Harrington v. Nebraska Liquor Control Commission et al

Filing 77

MEMORANDUM AND ORDER - 1) Defendants' motion to dismiss plaintiff's first cause of action is denied as to all defendants. 2) Defendants' motion to dismiss plaintiff's second cause of action is granted. Plaintiff's Fourteent h Amendment Due Process Violations are dismissed as to all defendants. 3) Defendants' motion to dismiss plaintiff's third cause of action is denied as to all defendants. 4) Defendants' motion to dismiss plaintiff's fourth cause of action is denied as to all defendants. 5) Defendants' motion to dismiss plaintiff's fifth cause of action is granted. Plaintiffs allegations of tortious interference with business relationships are dismissed as to all defendants. 6) De fendants' motion to dismiss plaintiff's sixth cause of action is denied as to the City of Lincoln, Nebraska, Chief Tom Casaday, and Chief Jim Peschong and granted as to Officer Russell Fosler. Plaintiffs allegations of negligent hiring, training and supervision, are dismissed as to Officer Fosler. Ordered by Senior Judge Lyle E. Strom. (GJG)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
SHANE HARRINGTON and KALI
RECORDS, LLC,

)
)
)
Plaintiff,
)
)
v.
)
)
CITY OF LINCOLN, NEBRASKA, a )
municipal corporation, and
)
TOM CASADY, JIM PESCHONG, and )
RUSSELL FOSLER, individually )
and in their official
)
capacities as employees of
)
the City of Lincoln and the
)
State of Nebraska,
)
)
Defendants.
)
______________________________)

4:14CV3171

MEMORANDUM AND ORDER

This matter is before the Court on the motion of
defendants, City of Lincoln, Nebraska, a municipal corporation,
Tom Casady, Jim Peschong, and Russell Fosler, individually, and
in their official capacities as employees of the City of Lincoln
(collectively “defendants”) to dismiss (Filing No. 60) the Third
Amended Complaint (Filing No. 57) pursuant to Federal Rule of
Civil Procedure 12(b)(6).
the parties.

The matter has been fully briefed by

See Filing Nos. 62, 66, 69.

After review of the

motion, briefs, and relevant case law, the Court finds as
follows.

BACKGROUND
In this action, plaintiff Shane Harrington and his
business, Kali Records, LLC (herein after referred to as
“plaintiff” singular) allege various constitutional and state law
violations against defendants.

Plaintiff’s claims arise from the

denial of his liquor license.1

Following the filing and amending

of his initial complaint, defendants sought dismissal under
Federal Rule of Civil Procedure 12(b)(6).

Filing No. 15.

Instead of responding to defendants’ motion, plaintiff sought to
amend his complaint a second time.
denied plaintiff’s motion to amend.

Filing No. 17.

The Court

Filing No. 24 at 17.

Following the Court’s order on February 6, 2015, granting in part
and denying in part defendants’ motion to dismiss (Filing No. 15)
in which certain parties and causes of action were removed, the
plaintiff sought again to amend their complaint.

Filing No. 34.

The Court granted plaintiff’s motion to amend on May 13, 2015.
In the Third Amended Complaint,2 plaintiff brings causes of
1
As this is the Court’s second order pertaining to a motion
to dismiss and because the facts giving rise to the causes of
action alleged are essentially the same as previously outlined,
the Court will not again undertake a full recitation of the
facts. For a complete factual background see the Court’s
February 6, 2015, order (Filing No. 24).

2
The parties refer to the complaint at issue in the present
motion as the “Third Amended Complaint.” The Court notes that
because plaintiff’s motion to amend his complaint a second time
was initially denied by the Court in its February 6th order, the
complaint to which the parties refer is technically the second
amended complaint. However, for consistency with the pleadings,
the Court will refer to the complaint at issue here as the “Third
Amended Complaint.”

