Johnson v. Morales et al
ORDER Denying 7 Motion for Temporary Restraining Order and Alternatively for a Preliminary Injunction. Signed by District Judge Thomas L. Ludington. (KWin)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
RITA R JOHNSON,
Case No. 17-cv-12405
Honorable Thomas L. Ludington
TIMOTHY MORALES, et al,
ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER AND
ALTERNATIVELY FOR A PRELIMINARY INJUNCTION
On July 25, 2017, Plaintiff Rita R. Johnson filed a complaint alleging that Defendants
Timothy Morales, Dennis Jordan, and the City of Saginaw violated her due process rights when
they suspended her business license. Compl., ECF No. 1. On August 1, 2017, the parties
submitted a stipulated proposed order requesting the Court adjourn the administrative deadline
for Johnson to appeal the suspension of Johnson’s business license. The Court declined to enter
the order because the Court lacked authority to extend an appeal deadline in a separate
administrative proceeding. ECF No. 4. On August 23, 2017, Johnson filed an amended complaint
which provides additional factual allegations and contains an additional count alleging that
Defendants violated her Fourth Amendment due process rights. ECF No. 5. An attorney for
Defendants has filed an appearance, but Defendants have not been served with either the original
or amended complaint.
On September 9, 2017, Johnson filed a motion for a temporary restraining order and,
alternatively, a motion for a preliminary injunction. ECF No. 7.1 Johnson explains that Timothy
Morales, the City Manager who issued the original “shutdown order,” will be a member of the
panel hearing Johnson’s appeal. Johnson contends that her due process rights will be violated if
the appeal is heard by the same person who originally suspended her business license. For the
reasons that follow, Johnson’s motion will be denied.
At this stage, the well-pleaded factual allegations in Johnson’s complaint will be assumed
to be true. Johnson owns and operates Rita’s Southern Soul Café in Saginaw, Michigan. Am.
Compl. at 1. Defendant Timothy Morales is the Saginaw City Manager. Defendant Denis Jordan
is the City of Saginaw’s Human Resource Director.
On May 6, 2017, Johnson rented out the cafe to a private party. Id. at 2. In the early
morning hours of May 6, 2017, unknown individuals “emerged from a vehicle . . . and began
shooting at Plaintiff’s building.” Id. To her knowledge, Johnson’s guests did not commit any
crime during the assault and Johnson herself has no connection to any of the shooters.
The Saginaw Police Department responded to the shooting. Police Chief Robert Ruth
later opined that the incident was likely gang-related. Id. at 3. Johnson faults the City of Saginaw
for not ordering “the criminal shooters to halt their illegal activities.” Id. at 4. Instead, in reaction
to the shooting, the City of Saginaw took action against Johnson:
Rather than focus efforts on apprehending and stopping the unknown gangmembers who actually acted illegally and unlawfully, Defendant CITY OF
SAGINAW, likely in an attempt to shift blame from its poorly-staffed and
ineffective police department, took adverse action against Plaintiff by suspending
Immediately after filing the motion for a temporary restraining order or preliminary injunction, Johnson filed an
amended motion for a temporary restraining order. The amended motion corrects a scrivener’s error in the title of
the original motion. Because the original motion has been superseded, it will be denied as moot.
her business license for actions for which she is not responsible and for alleged
crimes she did not otherwise commit or authorize
Id. (emphasis in original).
The City of Saginaw also turned off Johnson’s water supply “without notice or authority in a
backhanded way to shut down Plaintiff’s commercial operations.” Id.
The administrative appeal process for challenges to the suspension of business licenses is
governed by the City of Saginaw Code of Ordinances, 110.06(E). Pursuant to 110.06(F), if “the
City Manager or their designee” determines that an immediate suspension of a business license is
necessary, they may unilaterally order an immediate suspension. But the City Manager or their
designee must hold a hearing within five days to allow the license holder to challenge the
suspension. Id. On May 8, 2017, Timothy Morales “issued a governmental order entitled Notice
of Immediate Suspension of Business Activity whereby he, as an agent of Defendant CITY OF
SAGINAW, ordered the halt of all (and not just illegal) activities, including all commercial
activities of any type.” Am. Compl. at 4. (emphasis in original). Johnson alleges that the
shutdown order was intended to destroy Johnson’s commercial interests.
Pursuant to the governing city ordinance, a hearing on the suspension was scheduled for
May 11, 2017. Denis Jordan was designated as the hearing officer. According to Johnson,
Timothy Morales is the immediate supervisor of Defendant Jordan. The hearing was held as
scheduled, but Johnson alleges that Jordan “allowed hearsay testimony, dubious evidence, and
irrelevant testimony.” Id. at 4. Johnson highlights two examples of misconduct during the
hearing. First, Johnson asserts that the City of Saginaw was represented at the hearing by a firm
which had previously represented Jordan. Id. Despite this connection, Jordan did not recuse
himself from the hearing. Second, Jordan permitted Police Chief Ruth to testify about the events
of May 6, 2017, even though he had not been present at the scene or ensuing investigation.
