Jon Jon's Inc., et al v. City of Warren
OPINION filed: We AFFIRM the district court s grant of summary judgment to Defendant, decision not for publication. Ralph B. Guy, Jr., Eric L. Clay (authoring), and Helene N. White, Circuit Judges.
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0379n.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JON JON'S, INC.; VICTORIA
CERRITO; MASOUD SESI; NANCY
CITY OF WARREN,
Jun 27, 2017
DEBORAH S. HUNT, Clerk
ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF MICHIGAN
GUY, CLAY, and WHITE, Circuit Judges.
CLAY, Circuit Judge. Plaintiffs Jon Jon’s, Inc., Victoria Cerrito, Masoud Sesi, and
Nancy Hakim appeal from the district court’s order granting Defendant City of Warren’s motion
for summary judgment as to Plaintiffs’ 42 U.S.C. § 1983 constitutional claims and remanding the
supplemental state law claims to the Macomb County Circuit Court. For the reasons that follow,
we AFFIRM the district court’s grant of summary judgment.
This action arises out of Defendant’s denial of the transfer of a liquor license involving
the now defunct Jon Jon’s, an adult entertainment establishment featuring topless dancing in
Warren, Michigan. The gravamen of the appeal is that Defendant, in denying the transfer,
discriminated against Sesi and Hakim because they are Arab American.
Cerrito had owned Jon Jon’s for 25 years. In 1986, Defendant changed its zoning
ordinances to address the secondary effects of sexually-oriented businesses. The new ordinance
would have prevented Jon Jon’s from operating at its current location because it was within 750
feet of a residential area; however, Jon Jon’s was granted non-conforming use status, and so was
allowed to continue operating its business there. In order to retain its non-conforming use status,
Jon Jon’s was prohibited from making improvements constituting more than 30 percent of its
listed value. The reason for this restriction was to phase out over time the non-conforming use
In the spring of 2008, Cerrito planned to sell Jon Jon’s in its entirety to Sesi because she
could not afford to undertake needed renovations. Cerrito and Sesi entered into a purchase
agreement for $1.3 million. Sesi paid Cerrito about $500,000 up front, of which $100,000 went
to purchasing a 9% stake in Jon Jon’s. Cerrito transferred 9% of the stock to Sesi on December
1, 2008. Cerrito did not need approval from the Warren City Council (“City Council”), the
Warren Police Department, or the Michigan Liquor Control Commission (“MLCC”) because she
transferred less than 10% of the Jon Jon’s stock. See Mich. Comp. Laws §§ 436.1501(2),
436.1529(1). Cerrito then resigned, effective immediately. Sesi was to pay the remainder of the
$1.3 million after the transfer of the remaining 91% of the Jon Jon’s stock was approved by the
In January 2009, Sesi, through his counsel, Cecil St. Pierre, obtained a variance to install
a walk-in cooler and to raise the roof height. In April 2009, Cerrito sought to transfer the
remaining 91% of Jon Jon’s stock to Sesi. In August 2009, the Warren Police Commissioner
recommended against the transfer application based on the long history of liquor code violations
at Cheetah’s, a strip club in Detroit that Sesi owned. Before the City Council considered and
voted on the transfer application, Sesi withdrew his request because he believed that his efforts to
obtain City Council approval would be futile given his history.
Sesi, through his company, BFC Management, had purchased Cheetah’s in 2002. From
2005 to 2007, Cheetah’s employees were charged with numerous liquor license violations,
including allowing dancers to touch patrons’ genitals and selling alcohol to minors. Cheetah’s
also garnered national attention prior to 2009 based on human trafficking that occurred at the
club. Sesi was never indicted on the charges of human trafficking.
As soon as Sesi took over Cheetah’s in 2002, he hired his nephew Lahkman (Luke) AlHakim to work at the club. At some point after Sesi purchased Cheetah’s, Al-Hakim purchased
the land on which Cheetah’s sits. In the summer of 2009, Al-Hakim purchased the land on
which Jon Jon’s sits.
