Durr et al v. Scottsdale, City of et al

Filing 20

ORDER granting Defendant's 14 Motion for Judgment on the Pleadings. IT IS FURTHER ORDERED dismissing claims I, II and III with prejudice. IT IS FURTHER ORDERED granting Plaintiff leave to amend claims IV, V and VI Plaintiff must file her First Amended Complaint no later than ten (10) days after the date of this ruling. Signed by Judge Susan M. Brnovich on 3/27/2024. (ESG)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 June Durr, et. al., Plaintiffs, 10 11 v. 12 City of Scottsdale. et. al., 13 No. CV-23-00752-PHX-SMB ORDER Defendants. 14 15 Pending before the Court is Defendants’ Motion for Judgment on the Pleadings. 16 (Doc. 14.) Plaintiffs filed a response (Doc. 15), to which Defendants replied (Doc. 16). 17 The Court held oral argument on March 15, 2024. After considering the parties’ arguments 18 and relevant case law, the Court will grant the Motion. 19 I. BACKGROUND 20 This Motion stems from the events surrounding Plaintiffs’ surrender of their liquor 21 license and subsequent business closure. (Doc. 14.) Plaintiff June Durr owned a bar and 22 restaurant, Loyalty Lounge, located in Scottsdale, Arizona. (Doc. 1 at 3.) Loyalty Lounge 23 began operating in March 2021. (Id.) Plaintiff alleges that in May 2021 she was invited 24 to a “meet and greet” with the Scottsdale Police Department (“SPD”) members Detective 25 Bailey and Officer Smith, but this meeting turned into an “impromptu liquor inspection.” 26 (Id. at 3.) Plaintiff alleges that Detective Bailey’s inspection “led to the creation of an 27 unbelievably false report.” (Id. at 4.) Plaintiff also alleges that SPD wanted her to sign a 28 blank inspection form and then “put no employee log, a false statement.” (Id. at 4.) 1 Plaintiff alleges she sent Detective Bailey the employee log. She further alleges that this 2 inspection was the beginning of SPD harassing black owned businesses. (Id. at 5.) The 3 inspection report was sent to the Arizona State Department of Liquor Licenses and Control 4 (the “Department”) and included several liquor license violations, namely involvement of 5 a hidden owner—Durr’s son, a convicted felon—and issues with employee contact logs. 6 (Doc. 2 at 3.) The Board issued Durr a warning. (Doc. 1 at 5.) 7 In addition to her allegations against Detective Bailey surrounding Loyalty’s liquor 8 license, Plaintiff also alleges that Officer Smith, as a zoning compliance officer for SPD, 9 inspected Loyalty and found that it violated several zoning ordinances, one of which 10 Plaintiff conceded to violating. (Doc.1 at 6 ¶¶ 30-32, 9 ¶ 43.) Plaintiff alleges that she was 11 “forced to plead guilty” to this violation to save the business, and that the reporting of this 12 violation was the result of SPD harassing her because she is a black business owner. (Id. 13 at 9 ¶ 43; 14 ¶ 74.) 14 In June 2022, Durr and Loyalty Lounge entered into a consent decree finding that 15 despite being required by law to derive at least forty percent of their revenue from food 16 sales, only nine percent Loyalty Lounge’s revenue was derived from food sales, with the 17 remainder being from liquor. (Doc. 14-1 at 2.) In this decree, Plaintiff voluntarily 18 surrendered Loyalty Lounge’s liquor license. (Id. at 6.) Loyalty Lounge closed following 19 surrender of its liquor license due to what Plaintiff alleges was “false reporting” by SPD. 20 (Id. at 6.) In July 2022, Plaintiff submitted a public records request for departmental 21 records “alleged to be the reason for the suspension and subsequent revocation of the 22 license.” (Doc 1 at 9 ¶ 47.) Plaintiff also claims that “emails and questions asked leading 23 up to the failed audit raised red flags.” (Id. at 10 ¶ 49.) She additionally alleges that she 24 hired an expert who audited part time for liquor boards who “rechecked” the numbers and 25 found that SPD’s numbers were wrong, but that the Department “refused” to adjust their 26 position. (Id.) 27 Plaintiff then brought six claims against the officers alleging three violations of 42 28 U.S.C. § 1983, gross negligence, interference with contract, and abuse of process. (Doc. -2- 1 1.) In June 2023, Defendants filed an Answer to this Complaint (Doc. 7). Defendants now 2 bring this Motion for Judgment on the Pleadings under Rule 12(c) of the Federal Rules of 3 Civil Procedure asking the Court to enter judgment in their favor based on the Complaint 4 and Answer. (Doc. 14.) For the reasons explained below, the Court will grant Defendants’ 5 Motion. 