Hanna et al v. Avila

Filing 10

MEMORANDUM AND ORDER: Upon consideration of Defendant's Motion 6 for judgment on the pleadings, Judgment on the pleadings is granted in favor of Defendant and against Plaintiffs on Count I, the procedural due process claim; Count II, the subst antive due process claim; and Count III, the equal protection claim. Plaintiffs are granted twenty-one (21) days from the date of this order to file an amended complaint setting forth their equal protection claim with sufficient factual allegations. 3. If no amended complaint is filed, the court shall consider whether the state-law claims should proceed. Signed by Honorable William W. Caldwell on 5/30/12. (pw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
RICHARD M. HANNA and
HANNA, INC.,
Plaintiffs
v.
ELI N. AVILA, M.D.,
Defendant

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: CIVIL NO. 1:12-CV-256
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MEMORANDUM

I.

Introduction
Plaintiffs, Richard M. Hanna, and Hanna, Inc., filed this civil-rights action

against defendant, Eli N. Avila, M.D., the Secretary of Health of the Commonwealth of
Pennsylvania. Plaintiffs allege that Defendant had developed personal animosity against
Richard M. Hanna and decided to interfere with Plaintiffs’ bid to operate the cafeteria in
the Capitol Building, making the bid unsuccessful. Plaintiffs make three federal claims:
(1) a procedural due process claim; (2) a substantive due process claim; and (3) an
equal protection claim. Plaintiffs make two state-law claims: (1) intentional interference
with prospective business relations; and (2) defamation.
We are considering Defendant’s motion for judgment on the pleadings
under Fed. R. Civ. P. 12(c). Since the motion argues that the complaint fails to state a
claim, we review it under the standard used for motions to dismiss under Fed. R. Civ. P.
12(b)(6). See Turbe v. Gov’t of Virgin Islands, 938 F.2d 427, 428 (3d Cir. 1991);

Bangura v. City of Philadelphia, 338 F. App’x 261, 264 (3d Cir. 2009) (nonprecedential)
(citing Turbe).
In considering a motion to dismiss under Rule 12(b)(6), “[w]e ‘accept all
factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the
plaintiff may be entitled to relief.’” Byers v. Intuit, Inc., 600 F.3d 286, 291 (3d Cir. 2010)
(quoted case omitted).
A complaint has to plead “enough facts to state a claim to relief that is
plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955,
1974, 167 L.Ed.2d 929 (2007). Detailed factual allegations are not required, id. at 555,
127 S.Ct. at 1964; Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548, 564 (3d Cir.
2002), only a “short and plain statement” showing the right to relief. Pryor, supra, 288
F.3d at 564 (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 152
L.Ed.2d 1 (2002) and quoting Fed. R. Civ. P. 8(a)(2)). “The plausibility standard is not
akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949,
173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. at 1965). “[M]ore
than labels and conclusions” are required. Twombly, 550 U.S. at 555, 127 S.Ct. at
1964–65.
With this standard in mind, we set forth the background of this litigation, as
Plaintiffs allege it.

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III.

Background
Plaintiffs allege as follows. In January or early February 2011, Defendant

entered Plaintiffs’ restaurant and ordered an egg sandwich, “indicating he was in a
hurry.” (Compl. ¶¶ 6-7). “Plaintiff happened to be frying eggs for himself and placed
those eggs into a sandwich” served to Defendant. (Id. ¶ 8). Defendant then falsely
accused Plaintiff of serving stale eggs, (id. ¶ 9), leading to “a heated discussion” in which
Defendant accused Plaintiff “of serving bad food,” and then said to Plaintiff “in a
threatening tone ‘You don’t know who I am’ before leaving the restaurant.” (Id. ¶ 10).
Thereafter, Defendant “undertook a personal vendetta against Plaintiff” by
“making a false complaint of “health violations” to the City of Harrisburg. (Id. ¶ 11). The
City’s health inspectors found only “one minor violation that had nothing to do with food
services.” (Id. ¶ 12).
In February 2011, Plaintiffs submitted a proposal to the Pennsylvania
Department of General Services (DGS) for a contract to provide food service in the
Capitol cafeteria. (Id. ¶ 14). “Upon learning of Plaintiff’s proposal, Defendant
intentionally, willfully, and maliciously sent the following e-mail message to the decision
maker in the Department of General Services: ‘It is my professional opinion that they
(Plaintiffs) should not have any nexus to food services with the Capitol. I will elaborate if
you want to talk to me about the matter.’” (Id. ¶ 18). Plaintiffs allege “[t]he plain meaning
of the words uttered by Defendant were intended to defame and harm Plaintiffs.” (Id. ¶
19). Further, “the words were understood in a defamatory manner, disparaging Plaintiffs’
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ability to operate the food service business in the Capitol.” (Id. ¶ 20). “Defendant
inserted himself with the weight of his office into a procedure in which he would not
normally have participated, but for his personal vendetta against Plaintiffs.” (Id. ¶ 49).
“Defendant used the authority of his office to execute his personal vendetta
and influence Commonwealth employees to deny the food service contract to Plaintiffs,”
(id. ¶ 21), which was awarded to another applicant. (Id. ¶ 22). The e-mail “was
instrumental in Plaintiff’s loss of the business opportunity.” (Id. ¶ 23).
Count I of the complaint presents a procedural due process claim.
Plaintiffs identify the following property interest that was allegedly infringed: “the ability to
enjoy, use and pursue [Richard M. Hanna’s] business as a provider of food and food
service in the Capitol Building.” (Id. ¶ 29). Plaintiffs identify the following liberty interests
that were allegedly infringed: “reputation and ability to pursue business opportunities.”
(Id. ¶ 32). Plaintiffs further allege they were “deprived of a prospective business
opportunity, awarding of the Capitol food service contract and suffered a potential loss of
profits in the amount of $500,000.” (Id. ¶ 38).
Count II presents a substantive due process claim. In this claim, Plaintiffs
allege Defendant’s conduct infringed on the liberty interests in “operat[ing] a business
and follow[ing] a chosen occupation free from arbitrary abusive governmental
interference.” (Id. ¶ 44). Plaintiffs also allege that pursuing business opportunities is a
fundamental right. (Id. ¶ 45).