One month after Sesi withdrew his transfer request for Jon Jon’s, Sesi sold his interest to
Hakim, his niece and Al-Hakim’s sister, for $5,000, which was only a fraction of what he had
paid Cerrito less than ten months earlier. The same day Sesi sold his interest in Jon Jon’s to
Hakim, Hakim entered into a stock purchase agreement to buy Cerrito’s 91% interest in Jon
Jon’s for $650,000, subject to the approval of the City Council, Warren Police Department, and
the MLCC. In January 2010, Hakim applied to the City Council for approval of the stock sale
transfer of Cerrito’s interest in Jon Jon’s.
During its April 27, 2010 meeting, the City Council discussed Hakim’s stock transfer
application and took public comments. At the meeting, Hakim’s interests were represented by
attorney Cecil St. Pierre, who she did not speak to prior to the hearing and who was paid by her
brother, Al-Hakim. Councilmember Mark Liss expressed concerns that Sesi would be involved
in Jon Jon’s operations, and that the $800,000 in improvements anticipated by Jon Jon’s would
destroy the strip club’s non-conforming use status. The President of Central Homeowners of
Warren (“CHOW”) also expressed concern that Sesi would be involved in the operation of Jon
Jon’s. St. Pierre stated that Sesi would not run Jon Jon’s but its current manager, Kelly Sanders,
who had run the business for 20 years, would continue to do so. Hakim later testified at her
deposition that her brother Al-Hakim would operate Jon Jon’s and that she had never met and did
not know Sanders.
The City Council voted 5-4 to deny the transfer application. The City Council did not
issue a formal written decision outlining its reasons for the denial, but the meeting minutes set
forth Liss’ objections and the concerns that other councilmembers and community members
raised at the hearing. On August 18, 2010, the City’s Chief Zoning Inspector informed Jon Jon’s
that it had lost is non-conforming use status due to unapproved demolition. After Sesi obtained
the variance in 2009 to add a new walk-in cooler and raise the roof height, it was discovered that
Jon Jon’s had been gutted, and what was left were only a few walls and a concrete slab.
Jon Jon’s appealed the Chief Zoning Inspector’s decision to the Zoning Board of Appeals
(“ZBA”). The ZBA affirmed, and the Macomb County Circuit Court affirmed the ZBA’s
decision that Jon Jon’s had lost its status as a non-conforming use.
On June 1, 2010, Plaintiffs commenced this action against Defendant and Mark Liss
challenging Defendant’s and Mark Liss’s actions on state and federal grounds. On state law
grounds, Plaintiffs challenge the denial of the transfer application and seek a writ of mandamus
ordering Defendant to transfer the liquor license to Hakim (Counts I and II). On federal grounds,
Plaintiffs brought suit under § 1983, claiming Defendant and Liss violated their substantive due
process rights, violated their rights to freedom of speech and expression, and discriminated
against them on the basis of race (Counts IV through IX). On November 16, 2010, the parties
filed a stipulation removing Liss from the caption of the complaint. On May 5, 2012, Defendant
filed its first motion for summary judgment. On August 31, 2012, the district court granted
Defendant’s first motion for summary judgment. The district court held that Plaintiffs’ claims
were barred by res judicata because the Macomb County Circuit Court adjudicated the issue of
whether Jon Jon’s properly lost its nonconforming use status. Plaintiffs subsequently appealed
the district court’s order to this Court.
On August 29, 2013, this Court issued an opinion reversing and remanding the case
because res judicata did not bar all of Plaintiffs’ claims since Macomb County Circuit Court
“construed Plaintiffs’ case solely as an appeal from the [Zoning Board of Appeals’] decision and
did not acknowledge or consider Plaintiffs’ constitutional claims against the City.” Jon Jon’s,
Inc., et al. v. City of Warren, 534 F. App’x 541, 541 (6th Cir. 2013). This Court explained that
the Macomb County Circuit Court did not adjudicate Plaintiffs’ constitutional claims, and
therefore those claims were not barred by res judicata. Id. at 543–45.
On September 30, 2013, the district court reopened the case. On October 13, 2015,
Defendant filed its second motion for summary judgment. On that same day, Defendant also
filed a motion for leave to file excess pages. On October 15, 2015, the district court granted
Defendant’s motion for leave to file excess pages. On February 16, 2016, the district court
granted Defendant’s second motion for summary judgment as to Plaintiffs’ federal constitutional
claims and remanded the supplemental state law claims to the Macomb County Circuit Court.