Two months after the hearing, Jordan denied the appeal. Id. at 6. While Jordan was
considering the appeal, Johnson’s counsel asked “how the City could have a Human Resources
Director serve as a neutral, detached decision maker and how it could allow hearsay and
conjecture as evidence in such a hearing.” Id. at 5. In response, counsel for the City suggested
that because it was only an administrative hearing that level of due process was not required. Id.
Johnson’s counsel then submitted a number of Freedom of Information Act Requests seeking
information regarding the City’s processes and procedures. Id.
On July 11, 2017, “City Attorney Amy Lusk introduced a proposal to the City of
Saginaw City Council to amend the City Ordinance permitting the appointment of employees of
the City of Saginaw as the hearing officer to conduct hearings like the one undertaken against
Plaintiff.” Id. The update to the City Ordinance has been approved.
In her complaint, Johnson frames four Counts which all allege that her Fourth
Amendment due process rights were violated. In Count I, Johnson contends that Dennis Jordan
was not a neutral and detached arbiter because he was reviewing his supervisor’s actions. In
Count II, Johnson argues that her “constitutionally protected right of property” was violated
when the City of Saginaw suspended her business license without providing a pre-suspension
hearing. In Count II, Johnson argues that the City Ordinance which requires a public hearing
after license suspension is unconstitutional because it places the burden of demonstrating why
the license should not be suspended on Johnson. In Count IV, Johnson argues that her due
process rights will be violated if Timothy Morales is permitted to sit on the three-person panel
which will review Jordan’s decision.
Federal Rule of Civil Procedure 65 provides that a “court may issue a temporary
restraining order without written or oral notice to the adverse party or its attorney” if two
requirements are satisfied: (1) “specific facts in an affidavit or a verified complaint clearly show
that immediate and irreparable injury, loss, or damage will result to the movant before the
adverse party can be heard in opposition”; and (2) “the movant’s attorney certifies in writing any
efforts made to give notice and the reasons why it should not be required.” Fed. R. Civ. P.
Four factors govern whether the Court will issue a temporary restraining order (the same
four factors governing whether to issue a preliminary injunction): (1) whether the plaintiff has
demonstrated a substantial likelihood of success on the merits; (2) whether there is a threat of
irreparable harm to the plaintiff; (3) whether issuance of the injunction would harm others; and
(4) whether the public interest is served by granting injunctive relief. Hamilton’s Bogarts, Inc. v.
Michigan, 501 F.3d 644, 649 (6th Cir. 2007) (citation omitted); see also Ne. Ohio Coal. for
Homeless and Serv. Emps. Intern. Union, Local 1199 v. Blackwell, 467 F.3d 999, 1009 (6th Cir.
2006). “These factors are not prerequisites, but are factors that are to be balanced against each
other.” Overstreet v. Lexington-Fayette Urban Cnty. Gov’t, 305 F.3d 566, 573 (6th Cir. 2002)
In her motion, Johnson requests a temporary restraining order and/or preliminary
injunction preventing Defendant Morales from appearing on the panel which will hear Johnson’s
appeal. Pursuant to 110.06(E)(1), “[a]ny party dissatisfied with the decision of the City Manager
or other appropriate Hearing Officer or body shall have a right to appeal the decision.” The
appeal request must be filed within fourteen days after notice of the suspension, and the hearing
must be scheduled within ten days of receipt of the appeal. That appeal hearing will take place
before a “panel consisting of the City Manager or their designee, the affected department head or
their designee, and the City Clerk or their Designee.” Id. at 110.06(E)(2). “A party aggrieved by
the order or decision of the appeal panel may appeal the decision to a court of competent
jurisdiction as provided by state statutes and court rules.” Id. at 110.06(E)(4).
Here, Morales exercised his discretionary authority to suspend Johnson’s business
license. The immediate appeal of that decision was reviewed by Jordan. Johnson’s next step is to
appeal Jordan’s denial of her appeal to the three-person appeal panel defined in 110.06(E)(2).
The parties have agreed to postpone the deadline to request the appeal panel review until
September 24, 2017. Party Stipulation, ECF No. 7, Ex. 4. Johnson thus requests a decision on her
motion for a temporary restraining order and/or motion for a preliminary injunction on or before
that date. There is no justification for preliminary injunctive relief here, and so Johnson’s motion
will be denied.
