is significant, we conclude that the
second Mathews prong—the risk of erroneous deprivation—
is determinative.
    Diamond’s principal objection is that it could not obtain
copies of video evidence before or during the hearing. The
City had declined Diamond’s request to access the videos
because Embay was under criminal investigation. The
City’s refusal, while unfortunate, does not rise to the level of
a constitutional violation in this case. The Due Process

5
  We do not address Diamond’s contention that the City lost its
opportunity to move to dismiss the third cause of action when it failed to
challenge it in the first motion to dismiss, because Diamond failed to
raise this argument below. See In re Mortg. Elec. Registration Sys., Inc.,
754 F.3d 772, 780 (9th Cir. 2014) (stating that generally the court does
not consider arguments raised for the first time on appeal).
            DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE               17

Clause “does not mandate that all governmental
decisionmaking comply with standards that assure perfect,
error-free determinations.” Mackey v. Montrym, 443 U.S. 1,
13 (1979). In weighing the risk of erroneous deprivation,
Mathews, 424 U.S. at 335, the record shows that Diamond
was able to vigorously object to the officers’ statements
about the videos, and there is no indication that the hearing
officer viewed the video outside of the hearing or considered
evidence beyond that presented. Moreover, Diamond’s
license was not immediately suspended. Instead, Diamond
availed itself of an additional layer of pre-deprivation review
at the Appeals Hearing Board. See SJMC § 6.60.520(C) (the
hearing officer’s decision is not final if an appeal is timely
filed). The suspension did not go into effect until after that
decision.      The procedures employed here therefore
significantly limited the risk of erroneous deprivation.6
Thus, the inability to access video evidence alone does not
demonstrate a violation of the constitutional guarantee of
adequate pre-deprivation procedures.7

6
  As to the third Mathews prong, we agree with the district court’s
assessment that the City’s interest in preserving the peace is substantial,
and additional procedural requirements here would be unduly
burdensome.
7
  And, further, Diamond received adequate post-deprivation review.
Diamond obtained independent judicial review by the California
Superior Court, pursuant to a writ of administrative mandamus.
Diamond does not allege any bias in this process. We have held that “[a
California] petition for a writ of administrative mandamus provides ‘an
adequate opportunity for de novo judicial review.’” Doe v. Regents of
the Univ. of Cal., 891 F.3d 1147, 1154–55 (9th Cir. 2018) (citation
omitted). Here, the Superior Court applied the substantial evidence
standard but also observed its ruling would have been the same even
under de novo review.
18       DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

    Even if the City’s failure to provide Diamond access to
the videos constituted procedural error, we find that error
harmless. See Al Haramain Islamic Found., Inc. v. U.S.
Dep’t of Treas., 686 F.3d 965, 988–89 (9th Cir. 2012)
(affirming dismissal of due process claims where the court
was “confident that [the errors] would not have changed [the
decisionmaker’s] ultimate . . . determination”). The hearing
officer suspended Diamond’s license for thirty days, citing
“undisputed evidence” that Embay was the shooter and
concluding Diamond was responsible for the shooting
because it had contracted with Embay. The hearing officer
had copious evidence, outside of the videos, identifying
Embay as the shooter. Most damningly, “a search warrant
of Mr. Embay’s address recovered a gun and ammunition
matching the casings found at the scene of the shooting,” and
“the recovered bullets were silver, matching the slugs also
found at the scene.” Indeed, the police report reviewed by
the hearing officer names Embay as the shooter, and
prosecutors had already criminally charged Embay for the
shooting. Additionally, the hearing officer knew that (1) a
manager at the nightclub told police that “the male that was
shooting was the promoter for the evening,” and Wolfes’s
testimony confirmed that Embay was the promoter for the
night of the shooting; (2) another witness told police “that
the person shooting was named ‘Dan,’” Embay’s first name;
and (3) another promoter “received several phone calls
speculating that Mr. Embay was the shooter.”
    Moreover, Diamond never explains how viewing the
video tapes might have affected the outcome of the hearing.
Diamond had the police report, which describes the videos’
contents in detail, prior to the hearing. Diamond contends
that, had it been able to review the video evidence, it could
have established a better timeline of events. But the exact
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE     19