Plaintiffs timely appealed.
Plaintiffs argue that the district court erred in granting summary judgment in favor of
Defendant because: (1) Defendant did not file a brief in support of its motion for summary
judgment; (2) the district court considered evidence outside the scope of the City Council’s April
27, 2010 hearing, which Plaintiffs refer to as “parol evidence”; (3) Defendant denied them equal
protection on the basis of race; (4) Defendant denied them their substantive due process rights by
not following the procedures set out in City ordinances enacted after the April 2010 meeting;
(5) Defendant violated their right to freedom of expression by enacting such ordinances; and
(6) the district court erroneously dismissed Mark Liss as a defendant.
1. Standard of Review
“This Court reviews a grant of summary judgment de novo using the same legal standard
employed by the district court.” Wojcik v. City of Romulus, 257 F.3d 600, 608 (6th Cir. 2001).
“Summary judgment is appropriate where ‘the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter of law.’” Id.
(quoting Fed. R. Civ. P. 56(c)). A fact is only material if its resolution will affect the outcome of
the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court views all
facts and inferences in the light most favorable to the nonmoving party. Taft Broad. Co. v.
United States, 929 F.2d 240, 248 (6th Cir. 1991); see also Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
A. Failure to Submit Brief
Plaintiffs’ first argument is that the district court erred in granting summary judgment
because Defendant failed “to submit a brief in support.” (Pls.’ Br. 14.) Plaintiffs contend that
Defendant “filed its motion for summary judgment” and that the “motion did not include a brief
in support of the motion, which is required under Eastern District of Michigan Local Rule
When Defendant moved for summary judgment, it submitted a brief that exceeded the
standard 25-page limit set out in Eastern District of Michigan Local Rule 7.1(d)(3)(A). Two
days after Defendant filed its motion for summary judgment and motion for leave to file excess
pages, the district court granted Defendant’s motion for leave to file excess pages in a text-only
order. On that same day, the district court notified the parties that it would determine the motion
for summary judgment without oral argument, stating that the motion for summary judgment
“ha[s] been filed.” (R. 93, Notice of Determination Without Oral Argument, Page ID # 2720.)
The district court’s decision that Defendant properly filed its brief is reviewed for an
abuse of discretion because the “interpretation and application of local rules and local
practice. . . . are matters within the district court’s discretion.” Wright v. Murray Guard, Inc.,
455 F.3d 702, 714 (6th Cir. 2006). Under Eastern District of Michigan Local Rule 7.1(d)(1)(A),
“[u]nless the court permits otherwise, each motion and response to a motion must be
accompanied by a single brief” and “[t]he brief may be separate from or may be contained within
the motion or response.” Plaintiffs’ apparent contention is that Defendant never filed the brief on
its own once the district court granted Defendant’s motion for leave to file excess pages.
Defendant noted in a footnote in its reply brief that it confirmed with district court staff that it did
not need to re-file the brief as a stand-alone docket entry. Moreover, Plaintiffs responded to the
brief they contend was never filed. For the aforementioned reasons, the district court did not
abuse its discretion in not requiring Defendant to file a stand-alone brief.
B. Parol Evidence Rule
Plaintiffs’ second contention concerns the scope of the evidence that the district court
considered in resolving their constitutional claims. Plaintiffs argue that the only evidence we
may consider when reviewing whether there was racial animus in Defendant’s decision to deny
Hakim’s application is the City Council’s minutes. Plaintiffs’ argument fails to persuade us
because it is not supported by our precedent or the rules of evidence, nor is it even reasonable as
a practical matter.
Plaintiffs specifically contend that the district court erred in deciding the racediscrimination claim when it considered evidence that was not contained in the official minutes
of the April 2010 meeting because “[u]nder Michigan law, a public board speaks through its
minutes and resolutions only.” (Pls.’ Br. 24 (citations omitted).) Plaintiffs thus argue that the
district court erred when it (1) concluded that the parol evidence doctrine does not apply to
constitutional claims, only contractual claims, and (2) allowed Defendant “to use parol evidence
to justify the City’s denial of the Hakim application” because this doctrine applies “to all cases
where a municipal body is required to keep records of their official meetings.” (Pls.’ Br. 25.)