Johnson first argues that a temporary restraining order is necessary because there is a
strong likelihood of success on the merits of her claim. Specifically, Johnson argues that
“[f]ederal law is clear that such a process is facially illegal if it allows a person to ultimately
review his or her own decision—he is not a neutral and detached decisionmaker.” Mot. Temp.
Res. at 11, ECF No. 7. But upon review of the law and Johnson’s allegations, it is clear that no
violation of federal law will occur if Morales appears on the appeal panel.
Johnson argues that the City Ordinance’s procedures violate due process because they do
not involve a neutral and detached arbiter. See Morrissey v. Brewer, 408 U.S. 471, 489 (1972)
(explaining that the “minimum requirements of due process” in the parole revocation context
include a neutral and detached hearing body). It is well settled that due process protections apply
“to administrative agencies which adjudicate as well as to courts.” Withrow v. Larkin, 421 U.S.
35, 46 (1975). The Supreme Court has held that when the adjudicator has “a pecuniary interest in
the outcome” or “has been the target of personal abuse or criticism from the party before him,”
the “probability of actual bias on the part of the judge or decisionmaker is too high to be
constitutionally tolerable.” Id. at 47.
In Withrow, the district court granted a preliminary injunction which prevented the state
medical examining board from adjudicating the suspension of a doctor’s license because the
board had investigated the charges in question and thus would be reviewing its investigative
decision. Id. at 46. The Supreme Court held that the issuance of the preliminary injunction was
an abuse of discretion:
The contention that the combination of investigative and adjudicative functions
necessarily creates an unconstitutional risk of bias in administrative adjudication
has a much more difficult burden of persuasion to carry [than the argument that
pecuniary interest or personal criticism creates bias]. It must overcome a
presumption of honesty and integrity in those serving as adjudicators; and it must
convince that, under a realistic appraisal of psychological tendencies and human
weakness, conferring investigative and adjudicative powers on the same
individuals poses such a risk of actual bias or prejudgment that the practice must
be forbidden if the guarantee of due process is to be adequately implemented.
Id. at 47.
The Court held that “[t]he initial charge or determination of probable cause and the ultimate
adjudication have different bases and purposes. The fact that the same agency makes them in
tandem and that they relate to the same issues does not result in a procedural due process
violation.” Id. at 58. To summarize: “[T]he combination of investigative and adjudicative
functions does not, without more, constitute a due process violation.” Id. See also Gibson v.
Berryhill, 411 U.S. 564, 579 (1973) (explaining that administrative adjudicators “with substantial
pecuniary interest in legal proceedings should not adjudicate these disputes”).
Simply put, the cases which Johnson relies upon do not stand for the proposition which
she advances. Johnson has identified no case which holds that a decisionmaker who exercises
both adjudicative and executive functions violates due process in the absence of a pecuniary
interest in the outcome. Johnson relies almost exclusively upon Hammond v. Baldwin, 866 F.2d
172, 177 (1989). In Hammond, the Sixth Circuit held that “the entire government of a state
cannot be disqualified from decisionmaking on grounds of bias when all that is alleged is a
general bias in favor of the alleged state interest or policy.” Id. In passing, the Hammond Court
did suggest that bias sufficient to implicate due process may exist when “the decisionmaker was
engaged in both adjudicative and executive functions in violation of the principle of separation of
powers.” Id. (citing Ward v. Village of Monroeville, 409 U.S. 57 (1972) and Meyer v. Niles Twp.,
477 F. Supp. 357 (N.D. Ill. 1979)). But the Hammond Court did not affirmatively hold that the
union of adjudicative and executive functions is a per se violation of due process. And such an
assertion would be inconsistent with both Withrow and the cases which the Hammond Court
In Ward, the Supreme Court confirmed that “‘the mere union of the executive power and
the judicial power in [a mayor] cannot be said to violate due process of law.’” Ward, 409 U.S. at
60 (quoting Tumey v. State of Ohio, 273 U.S. 510, 534 (1972)). Rather, because the mayor was
reviewing appeals of traffic convictions and because the mayor received a portion of the funds
levied via traffic convictions, he was not a neutral and detached arbiter. Id. The fatal problem
was the mayor’s pecuniary interest in the convictions he was reviewing. Likewise, in Meyer, the
district court found that the township supervisors in question had an “interest in protecting
township funds” and thus were not unbiased decisionmakers. 477 F. Supp. at 362. That holding
was both reliant on a finding of a pecuniary interest and apparently incompatible with the Sixth
Circuit’s holding in Hammond that an allegation of “a general bias in favor of the alleged state
interest or policy” is insufficient to violate due process. 866 F.2d at 177. And, most importantly,
the Supreme Court has directly and unequivocally held that the mere union of adjudicative and
executive functions in one person does not, without more, violate due process. Withrow, 421
U.S. at 58.