timeline does not alter the basic facts drawn from the video
tapes and described in the police report—a man retrieved a
gun from a vehicle rented to Embay, returned to the crowd,
fired several shots, and drove away in the car.
    Diamond also alleges structural bias because the hearing
officer was tasked with reviewing a revocation decision
issued by his supervisor. But Diamond fails to demonstrate
that its allegations fit within either of the “two main
categories” of due process challenges based on structural
bias that we have previously identified—where a
decisionmaker has a “direct, personal, substantial pecuniary
interest” in the proceedings, or where the decisionmaker,
because of his institutional responsibilities, would have “so
strong a motive” to rule in a way that would aid the
institution. Alpha Epsilon Phi Tau Chapter Housing Ass’n
v. City of Berkeley, 114 F.3d 840, 844 (9th Cir. 1997).
Indeed, Diamond ignores the fact that the purportedly biased
officer rejected most of his supervisor’s findings and
recommended a substantially lower punishment, from
revocation to a thirty-day suspension.             Diamond’s
allegations of bias are purely speculative and do not establish
a due process violation.
    The presence of notice and an opportunity to be heard,
the ability to present and respond to evidence, and the
availability of pre- and post-deprivation appeal procedures
together greatly reduced the risk of erroneous decision-
making in this case. And any procedural error was harmless.
20         DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

Accordingly, Diamond cannot plausibly allege it was
deprived of process.8
     AFFIRMED.

COLLINS, Circuit Judge, dissenting:

    The majority affirms the district court’s judgment
rejecting all of the constitutional claims asserted by Plaintiff
Diamond S.J. Enterprise, Inc. (“Diamond”) against the City
of San Jose (“City”) concerning the City’s public-
entertainment-permitting regime. Because I think that the
district court erred in rejecting several of Diamond’s claims,
I respectfully dissent.
                                   I
    I disagree with the majority’s conclusion that the district
court properly rejected, as a matter of law, Diamond’s facial
challenges to San Jose Municipal Code §§ 6.60.290,
6.60.370(L), and 6.60.383(F).1

8
  The district court reasonably exercised its discretion in denying leave
to amend because amendment could not have remedied these
deficiencies. Wilson, 835 F.3d at 1090.
1
  I agree with the majority that Diamond has Article III standing to
challenge these provisions only insofar as they govern the suspension,
revocation, or renewal of a public entertainment permit. See Opin.,
Section III(A)(1). Although the record shows that Diamond’s CEO—
Jenny Wolfes—“intend[s] to open other live entertainment venues in the
City of San Jose in the future” and applied for an entertainment permit
for a new nightclub in 2019, Wolfes is not a party to this case, and her
actions, without more, do not establish that Diamond intends to apply for
additional public entertainment permits. Moreover, although Diamond
           DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE              21

                                   A
    The three challenged provisions are as follows:

           The permittee shall not conduct the
         permitted business in a manner that creates or
         results in a public nuisance, as defined in
         Section 1.13.050 of this code or Sections
         3479 and 3480 of the California Civil Code,
         on or within one hundred fifty (150) feet of
         the permitted premises.

SAN JOSE MUN. CODE § 6.60.290.

           An application for an entertainment permit
         or entertainment license shall be denied, and
         an entertainment permit or entertainment
         license issued pursuant to this title may be
         suspended or revoked by the chief of police
         upon any of the following grounds: . . .
           (L) The applicant, licensee or permittee has
               conducted the public entertainment
               business, in a manner that creates or
               results in a public nuisance, as defined

thus lacks standing to challenge the provisions specifically governing
initial issuance of a permit, its standing to challenge the suspension,
revocation, or renewal provisions provides a sufficient basis, under our
precedent, for it to assert a facial challenge based on a prior restraint
theory. See Kaahumanu v. Hawaii, 682 F.3d 789, 802 (9th Cir. 2012)
(holding that a facial challenge may be brought, under a prior restraint
theory, against regulations conferring “discretion to grant and revoke
permits” (emphasis added)); see also City of Lakewood v. Plain Dealer
Publ’g Co., 486 U.S. 750, 759–60 (1988) (stating that “a multiple or
periodic licensing requirement is sufficiently threatening to invite
judicial concern” and does not bar a facial challenge).
22        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

             in Section 1.13.050 of this code or
             Sections 3479 and 3480 of the
             California Civil Code, on or within one
             hundred fifty feet of the premises.

Id. § 6.60.370.
         An application to renew an entertainment
       permit or entertainment license shall be
       denied by the chief of police upon any of the
       following grounds: . . .
         (F) The     premises    or     the    public
             entertainment business has been the
             subject of an administrative, civil or
             criminal nuisance abatement action and
             court judgment or administrative
             determination finding the premises or
             the public entertainment business to be
             a nuisance within the past five years.