There are numerous reasons why Plaintiffs’ argument fails. First, Plaintiffs fail to cite to
any precedent that supports their proposition. Plaintiffs first cite to Palladium Publishing Co. v.
River Valley School District, 321 N.W.2d 705, 707 (Mich. App. 1982), not for any legal
proposition but for the fact that Palladium cites to Tavener v. Elk Rapids Rural Agricultural
School District, 67 N.W.2d 136 (Mich. 1954). Both cases are immaterial to our analysis of this
issue. In Palladium, the Michigan Court of Appeals held that “in order for the Board of
Education to act upon the suspension of a student, the minutes of the Board of Education
meeting must contain the student’s name. The facts cannot be hidden by using the student’s
number.” 321 N.W.2d at 706. Palladium does not support the claim that only official meeting
minutes may be introduced to prove or refute a discrimination claim against a municipal
government, and thus fails to support Plaintiffs’ argument.
Likewise, Tavener is also irrelevant to our analysis. Plaintiffs cite Tavener for the
general proposition that records kept by municipal governments must not be supplemented by
parol evidence because “‘the true official history of their acts would perish with the living
witnesses, or fluctuate with their conflicting memories.’” 67 N.W.2d at 139 (quoting Stevenson
v. Bay City, 26 Mich. 44, 45 (1872)). But Plaintiffs do not explain how or why Tavener applies
in this § 1983 case. In Tavener, the Michigan Supreme Court held that a school board member
could not contradict the board’s resolutions and minutes concerning the estimated cost of a
construction project by testifying that a resolution was passed “with reservations.” Id. at 139–40.
However, the court took into consideration testimony and correspondence regarding the board’s
deliberations that did not contradict the board’s resolutions and minutes. 67 N.W.2d at 138–39.
In this case, Defendant relies on exactly this sort of complementary evidence.
In any event, the evidence contained in the April 2010 City Council minutes provides
legitimate and non-discriminatory reasons for the denial of the transfer application. (See R. 9113, April 2010 Minutes, Page ID # 2627 (noting Hakim’s lack of experience to run a high-risk
business, i.e., liquor-licensed strip club); Page ID # 2625 (Hakim’s counsel, who was also Sesi’s
counsel, admitted that Sesi had numerous violations and his application had not been approved
by the Warren Police Department); Page ID # 2626 (president of neighborhood group expressing
concern over Sesi’s past with Cheetahs and possible involvement with Jon Jon’s); Page ID #
2626 (Hakim’s counsel admitting Hakim’s familial relation to Sesi and explaining that Hakim’s
mother was Sesi’s step sister); Page ID # 2627 (Liss noting that Sesi had been part owner and
managing partner of Jon Jon’s for years, and that Jon Jon’s was owned by Warren Property
Investments, which was owned by Hakim’s brother); Page ID # 2627 (Liss explaining that
because it was next to homes, Jon Jon’s did not conform to the zoning ordinance, that the
$800,000 investment would involve “a major structural change,” and would not comply with the
Accordingly, we hold that the district court did not err in considering all of the relevant
evidence presented when it dismissed Plaintiffs’ § 1983 claims.
C. Race Discrimination
Next, we turn to Plaintiffs’ race discrimination claim brought pursuant to the Equal
Protection Clause of the Fourteenth Amendment. In order to state a claim for race discrimination
under the Equal Protection Clause, Plaintiffs must prove “racially discriminatory intent or
purpose.” City of Cuyahoga Falls, Ohio v. Buckeye Cmty. Hope Found., 538 U.S. 188, 194
(2003) (internal citations omitted). The evidence presented may be direct or circumstantial, as
long as it demonstrates “a clear pattern” of government action that is “unexplainable on grounds
other than race.” Village of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 266
(1977). The district court held that Plaintiffs failed to meet their burden. We agree.
