Ricky Dean's Inc., et al v. Marcellino, M.D. et al

Filing 33

MEMORANDUM AND ORDER denying #14 Motion for Preliminary Injunction. Signed by District Judge Eric F. Melgren on 11/19/2020. (cm)

Case 5:20-cv-04063-EFM-ADM Document 33 Filed 11/19/20 Page 1 of 7

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

RICKY DEAN’S, INC., d/b/a THE
SANDBAR; RITA “PEACH” MADL,
Plaintiffs,

vs.

Case No. 5:20-CV-04063-EFM-ADM

THOMAS MARCELLINO, M.D., et al.,
Defendants.

MEMORANDUM AND ORDER
Before the Court is Plaintiffs’ Motion for Preliminary Injunction (Docs. 14 & 15).
Plaintiffs request that the Court preliminarily enjoin Defendants from enforcing a Douglas County
emergency public health order requiring restaurants and bars with liquor licenses to cease serving
alcohol at 11:00 p.m. and to close no later than 12:00 a.m. each night. For the reasons discussed
below, the Court denies the motion.
I.

Factual and Procedural Background

Rita “Peach” Madl is the president of Ricky Dean’s, Inc., a Kansas for-profit corporation
doing business as The Sandbar, in Lawrence, Kansas. Ricky Dean’s holds a Kansas Food
Establishment License and Drinking Establishment License pursuant to Kansas law. On October
1, 2020, in response to the COVID-19 pandemic, Defendant Thomas Marcellino, M.D., the
Lawrence-Douglas County Local Health Officer, issued an emergency public health order

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imposing various restrictions on businesses and individuals in Douglas County, including limiting
business hours of restaurants and bars with liquor licenses. Specifically, Section 4.c of the Order
provides:
[R]estaurants and bars with liquor licenses are required to cease serving alcohol at
11:00 pm and shall close their premises, including all outside seating areas or
patios, to customers no later than 12:00 am/midnight. Restaurants and bars serving
alcohol may conduct carry-out, curbside and off-premises delivery of food items
after 11:00 pm. There shall be no carry-out, curbside or off-premises delivery of
alcoholic beverages after 11:00 pm. Restaurants that do not serve alcohol are not
required to close at 12:00 am/midnight.1
The Order remains in effect “until rescinded or until modified.”2
On October 9, 2020, Plaintiffs filed their Verified Complaint (Doc. 1), requesting
declaratory and injunctive relief. Plaintiffs request a finding that Dr. Marcellino’s order violates
Plaintiffs’ procedural due process, substantive due process, and equal protection rights under the
United States Constitution. Plaintiffs further request a finding that the Kansas statutes enabling
Dr. Marcellino’s order are void for vagueness under the U.S. Constitution and violate the
separation of powers doctrine under the Kansas Constitution. In the alternative, Plaintiffs assert
that Dr. Marcellino exceeded his statutory authority in issuing the order. Plaintiffs now request
that the Court preliminarily enjoin enforcement of Dr. Marcellino’s order on procedural due
process grounds until such time as this case is fully adjudicated.
II.

Legal Standard

To be entitled to a preliminary injunction, the moving party must demonstrate: (1) that
there is a substantial likelihood that it will eventually prevail on the merits; (2) that it will suffer

1

Pls.’ V. Compl., Ex. 1, Doc. 1-1, p. 2.

2

Id. at p. 7.

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irreparable injury unless the injunction issues; (3) that the threatened injury to the movant
outweighs whatever damages the proposed injunction may cause the opposing parties; and (4) that
the injunction, if issued, would not be adverse to the public interest.3 “Because a preliminary
injunction is an extraordinary remedy, the movant’s right to relief must be clear and unequivocal.”4
Further, courts are cautioned “against granting injunctions that alter the status quo.”5 Whether to
grant or deny a preliminary injunction rests within the discretion of the district court.6
III.

Analysis

The Due Process Clause of the Fourteenth Amendment guarantees that no person shall be
deprived “of life, liberty, or property, without due process of law.”7 This “imposes constraints on
governmental decisions which deprive individuals of ‘liberty’ or ‘property’ interests.”8 To
establish a procedural due process claim, a plaintiff must show that (1) he possessed a
constitutionally protected liberty or property interest; (2) he was deprived of that interest; and (3)
he was not “afforded an appropriate level of process.”9 If a plaintiff fails to establish the first
element of a due process claim, the Court need not consider whether the government employed an

3

Dine Citizens Against Ruining Our Env’t v. Jewell, 839 F.3d 1276, 1281 (10th Cir. 2016) (quoting
Wilderness Workshop v. BLM, 531 F.3d 1220, 1223 (10th Cir. 2008)).
4

Id. at 1281.