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action under 42 U.S.C. § 1983 for (1) First Amendment Violations;
(2) Fourteenth Amendment Due Process Violations; (3) Fourteenth
Amendment Equal Protection Violations; (4) Privacy Violations
under the Fourth, Ninth, and Fourteenth Amendments; (5) Negligent
Hiring, Training and Supervision; and lastly (6) a state law
claim for Tortious Interference with Business Relationships.
Defendants again seek dismissal under Federal Rule of Civil
Procedure 12(b)(6).

Defendants argue the complaint ought to be

dismissed against the officers based on qualified immunity, and
ought to be dismissed against the City of Lincoln because the
plaintiff “fails to show that the alleged constitutional
violations were the result of an unconstitutional policy or
custom of the City.”

(Filing No. 62 at 5-6).
MOTION TO DISMISS STANDARD

Determining whether a complaint states a plausible
claim for relief is “a context-specific task” that requires a
court “to draw on its judicial experience and common sense.”
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir.
2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 677-78, 129 S.
Ct. 1937, 173 L. Ed. 2d 868 (2009)).

Federal Rule of Civil

Procedure 8 requires a complaint to present “a short and plain
statement of the claim showing that the pleader is entitled to
relief.”

Fed. R. Civ. P. 8(a)(2).
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“[A] complaint must contain

sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”

Braden, 588 F.3d at 594

(quoting Iqbal, 556 U.S. at 677-78) (citing Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929
(2007)).

“A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.”

Iqbal, 556 U.S. at 678.

When considering a motion to dismiss under Rule
12(b)(6), well-pled allegations are considered to be true and are
viewed in the light most favorable to the plaintiff.
F.3d at 591, 595.

Braden, 588

In viewing the facts in this light, the Court

must determine whether the complaint states any valid claim for
relief.

Jackson Sawmill Co. v. United States, 580 F.2d 302, 306

(8th Cir. 1978).

Recitations of elements of a cause of action

with mere conclusory statements fail to meet Rule 8’s pleading
requirements.

Iqbal, 556 U.S. at 678.

However, plaintiff may

use legal conclusions to provide the framework of a complaint, so
long as factual allegations support those legal conclusions.
at 678-79.

Id.

Thus, a dismissal is likely “only in the unusual case

in which a plaintiff includes allegations which show on the face
of the complaint that there is some insuperable bar to relief.”
Jackson Sawmill, 589 F.2d at 306.
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DISCUSSION
1.

PLAINTIFF’S SECOND AND FIFTH CAUSES OF ACTION
Plaintiff’s Third Amended Complaint asserts six causes

of action, presumably against each of the four defendants.

The

Court concludes that plaintiff’s Second Cause of Action for
Violations of Due Process under the Fourteenth Amendment and
Fifth Cause of Action for Tortious Interference with Business
Relationships should be dismissed as to all defendants under
Federal Rule of Civil Procedure 12(b)(6) as discussed below.
A.

PLAINTIFF’S SECOND CAUSE OF ACTION
Plaintiff’s second cause of action alleges “Fourteenth

Amendment Due Process Violations.”

(Filing No. 57 at 25).

The

Fourteenth Amendment provides that no state shall “deprive any
person of life, liberty, or property without due process of law .
. . .”

U.S. Const. amend. XIV § 1.

Plaintiff argues he was

denied due process based on the lack of a “full and fair” hearing
when he was denied his liquor license, and that the denial itself
was not “reasonable and founded on a rational basis.”
No. 57 at 26).

(Filing

Although a reading of the Third Amended Complaint

would likely lead the Court to conclude that plaintiff’s claim is
one of procedural and not substantive due process, the Court need
not make this determination as the first requirement for either a
substantive or procedural due process claim is the establishment
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of a protected liberty or property interest.
at 25-26.

See Filing No. 57

See also Richardson v. Nebraska State Patrol, No.