Plaintiffs failed to put forth any evidence that demonstrates that the City Council opposed
the transfer of the liquor license based on Sesi and Hakim’s race. First, Plaintiffs rely primarily
on Sesi’s and Hakim’s deposition testimony that they “felt” the City Council denied the transfer
based on their race. As the district court pointed out, this ipse dixit is “nothing more than rank
speculation.” (R. 102, Order Granting Mot. for Summ. J., Page ID # 3032.) Second, Plaintiffs
contend that no other transfer applications were denied in 2009 and 2010, and that the only
difference between the applicants whose applications were granted and Hakim is that Hakim is
Arab American. Plaintiffs reference one instance where a liquor license transfer application was
approved by the City Council, but Plaintiffs fail to provide the race of that applicant. Thus, this
alleged comparison provides no support for their argument.
Third, Plaintiffs argue that the City Council relied on evidence that was not part of the
official minutes of the April 27, 2010, meeting to justify the denial of the transfer application.
(Pls.’ Br. 24.) Plaintiffs contend that the district court “misunderstood, and therefore misapplied,
Michigan law” because “this doctrine does not apply only to matters of contract interpretation,
but to all cases where a municipal body is required to keep records of their official meetings.”
(Id. at 24−25.) We do not agree with Plaintiffs’ contention. As discussed above, Plaintiffs
provide no authority supporting their position. In any event, “the meeting minutes and Liss’
deposition testimony provide non-discriminatory and legitimate reasons for the denial.” (R. 102
Fourth, Plaintiffs complain that the City Council, in making its decision in 2010, did not
comply with a City ordinance enacted in 2013, which requires the Council to give reasons for a
decision approving or denying a transfer application. This 2013 ordinance is irrelevant to our
analysis because it was not in existence at the time the transfer application was denied in April
2010, and thus has no bearing on the issue of whether the City Council racially discriminated
Fifth, Plaintiffs rely on census statistics to argue that no Arab Americans resided in the
City of Warren in 2010, making racial animus the likely reason for the City Council’s decision.
We are not persuaded. This data, without more, does not demonstrate “a clear pattern” of
government action that is “unexplainable on grounds other than race.” Village of Arlington
Heights, 429 U.S. at 266.
Sixth, Plaintiffs point to three prior discrimination cases where the City was found liable
for race, disability, and height discrimination to argue that the City racially discriminated against
them in this case. These prior and unrelated acts of discrimination do not suggest racial animus
in this case.
For one, the disability and height cases are entirely irrelevant to the race
discrimination claim at issue here. Second, the prior race discrimination case stemmed from the
City’s municipal recruitment practices in 1998, and involved different governmental actors, a
different suspect class, and different factual allegations.
Finally, Plaintiffs rely on postings and letters by Liss to support their allegation that he
was on a mission to get their liquor license transfer application denied because Hakim and Sesi
are Arab Americans. As with the arguments discussed above, this final argument falls short of
persuading us. Liss, in his letters and web postings, does not mention or refer to Plaintiffs’ race.
More importantly, Liss’ writings reveal his concerns that Jon Jon’s would be turned into the next
Cheetah’s due to the substantial likelihood that Sesi and/or Al-Hakim would become involved in
managing Jon Jon’s.
Therefore, we conclude that the district court did not err in granting summary judgment
in favor of Defendant on Plaintiffs’ race discrimination claim because Plaintiffs have failed to
raise a genuine issue of material fact that Defendant denied Hakim’s transfer application because
of her race.
D. Substantive Due Process
Plaintiffs further allege that Defendant violated their substantive due process rights by
way of two City ordinances enacted after the April 27, 2010, meeting. Before reaching the
merits of Plaintiffs’ claim, we must first consider what interest is at stake, if any.
“[S]ubstantive due process claims are examined under a two-part analysis. First, the
Court must determine whether the interest at stake is a protected liberty or property interest
under the Fourteenth Amendment. Only after identifying such a right do we continue to consider
whether the deprivation of that interest contravened the notions of due process.”