5

AG of Okla. v. Tyson Foods, Inc., 565 F.3d 769, 776 (10th Cir. 2009) (citations omitted).

6

Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC, 562 F.3d 1067, 1070 (10th Cir. 2009).

7

U.S. Const. amend. XIV, § 1.

8

Mathews v. Eldridge, 424 U.S. 319, 332 (1976).

9

Couture v. Bd. of Educ., 535 F.3d 1246, 1256 (10th Cir. 2008) (citations omitted).

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adequate level of procedural due process.10 Thus, the threshold issue is whether Plaintiffs have an
existing liberty or property interest.
Plaintiffs identify two putative property interests. First, a property interest in their liquor
license, and second, in the right to use their property after midnight. “To have a property interest,
an individual ‘must have more than a unilateral expectation of it. He must, instead, have a
legitimate claim of entitlement to it.’ ” 11 “Property interests . . . are not created by the Constitution.
Rather they are created and their dimensions are defined by existing rules or understandings that
stem from an independent source such as state law . . . .”12 “Thus, statutes, ordinances, contracts,
implied contracts, and rules and understandings developed by state officials create and define
constitutionally protected property interests.”13
In Kansas, a liquor license is “purely a personal privilege” and does not “constitute personal
property.”14 Thus, Plaintiffs’ claim of a property interest in their liquor license must fail.
Instructive here, in Rocky Mountain Rogues, Inc. v. Alpine,15 the Bull Moose Saloon asserted a
due process claim arising out of the town’s handling of its liquor license. Citing Wyoming

10

Seifert v. Kan. City Kan. Cmty. Coll., 2010 WL 690938, at *8 (D. Kan. 2010).

11
Brown v. Univ. of Kan., 16 F. Supp. 3d 1275, 1288 (D. Kan. 2014) (quoting Bd. of Regents of State Colls.
v. Roth, 408 U.S. 564, 577 (1972)).
12

Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972).

13

Klaassen v. Univ. of Kan. Sch. of Med., 2015 WL 2400773, at *2 (D. Kan. 2015) (citing Fisher Sand &
Gravel, Co. v. Giron, 465 F. App’x 774, 779 (10th Cir. 2012)).
14

K.S.A. 41-326(a); see also Murphy v. Curtis, 184 Kan. 291, 336 P.2d 411, 414 (1959) (analyzing prior
version of K.S.A. 41-326 with the same operative language and holding that a liquor license “is a personal privilege
and not a property right”).
15

375 F. App’x. 887 (10th Cir. 2010).

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precedent holding that “a liquor license is a mere privilege,”16 the Tenth Circuit concluded that
“under Wyoming law, the Bull Moose had no protected property interest in the continuation of its
liquor license.”17 Similarly, other courts have looked to state law in determining whether a plaintiff
possessed a protected liberty or property interest in its liquor license.18
Although Plaintiffs argue that the Legislature’s requirement that no license “be suspended,
involuntarily cancelled or revoked unless there is an opportunity for a hearing before the director”
evidences that the Legislature “clearly acknowledges that due process rights exist for license
holders,”19 the Court cannot conclude that the Legislature intended broader protections for
licensees than those enumerated in the statutory scheme.

Thus, Plaintiffs’ claim of a

constitutionally protected property interest in their liquor license must fail.
Plaintiffs next claim that they have a protectable property interest in using their indoor and
outdoor property between midnight and 2 a.m., arguing that Kansas law otherwise allows the use
of the property for alcohol sales during that timeframe.20 Plaintiffs fail, however, to develop their

16

Id. at 895 (quoting Albertson’s, Inc. v. Sheridan, 33 P.3d 161, 186 (Wyo. 2001)).

17

Id.