6 II. LEGAL STANDARD 7 “After the pleadings are closed—but early enough not to delay trial—a party may 8 move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). The Court reviews Rule 12(c) 9 motions under the same legal standard as Rule 12(b)(6). Dworkin v. Hustler Mag., Inc., 10 867 F.2d 1188, 1192 (9th Cir. 1989). “For purposes of the motion, the allegations of the 11 non-moving party must be accepted as true, while the allegations of the moving party which 12 have been denied are assumed to be false.” Hal Roach Studios, Inc. v. Richard Feiner & 13 Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). “Judgment on the pleadings is proper when 14 the moving party clearly establishes on the face of the pleadings that no material issue of 15 fact remains to be resolved and that it is entitled to judgment as a matter of law.” Id. 16 III. DISCUSSION 17 A. Consent Decrees 18 Defendants have attached two Consent Agreements from the Department to their 19 response. (Doc.14-1; 14-2.) The first agreement includes a finding of fact that states a 20 Department audit showed that the licensee, Loyalty Lounge, failed to derive at least forty 21 percent of its gross revenue from food sales as required by statute. See Ariz. Rev. Stat. 22 § 4-205.02(M). (Doc. 14-2 at 2.) The second agreement includes a finding of fact that 23 June Durr’s son, Javon Journe-Durr, held a managerial position at Loyalty Lounge, had 24 control over its premises, and had access to and used its financial accounts to transact 25 business yet Loyalty had not identified Javon as a manager or controlling person. (Doc. 26 14-1 at 8.) These findings of fact contradict factual allegations made in the Complaint. 27 Defendants referred to these documents throughout their briefing and at oral argument 28 asked the Court to consider these documents as they are public record and Plaintiff agreed -3- 1 to be bound by the findings of fact in the agreement. Plaintiff asks the Court not to consider 2 the documents because they were not attached to the Complaint. The Court agrees with 3 Defendants and will use the consent decrees in its analysis. “On a Rule 12(c) motion, the 4 court is not strictly limited to considering the face of the complaint.” Snoqualmie Indian 5 Tribe v. City of Snoqualmie, 186 F. Supp. 3d 1155, 1161–62 (W.D. Wash. 2016). The 6 Court may consider documents not physically attached to the complaint where “their 7 authenticity is not contested, and the complaint necessarily relies on them.” Id. at 1162. 8 The Court is only unable to take notice of facts that are subject to “reasonable” dispute. 9 Fed. R. Evid. 201(b). Further, “[a]ll parties must be given a reasonable opportunity to 10 present all the material that is pertinent to a motion for judgment on the pleadings.” 11 Snoqualmie Indian Tribe, 186 F. Supp. 3d at 1162 (cleaned up). Here, the consent decrees’ 12 authenticity is unquestioned, and the complaint does rely on the facts underlying them. 13 Further, it is apparent that the decrees are pertinent to the Motion here. Accordingly, the 14 Court will consider the consent decrees in its analysis. 15 B. Counts I and II: Equal Protection Claims 16 Plaintiff brings two Federal Civil Rights Claims under 42 U.S.C. § 1983 against 17 both Detective Bailey and Officer Smith. (Doc 1 at 14.) Plaintiff alleges that Officers 18 Bailey and Smith violated her rights under the Fourteenth Amendment by discriminating 19 against her because of her race (Count I) and her gender (Count II). (Id.) Because Officers 20 Bailey and Smith were acting on behalf of SPD, the first step in the analysis asks whether 21 they are entitled to a qualified immunity defense. Wong v. United States, 373 F.3d 952, 22 957 (9th Cir. 2004) (“[G]overnment officials are entitled to raise the qualified immunity 23 defense immediately, on a motion to dismiss the complaint, to protect against the burdens 24 of discovery and other pre-trial procedures.”). For the reasons