Id. § 6.60.383.
                               B
    As the majority states, “licensing schemes may be
facially unconstitutional if [1] they have a close enough
nexus to expression and [2] place ‘unbridled discretion in the
hands of a government official or agency.’” See Opin. at 10–
11 (quoting City of Lakewood v. Plain Dealer Publ’g Co.,
486 U.S. 750, 757 (1988)). Both elements are satisfied here,
at least to the extent that §§ 6.60.290 and 6.60.370 permit
suspension or revocation based on a “nuisance” theory.
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE      23

                               1
   First, the City’s licensing scheme plainly has a sufficient
nexus to expression.
    In Spirit of Aloha Temple v. County of Maui, 49 F.4th
1180 (9th Cir. 2022), we held that a law that explicitly and
selectively “regulates the use of properties for expressive
conduct” has a sufficient nexus to expression to permit a
plaintiff to assert a First Amendment facial challenge. Id. at
1190. As we explained, “[f]or a facial prior restraint
challenge, it matters less that the scheme is meant to be
generally unrelated to speech than that it specifically targets,
rather than simply happens to affect, expression protected by
the First Amendment.” Id. at 1191 (emphasis added). On
their face, the permit-related nuisance provisions challenged
here apply only to holders of an “entertainment permit,”
meaning a business that provides or allows live
entertainment, has a capacity of more than 100 persons, and
sells alcohol. See SAN JOSE MUN. CODE § 6.60.030(A). Live
entertainment undoubtedly constitutes protected speech
under the First Amendment, see Ward v. Rock Against
Racism, 491 U.S. 781, 790 (1989); Cinevision Corp. v. City
of Burbank, 745 F.2d 560, 567 (9th Cir. 1984), and so the
application of the challenged provisions depends explicitly
upon whether a business engages in speech. That is
sufficient to establish the requisite nexus to expression under
Spirit of Aloha.
    The City’s contrary arguments are unavailing. The City
points to the fact that, before a business allowing “live
entertainment” will be required to obtain an “entertainment
permit,” other elements must also be satisfied—viz., that
alcohol must be sold and the capacity must be more than 100
persons. But that does not eliminate the nexus to expression
24        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

that arises simply from having a permitting regime that, by
its plain terms, applies selectively based on whether the
business engages in a First Amendment activity.
    The City also notes that its “prohibition of public
nuisance . . . applies generally, not just to businesses that
need public entertainment permits, or to event promoters.”
But that does not alleviate the selectivity at issue here either.
The City does not require in-advance permitting systems for
all of its businesses, but rather only for a defined list of
several dozen. See SAN JOSE MUN. CODE chs. 6.08–6.90.
There is a critical difference between being generally subject
to nuisance law and being selectively subject to nuisance law
as part of a permitting scheme. That is, a special nuisance-
based permitting system of live entertainment (with four-
year renewals and two-year reviews, and all enforced
administratively by the police) is more onerous than a
generally applicable nuisance law. See FW/PBS, Inc. v. City
of Dallas, 493 U.S. 215, 225 (1990) (plurality) (rejecting
contention that a city’s “‘general’ inspection scheme”
precluded a facial challenge to an additional inspection
scheme explicitly and selectively applicable to “sexually
oriented businesses,” because the challenged scheme was
“more onerous with respect to sexually oriented businesses
than with respect to the vast majority of other businesses”);
cf. Arcara v. Cloud Books, Inc., 478 U.S. 697, 707 (1986)
(holding that enforcement of a generally applicable law
prohibiting use of premises for prostitution or lewd behavior
against a bookstore did not implicate the First Amendment).
Indeed, the very fact that the City relies on such a special
permitting regime to enforce nuisance law against a First
Amendment activity—rather than rely on generally
applicable nuisance law enforced in the courts—confirms
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE    25