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Count III presents an equal protection claim. Plaintiffs allege that because
of Defendant’s conduct, they were “singled out and intentionally treated differently in the
food service application process from other applicants.” (Id. ¶ 57). There was “no
rational basis” for doing so. (Id. ¶ 58).
As noted, Plaintiffs also present two state-law claims: (1) intentional
interference with prospective business relations; and (2) defamation.

IV.

Discussion

A. Procedural Due Process Claim
To state a claim for deprivation of procedural due process, “a plaintiff must
allege that (1) he was deprived of an individual interest that is encompassed within the
Fourteenth Amendment's protection of ‘life, liberty, or property,’ and (2) the procedures
available to him did not provide ‘due process of law.’” Hill v. Borough of Kutztown, 455
F.3d 225, 234 (3d Cir. 2006). Defendants move to dismiss the procedural due process
claim by pointing out that the deprivation Plaintiffs allege, losing a bid for a state contract,
is not recognized as a property interest, and Plaintiffs have alleged no other valid
interest.
We agree. See Independent Enterprises Inc. v. Pittsburgh Water & Sewer
Auth., 103 F.3d 1165, 1178 (3d Cir. 1997) (no property interest in an unsuccessful bid on
a public contract); Municipal Revenue Services, Inc. v. McBlain, 347 F. App’x 817, 826
(3d Cir. 2009) (nonprecedential) (“It is, however, quite clear that the possibility of a future

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contract with a municipality is not a property interest that warrants procedural due
process protection.”). The other description of a property interest, “the ability to enjoy,
use and pursue his business as a provider of food and food service in the Capitol
Building,” is simply another way of saying Plaintiffs had a property interest in bidding on
the contract.
The liberty interest Plaintiffs claim, “reputation and ability to pursue
business opportunities” appears to be an attempt to assert a stigma-plus procedural due
process claim.1 In a stigma-plus claim, “a plaintiff must show a stigma to his reputation
plus deprivation of some additional right or interest.” Dee v. Borough of Dunmore, 549
F.3d 225, 233-34 (3d Cir. 2008) (quoting Hill, supra, 455 F.3d at 236 (emphasis in Hill)).
We agree with Defendant that Plaintiffs have not alleged the deprivation of an additional
right or interest sufficient to set forth a stigma-plus claim. The only deprivation Plaintiffs
have alleged here is the lost contract for the Capitol cafeteria, but the loss of a business
opportunity is not some additional right or interest covered by a stigma-plus claim. Sturm
v. Clark, 835 F.2d 1009, 1012-13 (3d Cir. 1987) (financial loss resulting from inmates not
employing the plaintiff lawyer not an additional right or interest for a stigma-plus claim);

1

Reputation alone is not a protected interest under procedural due process. Dee v.
Borough of Dunmore, 549 F.3d 225, 233 (3d Cir. 2008).

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Municipal Revenue Services, supra, 347 F. App’x at 826 (loss of a public contract on an
unsuccessful bid not a sufficient interest).2
Finally, we note that in their opposition brief, Plaintiffs assert a liberty
interest in the state bidding procedures themselves, which they assert Defendant
obstructed by his alleged interference in the bidding process. We reject this argument
because there is no property right in a particular state process. Independent Enterprises
Inc., supra, 103 F.3d at 1178 n.10; Campbell v. West Pittston Borough, No. 06-CV-0387,
2008 WL 417692, at *3-4 (M.D. Pa. Feb. 13, 2008); Tennyson v. Rohrbacher, No. 11-35,
2012 WL 366539, at *4 (W.D. Pa. Jan. 25, 2012).
We will therefore dismiss Count I, the procedural due process claim.