explained below, the Court 25 finds these officers are entitled to qualified immunity. However, even if they were not 26 entitled to qualified immunity, the Court also finds that Plaintiff insufficiently pleads 27 discrimination, either for race or for gender. The Court will address these findings in turn. 28 a. Qualified Immunity -4- 1 Government officials enjoy qualified immunity from civil damages unless their 2 conduct violates “clearly established statutory or constitutional rights of which a reasonable 3 person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). In deciding 4 if qualified immunity applies, the Court must determine: (1) whether the facts show the 5 officer’s conduct violated a constitutional right; and (2) whether that right was clearly 6 established at the time of the violation. Hopkins v. Bonvicino, 573 F.3d 752, 762 (9th Cir. 7 2009). Although “‘it is often beneficial’ to perform the analysis in the sequence outlined 8 above,” id. (quoting Pearson v. Callahan, 555 U.S. 223, 236 (2009)), courts are “permitted 9 to exercise their sound discretion in deciding which of the two prongs of the qualified 10 immunity analysis should be addressed first in light of the circumstances in the particular 11 case at hand.” Pearson, 555 U.S. at 236. 12 Whether a right was clearly established must be determined “in light of the specific 13 context of the case, not as a broad general proposition.” Mullenix v. Luna, 577 U.S. 7, 12 14 (2015) (quoting Brosseau v. Haugen, 543 U.S. 194, 198 (2004) (per curiam)). “[T]he 15 contours of the right must be sufficiently clear that at the time the allegedly unlawful act is 16 [under]taken, a reasonable official would understand that what he is doing violates that 17 right;” and “in the light of pre-existing law the unlawfulness must be apparent.” Mendoza 18 v. Block, 27 F.3d 1357, 1361 (9th Cir. 1994) (quotations omitted). “Therefore, regardless 19 of whether the constitutional violation occurred, the officer should prevail if the right 20 asserted by the plaintiff was not ‘clearly established’ or the officer could have reasonably 21 believed that his particular conduct was lawful.” Romero v. Kitsap County, 931 F.2d 624, 22 627 (9th Cir. 1991). “Once the defense of qualified immunity is raised by the defendant, 23 the Plaintiff bears the burden of showing that the rights allegedly violated were ‘clearly 24 established.’” Maples v. Pinal County, 453 F. Supp. 3d 1314, 1320 (D. Ariz. 2020) 25 (quoting LSO Ltd. v. Stroh, 205 F.3d 1146, 1157 (9th Cir. 2000)). 26 Plaintiff alleges that Detective Bailey and Officer Smith “knowingly violated the 27 law by targeting Plaintiff Durr due to her race and/or gender” therefore qualified immunity 28 is not appropriate. (Doc. 15 at 9.) Plaintiff also claims her complaint “alleges a series of -5- 1 events that conclude Ms. Durr was targeted by Defendants.” (Id.) Defendants allege that 2 Plaintiff’s complaint is conclusory, and that her “reference to vague and abstract 3 constitutional rights is woefully inadequate and cannot overcome the individual 4 Defendants’ entitlement to qualified immunity.” (Doc. 16 at 5.) The Court agrees that 5 Plaintiff’s complaint inadequately alleges that Defendants violated a clearly established 6 right for qualified immunity purposes. S.B. v. County of San Diego, 864 F.3d 1010, 1015 7 (9th Cir. 2017); City and County of San Francisco v. Sheehan, 575 U.S. 600, 613 (2015) 8 (directing the Ninth Circuit to not define clearly established rights with a “high level of 9 generality”). 10 As to Detective Bailey, Plaintiff alleges that “he sent a false report to the State 11 Liquor Department” and “unlawfully broke locks” and entered Loyalty Lounge looking to 12 link Loyalty to the violence happening around the area. (Doc 1 at 4 ¶ 20; 7 ¶ 33.) First, 13 Plaintiff offers no evidence supporting that Detective Bailey’s report was false. Second, 14 even if these allegations are taken as true, it is not clearly established that at the time the 15 inspection was conducted and the report was sent that it was a constitutional violation to 16 inspect an establishment for liquor violations and to send the results of that inspection to 17 the Department. Day v. Henry, No. CV-21-01332-PHX-GMS, 