257 F.3d at 609 (internal citations omitted). “Unilateral expectations of a property interest are
insufficient to trigger due process concerns.’” Id. “Michigan courts have held that the holder of
a liquor license has a constitutionally protected interest and is therefore entitled to proper
proceedings prior to making decisions regarding renewal or revocation.” Id. at 609−10 (citing
Bisco’s, Inc. v. Mich. Liquor Control Comm’n, 238 N.W.2d 166, 167 (Mich. 1976) (holding that
a current holder of a liquor license has a property interest such that an application for renewal
cannot be denied without due process protections)).
Plaintiffs argue that Hakim has a recognized property interest in the liquor license that
was the subject of the transfer application. We disagree. In Wojcik, we stated that, “[a]s parties
requesting the transfer of an entertainment permit, Plaintiffs were essentially in the position of
new applicants for the entertainment permit and did not have a property interest so as to entitle
them to procedural or substantive due process rights in the same way that an existing permit
holder might demand.” 257 F.3d at 610. Similar to the plaintiffs in Wojcik, Hakim does not
have a recognized property interest in the liquor license because she was a new applicant with no
existing ownership of the liquor license. As to Cerrito, the holder of a liquor license is entitled to
due process for “decisions regarding renewal or revocation.” Wojcik, 257 F.3d at 610 (citation
omitted). However, there is no recognized property interest in the ability to transfer a liquor
license, because limiting transferability “does not completely inhibit the alienability of such
licenses.” Id. at 610. Plaintiffs cannot claim a due process violation as a matter of law without a
protected property or liberty interest at stake.
Moreover, even if there were a recognized
property interest at stake, the bases for Plaintiffs’ substantive due process argument are two City
ordinances that were enacted after the decision to deny the transfer application was made in
April 2010. Thus, Plaintiffs’ substantive due process claim would have failed in any event.
E. First Amendment
Plaintiffs also argue that the City ordinance enacted in 2013, which prohibits topless
dancing at establishments that serve alcohol, is not content neutral, and thus violates their First
Amendment right to freedom of expression. Whatever the merits of that assertion, the district
court correctly pointed out that “[t]he constitutionality of the 2013 liquor ordinance . . . is not
properly before this court” and “cannot form any basis for plaintiffs’ First Amendment claim”
because “Plaintiffs’ transfer application was denied in 2010, their Complaint was filed in 2010,
and they have not sought to amend the Complaint at any point over the past six years that this
litigation has been pending.” (R. 102 at 3031.)
F. Mark Liss Removed From Caption
Plaintiffs lastly argue that the district court erred in finding that Liss was properly
dismissed as a defendant because they never stipulated to a dismissal of Liss, and our earlier
opinion reversing summary judgment for Defendant also reversed the dismissal of Liss. We do
not find Plaintiffs’ final argument persuasive. The record clearly demonstrates that the parties
stipulated early on in this case to remove Liss from the case caption. Moreover, Plaintiffs failed
to appeal or move for reconsideration of the district court’s first summary judgment order
explicitly acknowledging Liss’ dismissal. (R. 66, 2012 Order Granting Mot. for Summ. J., Page
ID # 2061 (“The complaint originally identified two Defendants; namely, the City and Mark
Liss, a member of its City Council. However, pursuant to the parties’ stipulation, the Court
entered an order on November 16, 2010 which dismissed Liss as a party to this case.”).)
As the district court stated, “[i]f plaintiffs took issue with Liss’ dismissal, the time to do
so was in a motion for reconsideration or on appeal. Having done neither, Liss was properly
dismissed, and there is no basis for reinstating those claims now, some five years later.” (R. 102
at 3020.) We agree, and hold that Liss was properly dismissed.
We hold that the district court did not err in granting summary judgment in favor of
Defendant because: (1) Defendant filed a brief in support of its motion for summary judgment;
(2) Michigan’s parol evidence rule does not preclude the evidence presented by Defendant with
respect to the constitutional claims asserted in this case; (3) Plaintiffs provide no evidence that
the decision to deny the liquor license transfer application was motivated by race, other than their
self-serving deposition testimony; (4) the two ordinances Plaintiffs reference are irrelevant to this
case since they were enacted after the City Council denied Hakim’s transfer application; and
(5) Liss was properly dismissed as a defendant.
For the foregoing reasons, we AFFIRM the district court’s grant of summary judgment
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