B. Substantive Due Process Claim
Substantive due process protects fundamental constitutional rights.
Nicholas v. Pennsylvania State Univ., 227 F.3d 133, 142 (3d Cir. 2000). Plaintiffs argue
they have fundamental constitutional rights in operating a business and following a
chosen occupation free from arbitrary abusive governmental interference. They also
allege that pursuing business opportunities is a fundamental right.
Defendant points out, and Plaintiffs do not contest, that substantive due
process does not protect an interest created by state law in the award of a contract to the

2

Plaintiffs cite Kelly v. Borough of Sayreville, 107 F.3d 1073 (3d Cir. 1997), for the
proposition that “deprivation of future employment” is a sufficient interest. (Doc. 8, Opp’n Br.
at p. 7). Actually, Kelly said the opposite, that the “‘possible loss of future employment
opportunities’” is not a sufficient interest. Id. at 1078 (quoted case omitted).

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lowest responsible bidder, Independent Enterprises Inc., supra, 103 F.3d at 1180.
Plaintiffs rest their substantive due process claim on something else, fundamental liberty
interests in pursuing an occupation, seeking financial gain, and pursuing business
opportunities.
Plaintiffs have a substantive due process right to pursue an occupation.
Rittenhouse Entm’t, Inc. v. City of Wilks-Barre,

F. Supp. 2d

,

, 2012 WL

928488, at *12 (M.D. Pa. 2012); Schultz v. Hughesville Borough, No. 10-CV-262, 2011
WL 3273076, at *15 (M.D. Pa. July 29, 2011)(citing Piecknick v. Pennsylvania, 36 F.3d
1250, 1259 (3d Cir. 1994)). But this right is not infringed unless there is “a complete
revocation or a substantial interference with one’s chosen occupation.” Schultz, 2011
WL 3273076, at *15 (citing Piecknick, 36 F.3d at 1261-62). Thus this right was not
violated here when Plaintiffs simply lost a bid on a particular contract.
As for the alleged liberty interests in seeking financial gain and pursuing
business opportunities, these interests are just a different way of asserting an interest in
being awarded the cafeteria contract and equally unavailing to Plaintiffs. See Holt Cargo
Sys., Inc. v. Delaware River Port Auth., 20 F. Supp. 2d 803, 831 (E.D Pa. 1998)(no
fundamental property interests in obtaining optimal results from a business or in pursuing
business opportunities), aff’d, 165 F.3d 242 (3d Cir. 1999).
We will therefore dismiss the substantive due process claim.

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C. The Equal Protection Claim
Defendant moves to dismiss the equal protection claim because the
complaint fails to allege sufficient facts to establish the claim.3 Specifically, Defendant
argues that there are no facts alleged showing that his e-mail played any role in the DGS
contract decision, how he affected that decision, or in what way Plaintiffs were treated
differently than the other bidders.
We agree with Defendant that the equal protection claim fails to allege
sufficient facts. As noted above, conclusional factual assertions are not enough. Here
Plaintiffs merely allege in conclusory fashion that Defendant “influence[d]”
Commonwealth employees to deny them the food service contract, that the e-mail “was
instrumental” in Plaintiff’s unsuccessful bid, and that Plaintiffs were “singled out and
intentionally treated differently in the food service application process from other
applicants,” with “no rational basis” for doing so.
Since Plaintiffs have failed to allege sufficient facts to support the claim, the
equal protection claim will be dismissed.

D. Leave to Amend
We must grant leave to amend a civil-rights claim even if a plaintiff does not
request it and even if he is represented by counsel. Fletcher-Harlee Corp. v. Pote
Concrete Contractors, Inc., 482 F.3d 247, 251 (3d Cir. 2007). We do not have to do so,

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The claim is a “class of one” equal protection claim. See Phillips v. County of
Allegheny, 515 F.3d 224, 243 (3d Cir. 2008).

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however, if amendment would be futile. Id. In the instant case, we conclude that
allowing amendment of the procedural and substantive due process claims would be
futile because amendment would not cure Plaintiffs’ inability to plead valid property or
liberty interests necessary for the pursuit of those claims. However, Plaintiffs may be
able to plead sufficient facts in an amended complaint to overcome the deficient
conclusory fact pleading in their equal protection claim.
We will thus grant leave to file an amended complaint to set forth the equal
protection claim with sufficient factual allegations. At that time, we will also decide what
to do with Plaintiffs’ state-law claims, including consideration of Defendant’s argument
that they are barred by sovereign immunity.
We will issue an appropriate order.

/s/ William W. Caldwell
William W. Caldwell
United States District Judge

May 30, 2012

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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
RICHARD M. HANNA and
HANNA, INC.,
Plaintiffs
v.
ELI N. AVILA, M.D.,
Defendant

:
:
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: CIVIL NO. 1:12-CV-256
:
:
:
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ORDER
AND NOW, this 30th day of May, 2012, upon consideration of Defendant’s
motion (Doc. 6) for judgment on the pleadings, it is ordered that:
1. Judgment on the pleadings is granted in favor of
Defendant and against Plaintiffs on Count I, the procedural
due process claim; Count II, the substantive due process
claim; and Count III, the equal protection claim.
2. Plaintiffs are granted twenty-one (21) days from the date
of this order to file an amended complaint setting forth their
equal protection claim with sufficient factual allegations.
3. If no amended complaint is filed, the court shall consider
whether the state-law claims should proceed.

/s/ William W. Caldwell
William W. Caldwell
United States District Judge