2023 WL 5095071, at *6 18 (D. Ariz. Aug. 9, 2023) (noting that liquor licensees are subject to “on-site liquor 19 inspections, investigation of complaints, covert underage buyer programs, audits and other 20 financial inspections, and investigation of records to determine compliance with Arizona 21 liquor laws”). Therefore, the Court finds that Plaintiff has failed to allege that Detective 22 Bailey, either through his report or subsequent inspection, violated Plaintiff’s clearly 23 established rights, or that he acted unreasonably. Accordingly, the Court finds Detective 24 Bailey is entitled to qualified immunity as applied to Counts I and II. 25 As to Officer Smith, Plaintiff appears to allege that by “demanding that [Loyalty’s] 26 fence be removed immediately” because it was a zoning violation and subsequently issuing 27 citations and noncompliance notices to the landlord for said violation, he was harassing her 28 due to her race and gender. (Doc. 1 at 6 ¶¶ 30–33.) Despite this, Plaintiff conceded that -6- 1 she installed the fence, and appears to recognize she knew it was not allowed by the zoning 2 ordinance. (Id. at ¶¶ 29–31.) Plaintiff is unable to show that this conduct violated any 3 clearly established right, as Officer Smith was specifically authorized to enforce zoning 4 violations. See Scottsdale Zoning Ordinance § 1.201 (the “Zoning Administrator shall 5 enforce this Zoning Ordinance.”); Scottsdale Zoning Ordinance § 1.1401 (“Any person, 6 firm, corporation, partnership, or association, whether as principal, owner, agent, tenant, 7 or otherwise, who violates, disobeys, omits, or refuses to comply with, or who resists the 8 enforcement of any of the provisions of this Zoning Ordinance is subject to a civil sanction 9 (by issuance of a civil citation or a long form complaint) or administrative remedy, 10 including an administrative consent order.”); see also Henry v. City of Somerton, CV-18- 11 03058-PHX-DJH, 2021 WL 2514686, at *7 (D. Ariz. June 17, 2021) (finding that a 12 reasonable code enforcement officer would not have considered issuing code citations to 13 plaintiff to have violated plaintiff’s “constitutional rights” against discrimination based on 14 religion). Similarly, a reasonable officer in Officer Smith’s shoes likely would not have 15 presumed that carrying out his job as a zoning enforcement officer in issuing zoning 16 violation citations was violating any of Plaintiff’s clearly established rights. Plaintiff 17 appears to allege that these citations were issued because of her gender and/or race, 18 however she also concedes that Loyalty Lounge was in violation of the zoning code. 19 Therefore, Plaintiff has failed to allege that Officer Smith, at the time of the citation, 20 violated one of her clearly established rights, or further that he acted unreasonably. 21 Accordingly, the Court finds Officer Smith is entitled to qualified immunity as to Counts I 22 and II. 23 b. Equal Protection 24 Even if Detective Bailey and Officer Smith were not entitled to qualified immunity, 25 Plaintiff has not established an equal protection claim. Under § 1983, “[e]very person who, 26 under color of [law] . . . , subjects, or causes to be subjected, any citizen of the United 27 States . . . to the deprivation of any rights, privileges, or immunities secured by the 28 Constitution and the laws, shall be liable to the party injured.” 42 U.S.C. § 1983. To -7- 1 establish a § 1983 equal protection violation, a plaintiff “must show that the defendants, 2 acting under color of state law, discriminated against [him] as [a] member[ ] of an 3 identifiable class and that the discrimination was intentional.” Flores v. Morgan Hill 4 Unified Sch. Dist., 324 F.3d 1130, 1134 (9th Cir. 2003) (internal citations omitted). To 5 find a defendant acted with intent to discriminate, a plaintiff must show that defendant 6 “selected or reaffirmed a particular course of action at least in part ‘because of,’ not merely 7 ‘in spite of,’ its adverse effects upon an identifiable group.” 