that the City itself thinks that reliance on general nuisance
law is not equivalent to its special regime.
                               2
   Second, under Spirit of Aloha, the nuisance standard
underlying §§ 6.60.290 and 6.60.370(L) is too amorphous to
adequately cabin official permitting discretion in the First
Amendment context.
    In Spirit of Aloha, we drew a distinction between (1) a
permitting system that allows a permit to be denied based on
adverse effects on neighboring property that are tied to “an
objective factor like ‘safety’” (which we stated would be
sufficient); and (2) a system that relies on more amorphously
defined adverse effects, such as “impair[ing] the utility of
neighboring property or uses” or having detrimental effects
on “the public interest, health, safety, convenience, or
welfare” (which we held was inadequate). 49 F.4th at 1192
(citations omitted). The challenged provisions here fall on
the latter side of that line. By incorporating or relying upon
the nuisance standard in California Civil Code § 3479, the
relevant provisions of §§ 6.60.290 and 6.60.370(L) would
allow a permit to be suspended or revoked based on conduct
that is “indecent” or is “offensive to the senses.” CAL CIV.
CODE § 3479. Because these value-laden and loosely
defined terms are not anchored to any objective factor, they
impermissibly “allow[] unbridled discretion.” Spirit of
Aloha, 49 F.4th at 1192.
    In reaching a contrary conclusion, the majority relies on
the California Supreme Court’s statement that the nuisance
standard provided in § 3479 “is an objective one.” See Opin.
at 12 (quoting People ex rel. Gallo v. Acuna, 929 P.2d 596,
605 (Cal. 1997)). But that comment merely refers to the fact
that the substantive standard—whatever it is—must be
26        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

judged from the perspective of “reasonable persons” rather
than particular neighbors. Acuna, 929 P.2d at 605 (citation
omitted). That does not resolve the problem here, which is
that the range of considerations that could count as
“indecent” or “offensive to the senses” is too amorphously
defined to adequately channel discretion in the First
Amendment permitting context.
     In Acuna, the state high court held that this “indecent or
offensive to the senses” standard was satisfied based on the
defendant gang members’ “drinking, consumption of illegal
drugs, loud talk, loud music, vulgarity, profanity, brutality,
fistfights and gunfire.” 929 P.2d at 615. While that totality-
of-the-circumstances judgment is eminently reasonable, it
does not do very much to articulate the relevant limits of the
underlying substantive standard. Could a permit be denied,
based on conduct that is “indecent or offensive to the
senses,” if (for example) a venue books events involving
drinking, loud talk, loud music, vulgarity, and profanity?
Neither the majority nor the City points to anything in the
relevant state or local law that would preclude such an
outcome. Although the majority notes that the San Jose
Municipal Code contains a general statement that nothing in
the code chapter concerning nuisance abatement “shall
prohibit persons from participating in activity which the city
may not proscribe under the United States Constitution or
the California Constitution,” SAN JOSE MUN. CODE
§ 1.13.050(B), that generic and high-level instruction to
obey the Constitution can hardly be said to provide sufficient
guidance to constrain the permitting discretion of City
officials.
     In the absence of any more specific guidance to limit the
scope of this broadly framed definition of “nuisance,” with
its reliance on conduct that is “indecent or offensive to the
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE    27

senses,” the challenged provisions of the San Jose permitting
scheme confer unbridled discretion on City officials and are
inadequate in the First Amendment permitting context. See
Spirit of Aloha, 49 F.4th at 1192; see also Association of
Cmty. Orgs. for Reform Now v. Municipality of Golden,
Colo., 744 F.2d 739, 748 (10th Cir. 1984) (holding that city
council had impermissible, unbridled discretion under
ordinance that forbade door-to-door solicitation unless
exemption was granted upon finding by the council “that
such activity is for a ‘charitable, religious, patriotic or
philanthropic purpose or otherwise provides a service or
product so necessary for the general welfare of the residents
of the city that such activity does not constitute a
nuisance’”); cf. Near v. Minnesota, 283 U.S. 697, 720 (1931)
(“Characterizing the publication as a business, and the
business as a nuisance, does not permit an invasion of the
constitutional immunity against restraint.”).
                               C
    Diamond’s challenge to § 6.60.383(F) presents a
somewhat different issue, because its literal language
suggests that it applies only if the permit-renewal applicant
has been the subject of an administrative or judicial
“nuisance” finding within the five previous years. The
majority contends that, because the existence of such a
historical finding is an objective fact, this consideration
sufficiently cabins discretion and weighs in favor of
rejecting a facial challenge under Lakewood and Spirit of
Aloha. See Opin. at 12 n.3. For several reasons, however, I
would not reach this issue.
    First, the literal language of § 6.60.383(F) also suggests
that if (as here), there was such a finding, then non-renewal
is mandatory. However, neither party here has suggested
28        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