In the present motion, Johnson argues that her due process rights will be violated if
Morales sits on the appeal panel. But Johnson ignores the fact that Morales will be only one of
three members of the panel. Thus, the suspension will (presumably) be reviewed by two
independent and neutral arbiters. In other words, the suspension will be upheld only if two
neutral adjudicators find that it was appropriate. And, more fundamentally, Johnson has provided
no reason to believe that Morales would be unable to fairly and impartially participate on the
panel. The Supreme Court has directly held (in the case principally relied upon by Johnson) that
due process is not violated simply because a person exercises both executive and adjudicative
functions. Withrow, 421 U.S. at 58. Rather, additional evidence of bias must be shown. There is
no evidence that Morales has a financial interest in the outcome of the hearing and, to this
Court’s knowledge, Johnson has not personally abused or criticized Morales. This Court begins
with the presumption that Morales will honestly and equitably review his decision to suspend
Johnson’s business license, and that presumption has not been called into question. Id. at 47.
Even assuming all facts alleged in Johnson’s complaint to be true, no due process violation is
apparent or imminent. For that reason, Johnson is extremely unlikely to prevail on the merits of
her claim, and a temporary restraining order or preliminary injunction is not warranted.
Even if Johnson could adequately allege a constitutional violation, preliminary injunctive
relief would not be warranted because Johnson has not established that she will suffer irreparable
harm in the interim. “A plaintiff’s harm from the denial of a preliminary injunction is irreparable
if it is not fully compensable by monetary damages.” Overstreet v. Lexington-Fayette Urban Cty.
Gov’t, 305 F.3d 566, 578 (6th Cir. 2002). If a movant has established that violation of his or her
First Amendment rights is likely, irreparable injury has been established. Connection Distrib. Co.
v. Reno, 154 F.3d 281, 288 (6th Cir. 1998) (“With regard to the factor of irreparable injury, for
example, it is well-settled that ‘loss of First Amendment freedoms, for even minimal periods of
time, unquestionably constitutes irreparable injury.’” (quoting Elrod v. Burns, 427 U.S. 347, 373
(1976)). But when, as here, the movant is alleging that his or her due process rights will be
violated, irreparable harm exists only “when there is ‘no legal avenue open [...] by which to
recoup [ ] financial losses.’” United States v. Michigan, 230 F.R.D. 492, 495 (E.D. Mich. 2005)
(quoting Mich. Bell Telephone Co. v. Engler, 257 F.3d 587, 598 (6th Cir.2001)).
Johnson repeatedly alleges in her complaint that the license suspension and protracted
appeals process has resulted in loss of business and income for her. But those allegations
epitomize harm that is fully compensable by monetary damages. And although Johnson argues
that the appeals process will violate her due process rights, any such violation can be remedied
by appeal “to a court of competent jurisdiction” as provided by the City Ordinance.
110.06(E)(4). If the appeal panel rules in her favor, Johnson’s due process rights will not have
been infringed. If the appeal panel affirms the suspension, Johnson may file suit and obtain
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further review. Johnson has identified no risk of irreparable harm that would justify preliminary
Accordingly, it is ORDERED that Plaintiff Johnson’s amended motion for a temporary
restraining order and/or preliminary injunction, ECF No. 7, is DENIED.
It is further ORDERED that Plaintiff Johnson’s original motion for a temporary
restraining order and/or preliminary injunction, ECF No. 6, is DENIED as moot.
Dated: September 15, 2017
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on September 15, 2017.
KELLY WINSLOW, Case Manager
As a final matter, it is questionable whether Johnson has standing to bring this suit. Although exhaustion of state
administrative remedies is not required in 42 U.S.C. § 1983 suits, the administrative action must generally be final
before it is judicially reviewable. See Hammond, 866 F.2d at 175. If the state administrative body has not rendered a
final decision, then no actual and concrete injury sufficient to establish standing exists. Id. In other words, the case
would not yet be ripe for judicial review.
The question of whether finality exists turns on the type of injury alleged: “‘If the injury the [plaintiffs] seek to
redress is harm to their property amounting to a ‘deprivation’ in constitutional terms, a final judgment is required;
however, if the injury is the infirmity of the process, neither a final judgment nor exhaustion is required.’” Bowers v.
City of Flint, 325 F.3d 758, 762 (6th Cir. 2003) (quoting Hammond, 951 F.2d at 704). Johnson’s complaint appears
to advance claims of both procedural infirmities and deprivation of property. As described above, Johnson’s
complaint likely does not state a claim upon which relief can be based regarding the City’s allegedly
unconstitutional procedures. To the extent Johnson’s cognizable claims assert only harm resulting from deprivation
of property, this case may not be ripe. Because Johnson’s complaint frames purported procedural due process
claims, this issue is best left for future resolution (perhaps in a motion to dismiss under Federal Rule of Procedure
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