8 Massachusetts v. Feeney, 442 U.S. 256, 279 (1979). In addition to showing that a state 9 actor discriminated against them because of their status as a protected class —here race 10 and gender —a plaintiff must show that they were treated differently than similarly situated 11 actors. See Lam v. City and County of San Francisco, 868 F. Supp. 2d 928, 951 (N.D. Cal. 12 2012), aff’d, 565 Fed. App’x. 641 (9th Cir. 2014) (unpublished). Personnel Adm’r of 13 Defendants argue that as applied here, Plaintiff has failed to allege either intent to 14 discriminate or that she was treated differently than other similarly situated actors— 15 specifically bar or restaurant owners in the Scottsdale community. (Doc. 15 at 11.) The 16 Court generally agrees. The closest Plaintiff’s complaint gets to specifically alleging intent 17 is when discussing zoning citation hearing. (Doc 1 at 8 ¶ 42.) Plaintiff alleges that 18 Defendants constructed “intentional delays” in the hearing process. (Id.) However, 19 Plaintiff does allege that “Defendants were targeting Loyalty’s and did so because Plaintiff 20 Durr is a Black female and police did not want her son around, who is also Black.” (Id. at 21 11 ¶ 56.) Reading this statement in the light most favorable to Plaintiff, the Court could 22 consider this an allegation of intent for equal protection claim reasons. Even so, given that 23 Plaintiff entered into a consent decree accepting liquor violations, and conceded zoning 24 violations in her complaint, it would be hard to find, even at this stage in the litigation, that 25 Defendants acted with an intent other than enforcing the liquor regulations and the 26 Scottsdale Zoning Ordinances. Further, even if the Court found that Plaintiff adequately 27 alleged intent, she fails to allege that she was treated differently from other restaurant or 28 bar owners in the area. The closest she gets to this allegation is by conclusory alleging that -8- 1 Detective Bailey’s original inspection “was the start” of “harassing and disparate treatment 2 from other businesses.” (Doc. 1 at 4.) She does not point to any facts expounding on how 3 other businesses were treated to support this conclusion. Therefore, the Court finds 4 Plaintiff fails to allege equal protection. Accordingly, Count I and II fail. 5 C. Count III: Monell Claim 6 In Count III Plaintiffs allege that the City of Scottsdale (the “City”) has violated 7 their constitutional rights under Monell v. Department of Social Services, 436 U.S. 658 8 (1978). Specifically, Plaintiffs allege that the City “either failed to property hire, supervise, 9 discipline, monitor, terminate and/or train its employees and/or failed to establish policies 10 and procedures” to prevent unqualified officers to be retained by SPD. (Doc. 1 at 16 ¶ 82.) 11 Plaintiffs further allege that these failures led to their injuries, and proximately caused the 12 violation of their constitutional rights. (Id. at ¶ 85.) Defendants argue that Plaintiffs’ 13 Complaint has failed to establish any of the necessary Monell elements to sustain a claim. 14 (Doc. 15 at 12.) The Court agrees. 15 “[T]o be liable under Monell, Plaintiffs must show: (1) that Plaintiffs were deprived 16 of a constitutional right; (2) that the City had a policy; (3) that the policy is deliberately 17 indifferent to the Plaintiffs’ constitutional right; and (4) that the policy was the moving 18 force behind the constitutional violation.” Snyder v. City & County of San Francisco, 288 19 Fed. Appx. 346, 348 (9th Cir. 2008) (citing Oviatt v. Pearce, 954 F.2d 1470, 1474 (9th Cir. 20 1992)). 21 As to the first element, the Court already found that Detective Bailey and Officer 22 Smith did not violate Plaintiffs’ equal protection rights under the Fourteenth Amendment. 23 However even if Plaintiffs had met this element, as Defendants note, Plaintiffs have failed 24 to meet the second. Plaintiffs have failed to identify any specific “policy” implemented by 25 the City that gives rise to this claim. The closest Plaintiffs come to making this allegation 26 is a generic reference to unknown hiring and training policies. (Doc. 1 at 15 ¶ 84.) This is 27 not enough to sustain a Monell claim. See Jensen v. City of Garden Grove, 2021 WL 28 3579415, at *3 (C.D. Cal. Apr. 22, 2021) (finding that Monell claims must allege “specific -9- 1 policies, practices, or customs contributed to the alleged constitutional violations and what 2 specific constitutional violations occurred”). 