that Diamond’s permit renewal will automatically be denied,
which underscores that this provision may be interpreted by
the City as conferring a degree of discretion that is not
immediately apparent from its text. Second, the district
court rejected all constitutional challenges to these three
provisions on the ground that they lacked a sufficient nexus
to expressive conduct to implicate the First Amendment, and
it likewise did not reach any such specific issues concerning
the proper construction of § 6.60.383(F). The district court’s
ruling was wrong for the reasons I have discussed above in
section I(B)(1), and I would go no further in addressing
Diamond’s        constitutional     challenges      concerning
§ 6.60.383(F). As to that provision, I would simply reverse
the grant of summary judgment to the City and would
remand to the district court for further consideration of those
challenges.
                               II
    Diamond also asserted a constitutional challenge to
Chapter 6.62 of the San Jose Municipal Code, which governs
licensing for event promoters. However, Diamond mis-cited
the applicable provision, referencing § 6.62.410, rather than
§ 6.62.400, in paragraph 55 of its operative complaint. The
district court dismissed Diamond’s claim based on that
technicality, and the majority agrees. See Opin. at 8 n.2. I
would not reach whether that ruling is correct but would
instead vacate the district court’s judgment on this score and
remand with instructions to dismiss those claims for lack of
standing.
    Diamond challenges only one aspect of Chapter 6.62 on
the merits, viz., the provisions of § 6.62.400 that describe the
applicable procedures for processing permits and licenses
for event promoters. Diamond thus does not challenge the
          DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE    29

underlying requirement that, in using an event promoter,
Diamond must either use a licensed promoter or have a
written contract with the promoter. Diamond, however, has
failed to establish standing to challenge the adequacy of the
procedures governing the processing of event-promoter
license applications. Diamond made no showing that it, or
anyone whose services it wishes to use, planned to file a
promoter application. Moreover, Diamond could readily use
the promoter of its choice simply by using a written contract
containing the basic elements required by § 6.62.210—as
Diamond has done many times. Given these points, it is not
clear how Diamond can satisfy either the injury-in-fact or
redressability elements of Article III standing. See Lujan v.
Defenders of Wildlife, Inc., 504 U.S. 555, 560–61 (1992).
                              III
    Diamond further contends that, in two respects, the City
violated its procedural due process rights in the
administrative suspension proceedings that were conducted
against it.
    First, Diamond argues that the hearing officer was
biased, because he was, in effect, reviewing the decision of
his superior. As to this issue, I agree with the majority that
this theory fails because the California superior court—
whose impartiality is unchallenged—explicitly held that,
even if it applied de novo review to the administrative record
rather than substantial-evidence review, it would still reject
Diamond’s claims. See Opin. at 17 n.7.
    Second, Diamond asserts that it was unfairly deprived of
access to video evidence before or during the hearing. In my
view, the district court erred in rejecting this claim at the
pleadings stage. The district court held that the operative
complaint “contradicts itself with regard to whether video
30        DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE

evidence was presented at the hearing,” because the
complaint alleged both that (1) the City presented police
officers to testify as to the video contents instead of
presenting the video; and (2) the City “relied on video
evidence.”      In so concluding, the district court clearly
violated the settled rule that the allegations of the complaint
must be read in the light most favorable to the plaintiff.
Viewed in context, the complaint’s various allegations can—
and should—be read to say that the “video evidence” was
only presented through the oral testimony of officers about
what the video showed. Thus, the officers were allowed to
describe the contents of videos that were not provided to
Diamond. Moreover, based on the allegations of the
complaint, the City’s grounds for denying access to the
videos were insubstantial: the fact that there was a pending
criminal investigation into the shooting does not justify
withholding evidence from a civil proceeding while
simultaneously cherry-picking that same evidence and
presenting it in a filtered format, and that is doubly true given
that some of the withheld video evidence had originated from
Diamond itself. The majority’s rejection of this claim rests
on factual speculation that is wholly inappropriate in the
context of a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6).
                       *       *        *
    For the foregoing reasons, I would reverse the district
court’s grant of summary judgment rejecting the challenges
to §§ 6.60.290, 6.60.370(L), and 6.60.383(F), and I would
remand with instructions (1) to hold §§ 6.60.290 and
6.60.370(L) facially invalid, but only insofar as they permit
a revocation or suspension of an entertainment permit based
on a nuisance theory; and (2) to further consider Diamond’s
challenges to § 6.60.383(F). I would vacate the judgment
         DIAMOND S.J. ENTER., INC. V. CITY OF SAN JOSE    31

with respect to Diamond’s challenge to Chapter 6.62, and I
would remand with instructions to dismiss those claims for
lack of Article III standing. I would affirm the dismissal of
the due process claim to the extent that it is based on an
allegedly biased decisionmaker, but I would reverse the
district court’s dismissal, on the pleadings, of Diamond’s
claim that the City arbitrarily withheld material evidence
from Diamond in violation of due process. To the extent that
the majority concludes otherwise, I respectfully dissent.