18

See, e.g., Clarke v. Goodson, 2018 WL 4610652, at *7 (M.D. Ala. 2018), report and recommendation
adopted, 2018 WL 4609067 (M.D. Ala. 2018), appeal dismissed, 2019 WL 5678577 (11th Cir. 2019), cert. denied,
140 S. Ct. 936 (2020) (holding that no liberty interest in a liquor license existed where Alabama had determined that
such licenses were “merely a privilege”); G & G Fremont, Ltd. Liab. Co. v. Crazy Ely WesternVillage, Ltd. Liab. Co.,
202 F. Supp. 3d 1175, 1180 (D. Nev. 2016) (holding that Nevada law does not recognize a “constitutionally protected
property interest” in liquor licenses); Double Six Saloon, Inc. v. City of Pac., 2010 WL 4279069, at *2 (E.D. Mo.
2010), reconsideration granted on other grounds, 2011 WL 1936039 (E.D. Mo. 2011) (holding that because “Missouri
courts have held that, ‘no protectable property interest exists in the renewal of a municipal liquor
license’ . . . . plaintiffs’ liquor license cannot form the basis for any allegation of a protected property interest”)
(citations omitted).
19

Pls.’ Mem. in Supp., Doc. 15, p. 13.

20

Id. at p. 13–14.

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argument any further or provide any legal authority supporting their claim. Thus, the Court cannot
conclude that Plaintiffs’ right to relief on this basis is “clear and unequivocal.”21
Finally, Plaintiffs argue that Dr. Marcellino’s order deprives them of their liberty interest
in earning a living. Although the Supreme Court has recognized a liberty interest in the right of
individuals to work, it has not addressed the extent to which such a right protects business
operations.22

Further, the Tenth Circuit has opined that “it seems self-evident that

[businessowners] have a significant interest in the health and success” of their businesses, but has
not explicitly held that the interest is constitutionally protected,23 and other courts have split on the
issue.24 In the absence of a “clear and unequivocal” right to relief, the Court cannot grant the
“extraordinary remedy” of a preliminary injunction. Because Plaintiffs have not met their burden
as to the existence of a protected liberty interest, the Court need not analyze whether Plaintiffs
were afforded an appropriate level of procedural due process.

21

Dine Citizens, 839 F.3d at 1281.

22

See Railway Emps.’ Dep’t v. Hanson, 351 U.S. 225, 234 (1956) (“It is said that the right to work, which
the Court has frequently included in the concept of ‘liberty’ within the meaning of the Due Process Clauses . . . may
not be denied by the Congress.”) (citations omitted); Conn v. Gabbert, 526 U.S. 286, 291–92 (1999) (“[T]his Court
has indicated that the liberty component of the Fourteenth Amendment’s Due Process Clause includes some
generalized due process right to choose one’s field of private employment . . . .”) (citations omitted).
23

Ward v. Anderson, 494 F.3d 929, 935 (10th Cir. 2007).

24

See Doss v. Morris, 642 F. App’x 443, 447 (5th Cir. 2016) (holding that although the Fifth Circuit has
recognized a liberty interest in operating a legitimate business, the district court did not err in granting summary
judgment where plaintiffs failed to establish that their “ability to operate their business was significantly altered or
impaired” by government action); Cty. of Butler v. Wolf, 677, 2020 WL 5510690, at *25 (W.D. Pa. 2020) (“There is
no question, then, that the Fourteenth Amendment recognizes a liberty interest in citizens—the Business Plaintiffs
here—to pursue their chosen occupation. The dispositive question is not whether such a right exists, but rather, the
level of infringement upon the right that may be tolerated.”); Xponential Fitness v. Arizona, 2020 WL 3971908, at *5
n. 4 (D. Ariz. 2020) (“[T]he Court is unpersuaded that the right to operate a business is a protected liberty interest.
The cases relied on by Plaintiffs, concern an individual’s right to work, not a franchisor’s right to have its franchisee
operate its business.”); Nahas v. City of Mt. View, 2005 WL 1683617, at *4–5 (N.D. Cal. 2005) (holding that the
plaintiffs failed to show that the Supreme Court has recognized a liberty interest in “owning and operating a business”
and that the defendants’ “interference with a single business opportunity to open a nightclub . . . is not a complete
prohibition of the right to engage in a calling”).

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IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Preliminary Injunction (Doc.
14) is DENIED.
IT IS SO ORDERED.
Dated this 19th day of November, 2020.

ERIC F. MELGREN
UNITED STATES DISTRICT JUDGE

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