3 Plaintiffs have failed to identify a policy, let alone a policy with a causal link to any 4 of their alleged harms. See Tsao v. Desert Palace, Inc., 698 F.3d 1128, 1146 (9th Cir. 5 2012) (“Under Monell, a plaintiff must also show that the policy at issue was the 6 “actionable cause” of the constitutional violation, which requires showing both but for and 7 proximate causation.”) (emphasis added). Further, Plaintiffs appear to allege the harm 8 caused by the City’s policies is the loss of Loyalty’s liquor license. However, per the 9 consent decree this is not the case. From the facts here, Loyalty lost its liquor license 10 because of admitted liquor law violations. 11 Because Plaintiffs have failed to allege the deprivation of a constitutional right, a 12 City policy violating a constitutional right, or a link between a policy and the alleged harm, 13 the Court finds Plaintiffs’ Monell claim, Count III, fails. 14 D. Count IV: Gross Negligence Claim 15 In Count IV Plaintiffs allege that all Defendants reported “false” information to the 16 Department, and that Detective Bailey and Officer Smith gave false testimony, and 17 therefore Defendants engaged in gross negligence against Plaintiff. (Doc. 1 at 16 ¶ 89.) 18 Defendants argue that Plaintiff’s claim fails because Defendants owed Plaintiff no duty. 19 (Doc. 15 at 13.) 20 Public employees may be subject to tort liability for their negligence. Greenwood 21 v. State, 175 P.3d 687, 691 (Ariz. Ct. App. 2008.). However, to have a gross negligence 22 claim against an officer under Arizona law, a plaintiff must allege that “that the conduct of 23 the police was outside the duty and standard of care required of them.” Cullison v. City of 24 Peoria, 584 P.2d 1156, 1158 (Ariz. 1978). Accordingly, the first step under this framework 25 is to determine whether the official owed a duty of care to plaintiff. “Arizona courts have 26 found that police conduct has created a special relationship giving rise to a duty only in 27 specific circumstances.” Hogue v. City of Phoenix, 378 P.3d 720, 724 (Ariz. Ct. App. 28 2016). For there to be a duty owed, there must be some kind of special relationship based - 10 - 1 on “contract, family relations, or conduct undertaken by the defendant.” Gipson v. Casey, 2 150 P.3d 228, 232 (Ariz. 2007). 3 Here, Plaintiffs do not point to a special relationship, by conduct or otherwise, that 4 gives rise to a duty of care. As Defendants note, Detective Bailey and Officer Smith did 5 not have a relationship of care with Plaintiffs but were instead investigating. Instead of 6 contending that a special relationship was present, Plaintiffs argue that knowingly giving 7 false testimony can amount to gross negligence regardless of duty. In making this 8 argument, Plaintiffs filed supplemental authority with the Court. (Doc. 19.) The Court 9 finds these cases unpersuasive. First, Plaintiff cites Spooner v. City of Phoenix, 435 P.3d 10 462 (Ariz. Ct. App. 2018). In Spooner, a plaintiff brought negligence claims against a city 11 and an officer for claims arising out of the officer’s testimony before a grand jury. Id. at 12 464–65. The Court did not walk through a negligence analysis, but rather found the officer 13 was entitled to qualified immunity. Id. at 467–68. Plaintiffs’ supplemental notice merely 14 cites cherry-picked dicta, which this Court will not use as part of its holding. Next, Plaintiff 15 cites to Miranda v. City of Casa Grande, No. 2 CA-CV 2022-0030, 2022 WL 17970593 16 (Ariz. Ct. App. June 2, 2023) (mem.) for the proposition that “[k]nowing disregard of a 17 suspect’s consent or knowingly giving false testimony can, in some cases, amount to a 18 police officer’s conscious disregard of the law or the rights of others sufficient to support 19 a claim of gross negligence.” Id. at *4 (cleaned up). The Court is not moved by Plaintiffs’ 20 cherry-picked quotation because directly after this quote the court states “[b]ut the claimant 21 must show wanton misconduct that is flagrant and evinces a lawless and destructive spirit.” 22 Id. As explained throughout this Order, there is nothing in Plaintiffs’ complaint that 23 evidences Detective Bailey acting with wanton misconduct or a destructive spirit. 