8:08CV211, 2008 WL 3823716 at *1 (D. Neb. Aug. 11, 2008) (citing
Singleton v. Cecil, 176 F.3d 419, 424–25, 425 n.7 (8th Cir. 1999)
(en banc)).
“‘To establish a violation of procedural due process, a
plaintiff must show that he has been deprived of a
constitutionally protected life, liberty, or property interest.’”
Mulvenon v. Greenwood, 643 F.3d 653, 657 (8th Cir. 2011) (quoting
Davenport v. Univ. of Ark. Bd. of Trs., 553 F.3d 1110, 1114 (8th
Cir. 2009)); see also Richardson, 2008 WL 3823716 at *1
(explaining “claims regarding the right to either procedural or
substantive due process must begin with identification of a
protected liberty or property interest.”) (emphasis added).
Nothing within the Third Amended Complaint reveals that plaintiff
is claiming a depravation of either life or liberty.

Plaintiff

must therefore show he was deprived of a constitutionally
protected property interest.

When a constitutionally protected

property interest is lacking, a due process violation cannot be
established.

See Mulvenon, 643 F.3d at 657.

Protected property

interests are “‘determined with reference to state law.’”

Brian

v. Westside Community School District, No. 8:05CV484, 2006 WL
2375482 at *6 (D. Neb. Aug. 14, 2006) (quoting Bishop v. Wood,
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426 U.S. 341, 344, 96 S. Ct. 2074, 48 L. Ed. 2d 684 (1976)); see
also Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701,
33 L. Ed. 2d 548 (1972) (“Property interests, of course, 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 rules or
understandings that secure certain benefits and that support
claims of entitlement to those benefits.”).
Turning then to the issue of whether a liquor license
creates a protected property interest under Nebraska state law,
the Nebraska Supreme Court has conclusively held that “a liquor
license is a purely personal privilege, does not constitute
property, and vests no property rights in a licensee.”

Bali

Hai’, Inc. v. Nebraska Liquor Control Commission, 236 N.W.2d 614,
618 (Neb. 1975), see also Neb. Rev. St. § 53-149 (2015).

Thus,

Nebraska law leaves plaintiff without an argument concerning a
property interest in a liquor license.

Because plaintiff cannot

assert a constitutionally protected property interest in a liquor
license, his due process claim, whether procedural or
substantive, will be dismissed.

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B.

PLAINTIFF’S FIFTH CAUSE OF ACTION
Plaintiff’s fifth cause of action alleges tortious

interference with business relationships.
29-31.

See Filing No. 57 at

Under Nebraska law, a claim for tortious interference

with business relationships is established when five elements are
met.

See Huff v. Swartz, 606 N.W.2d 461, 466 (Neb. 2000).

These

elements are: “(1) the existence of a valid business relationship
or expectancy, (2) knowledge by the interferer of the
relationship or expectancy, (3) an unjustified intentional act of
interference on the part of the interferer, (4) proof that the
interference caused the harm sustained, and (5) damage to the
party whose relationship or expectancy was disrupted.”
N.W.2d at 466 (internal citations omitted).

Huff, 606

Based on the

required elements and the facts alleged in the Third Amended
Complaint, the Court finds plaintiff has failed to state a claim
upon which relief can be granted with regard to the fifth cause
of action.

Plaintiff’s tortious interference with business

relationships claim will be dismissed as to all defendants.3

3
This cause of action was dismissed against the City of
Lincoln in the Court’s February 6, 2015, order as violation of
the Nebraska Political Subdivisions Tort Claims Act (Neb. Rev.
Stat. § 13-092). For the complete discussion, see Filing No. 24
at 12-13. See also Malone v. Omaha Housing Authority, No.
4:09CV3208, 2011 WL 1435257 at *3 (D. Neb. April 14, 2011);
Hatcher v. Bellevue Volunteer Fire Dept., 628 N.W.2d 685, 697
(Neb. 2001).

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2.
A.