24 25 Accordingly, the Court finds Plaintiffs’ claim for gross negligence fails on the pleadings. 26 E. Count V: Interference with Contract Claim 27 In Count VI Plaintiffs appear to allege that Defendants interfered with Plaintiffs’ 28 lease with their landlord and sale of the business. (Doc. 1 at 16 ¶ 92.) This appears to be - 11 - 1 a claim for tortious interference with business expectancy and a claim that Defendants 2 interfered with Plaintiffs’ lease. To have a claim for tortious interference under Arizona 3 law a plaintiff must show be able to “identify the specific relationship with which the 4 defendant interfered.” Dube v. Likins, 167 P.3d 93, 101 (Ariz. Ct. App. 2007). The claim 5 must further allege “a colorable economic relationship between the plaintiff and a third 6 party with the potential to develop into a full contractual relationship.” Id. (internal 7 citations omitted). “[T]o prevail on a claim of tortious interference with a business 8 relationship, when the relationship is prospective, there must be a reasonable assurance that 9 the contract or relationship would have been entered into but for the interference.” S. Union 10 Co. v. Sw. Gas Corp., 180 F. Supp. 2d 1021, 1048 (D. Ariz. 2002) (cleaned up). 11 Here, Plaintiffs allege without supporting facts that they were in the process of 12 selling Loyalty, and that they had an existing relationship with their landlord that 13 Defendants, through their actions reporting zoning and liquor violations, interfered with. 14 (Doc. 16 at 14.) That said, Plaintiffs have not pointed to any contract either with the 15 landlord or with these unidentified potential buyers. As to the lease with the landlord, 16 outside of the Scottsdale Zoning Board notifying the landlord of noncompliance with 17 zoning regulations, Plaintiff has not identified any actions whereby Defendants 18 “interfered” with their lease. (Doc. 1 at 7 ¶ 36.) Plaintiffs also do not offer any facts 19 supporting how these reports fall outside the scope of their lease agreement. As to the 20 purported agreement to sell Loyalty, all Plaintiffs allege is that Plaintiff Durr “attempted 21 to sell the business and the landlord continued to block the sale so that it could get a new 22 tenant.” (Id. at 13 ¶ 70.) Plaintiffs further allege that the landlord was working in 23 conjunction with Defendants. (Id. ¶ 71.) Plaintiff offers no allegations of specific actions 24 by either the landlord or Defendants that support these conclusory statements. 25 Additionally, Plaintiffs’ complaint illuminates that she only tried to sell Loyalty Lounge 26 after Plaintiff Durr surrendered her liquor license, making the allegation that police 27 interfered with an ongoing sale factually impossible. 28 Accordingly, Plaintiff has failed to plead a colorable claim for interference with contract. - 12 - (Doc. 1 at 13 ¶¶ 69–71.) 1 F. Count VI: Abuse of Process Claim 2 In Count VI Plaintiffs bring abuse of process claims against all Defendants, except 3 Officer Smith. (Doc. 1 at 17.) To have an abuse of process claim a plaintiff must allege 4 both that there was (1) a willful act in the use of judicial process (2) and that it was used 5 for an ulterior purpose that is not proper in the regular conduct of the proceedings. Crackel 6 v. Allstate Ins. Co., 92 P.3d 882, 887 (Ariz. Ct. App. 2004). A party can demonstrate an 7 ulterior motive by “showing that the process has been used primarily to accomplish a 8 purpose for which the process was not designed.” Id. (cleaned up). “[A] plaintiff must 9 show that the defendant’s improper purpose was the primary motivation for its 10 actions, not merely an incidental motivation.” Id. at 889 (citing Nienstedt v. Wetzel, 11 651 P.2d 876, 882 (Ariz. Ct. App. 1982)). Further, “Arizona interprets ‘process’ as 12 encompassing “the entire range of procedures incident to the litigation process.” Id. at 887 13 (internal citations omitted). 14 Plaintiffs allege that Defendant Bailey “committed a willful act when he presented 15 fabricated records to the Arizona Department of Liquor” and “Officer Smith committed a 16 willful act when he presented false information related to the City of Scottsdale 17 proceedings” and that both of these acts were done for the ulterior purpose of “not 18 want[ing] a Black female run business in the area.” (Doc. 1 at 17 ¶¶ 98–99.) Plaintiffs 19 allege that this gives rise to a claim for abuse of process under Arizona law. (Id. ¶ 97.) 20 Defendants argue that Plaintiffs do not present a colorable claim for abuse of process 21 because (1) providing information to another body is not “process” under Arizona law and 22 (2) even if it were, Detective Bailey is entitled to testimonial immunity in providing 23 information to the Department. (Doc. 14 at 16.) The Court agrees with Defendants. 24 First, Detective Bailey providing information to the Department is likely not 25 considered “process” under Arizona law. In Goldman v. Sahl, 462 P.3d 1017 (Ariz. Ct. 26 App. 2020), the court considered whether defendant’s filing of a claim with the Arizona 27 Bar constituted “process” under Arizona law. The court found that this was not considered 28 process because “the mere filing of a bar charge is not ‘use’ of a judicial process.” Id. at - 13 - 1 1035. 2 administrative-like body did not constitute “process,” Detective Bailey’s filing of a report 3 with an administrative agency also cannot be found to be process to sustain an abuse of 4 process claim. The Court generally agrees with this analysis, however, it is not dispositive. 5 Even if Detective Bailey’s relaying of information to the Department constitutes as 6 “judicial process,” Plaintiffs’ claim fails because Officer Bailey is entitled to immunity 7 from civil liability for this “testimony.” See Drummond v. Stahl, 618 P.2d 616, 619 (Ariz. 8 Ct. App. 1980) (“A statement made in the course of a judicial hearing is absolutely 9 privileged as long as it bears some relation to the subject judicial proceeding.”) Defendants argue that like in Goldman, where the mere filing with an 10 Additionally, Plaintiffs’ statements about the motivation of Defendants Bailey and 11 Smith is entirely conclusory and speculative, which is insufficient to state a claim for abuse 12 of process. See Crackel, 92 P.3d at 889 (“[A] claimant must present more than mere 13 speculation to support the assertion that the defendant has used court processes with an 14 improper intent.”). Plaintiff fails to show that animus toward her was Defendants’ purpose, 15 let alone primary purpose as required for an abuse of process claim. See id. (“The 16 significance of th[e] word [“primarily”] is that there is no action for abuse of process when 17 the process is used for the purpose for which it is intended, but there is an incidental motive 18 of spite or an ulterior purpose of benefit to the defendant.”) (quoting Restatement (Second) 19 of Torts § 682 cmt. b (1977)). 20 Accordingly, because reporting information cannot be said to be engaging in the 21 judicial process, or alternatively because Detective Bailey has testimonial immunity and 22 Plaintiff has failed to show a malicious primary intent in his reporting, the Court finds that 23 Plaintiffs’ abuse of process claim fails. 24 IV. LEAVE TO AMEND 25 “Leave to amend need not be given if a complaint, as amended, is subject to 26 dismissal.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 538 (9th Cir. 1989). 27 The Court’s discretion to deny leave to amend is particularly broad where Plaintiff has 28 previously been permitted to amend his complaint. Sisseton-Wahpeton Sioux Tribe v. - 14 - 1 United States, 90 F.3d 351, 355 (9th Cir. 1996). The Court finds that further attempts to 2 amend Plaintiffs’ equal protection and Monell claims (Counts I, II, and III) would be futile. 3 However, the Court will grant leave to amend as to Plaintiffs’ state law claims (Counts IV, 4 V and VI). 5 V. CONCLUSION 6 For the reasons discussed above, 7 IT IS HEREBY ORDERED granting Defendants’ Motion for Judgment on the 8 9 Pleadings (Doc. 14). IT IS FURTHER ORDERED dismissing claims I, II and III with prejudice. 10 IT IS FURTHER ORDERED granting Plaintiff leave to amend claims IV, V and 11 VI Plaintiff must file her First Amended Complaint no later than ten (10) days after the 12 date of this ruling. 13 Dated this 27th day of March, 2024. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 15 -

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