REMAINING CAUSES OF ACTION

AS TO THE CITY OF LINCOLN, CHIEF CASADAY AND CHIEF PESCHONG
Other than the causes of action dismissed above, the

Court finds that the allegations contained in the Third Amended
Complaint satisfy the procedural requirements to overcome a
motion to dismiss with respect to the City of Lincoln, Chief Tom
Casaday, and Chief Jim Peschong.

Defendants claim qualified

immunity should be applied, relieving the police officers of
liability.

The Court disagrees at this time and finds that

plaintiff’s Third Amended Complaint satisfies Rule 8’s standard
and sufficiently pleads a violation of clearly established
statutory or constitutional rights of which a reasonable person
would have known.

See Mathers v. Wright, 636 F.3d 396, 399 (8th

Cir. 2011) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 102 S.
Ct. 2727, 73 L. Ed. 2d 396 (1982)).

The Court likewise disagrees

with defendants that the Third Amended Complaint “fails to show
that the alleged constitutional violations were the result of an
unconstitutional policy or custom of the city.”
at 5-6).

(Filing No. 62

While the Court agrees that no policy of the City has

been properly pled, plaintiff’s contentions are enough to
overcome the motion to dismiss standard with regards to a custom.
See Board of County Comm’rs of Bryan County, Oklahoma v. Brown,
520 U.S. 397, 404, (1997) (“[A]n act performed pursuant to a
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‘custom’ that has not been formally approved by an appropriate
decisionmaker may fairly subject a municipality to liability on
the theory that the relevant practice is so widespread as to have
the force of law.”) (citing Monell v. Dep’t of Soc. Serv. of New
York, 436 U.S. 668, 690-91 (1978)).

The City of Lincoln, Chief

Casaday, and Chief Peschong’s motion to dismiss causes of action
one (First Amendment Violations), three (Equal Protection
Violations of the Fourteenth Amendment), four (Privacy Violations
of the Fourth, Ninth, and Fourteenth Amendments), and six
(Negligent Hiring, Training, and Supervision) will therefore be
denied at this time.
B.

AS TO OFFICER FOSLER
As indicated above, it is unclear from the face of

plaintiff’s Third Amended Complaint whether every cause of action
alleged applies to every and all named defendants.
Filing No. 57.

See generally

To the extent that the Third Amended Complaint

alleges negligent hiring, training, and supervision against
officer Fosler, the Court finds that such a claim should be
dismissed.

No fact or facts provided in the Third Amended

Complaint provide the Court any basis to believe that officer
Fosler has or had any authority to hire, train, or supervise.
See Tilson v. Forrest City Police Dept., 28 F.3d 802, 806-07, 806

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nn.9-10 (8th Cir. 1994).

Therefore, plaintiff’s sixth cause of

action will be dismissed as to defendant Russell Fosler.
IT IS ORDERED:
1) Defendants’ motion to dismiss plaintiff’s first
cause of action is denied as to all defendants.
2) Defendants’ motion to dismiss plaintiff’s second
cause of action is granted.

Plaintiff’s Fourteenth Amendment Due

Process Violations are dismissed as to all defendants.
3) Defendants’ motion to dismiss plaintiff’s third
cause of action is denied as to all defendants.
4) Defendants’ motion to dismiss plaintiff’s fourth
cause of action is denied as to all defendants.
5) Defendants’ motion to dismiss plaintiff’s fifth
cause of action is granted.

Plaintiff’s allegations of tortious

interference with business relationships are dismissed as to all
defendants.
6) Defendants’ motion to dismiss plaintiff’s sixth
cause of action is denied as to the City of Lincoln, Nebraska,
Chief Tom Casaday, and Chief Jim Peschong and granted as to
Officer Russell Fosler.

Plaintiff’s allegations of negligent

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hiring, training and supervision, are dismissed as to Officer
Fosler.
DATED this 23rd day of September, 2015.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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