Opinion
CIVIL ACTION NO. 01-1666, SECTION "C"
October 2, 2003
ORDER AND REASONS
This matter comes before the Court on motion for summary judgment filed by the defendants Mark H. Morial, Lilliam Z. Regan and The City of New Orleans. Having considered the record, the memoranda of counsel and the law, the Court has determined that the motion should be granted for the following reasons.
The plaintiffs, Green Turtle Landscaping Company d/b/a Turtle Taxi, Douglas Spaulding, Robin Spaulding, Marvin Greenway and Diane Greenway (collectively "Green Turtle") assert procedural and substantive due process claims under 42 U.S.C. § 1983 pertaining to their efforts to gain licensing to conduct a "pedicab" business in New Orleans. Because the Court was unable to ascertain the precise nature of the plaintiffs' claims from the record, it asked for an itemization of claims with factual and legal bases. It appears to the Court from a liberal reading of the statement of claims that the plaintiffs are asserting a total of four claims: a procedural due process claim and a" substantive due process claim pertaining both to a May 2000 withdrawal of permission to continue operations pending licensing and pertaining to the alleged inaction/denial of their application for the proper license.
The statement of claims does not clearly indicate the basis of the claims against each of the three remaining defendants. The Court will assume, for purposes of this motion, that the plaintiffs do have a claim against the individual defendants that can survive a Monell challenge and that enjoy an evidentiary basis.
The Court will consider the substantive due process claim despite the fact that a review of the jury interrogatories submitted to the jury at the first trial indicates that the plaintiffs asserted only a procedural due process claim.
The undisputed facts indicate that the plaintiffs began operation of their business with an occupational license in April 1999. The plaintiffs were cited for violation of the relevant city ordinance in May 1999. After those charges were dismissed, the City Council amended the ordinance in June 1999 to require all "for hire" vehicles in New Orleans to obtain a Certificate of Public Necessity and Convenience ("CPNC"). It is undisputed that regulatory ordinances approved by the Mew Orleans City Council would precede the Department of Utilities' hearings and issuance of any CPNCs to "for hire" vehicles such as pedicabs.
Although the plaintiffs refer in opposition to a conversation in April 1999 wherein their attorney at the time advised them that they would have to give a minority owner a 35% interest in their business in order to operate, no evidence of this conversation was introduced at the first trial, and reference to this conversation is not included in the statement of claims.
After the ordinance was amended, Lilliam Regan ("Regan"), former Director of the Department of Utilities for the City of New Orleans, wrote a letter to the plaintiffs' attorney advising that, "In order to continue to operate, Turtle Taxi must apply for a CPNC in time for the August hearing." Regan further advised:
We realize that your client, in good faith, began operations within the provisions of the law. In the spirit of cooperation, we will permit operations to continue provided that your client immediately begins the application process for the August hearing.
According to the trial testimony of the plaintiff Robin Spaulding, the plaintiffs began the referenced application process, spoke at a August 1999 meeting, attended a September 1999 meeting, wrote letters to City Hall and worked toward ultimately obtaining a CPNC. It is undisputed that the plaintiffs drafted proposed regulatory ordinances for consideration by the City Council and understood that the City Council needed to act before the Department of Utilities could issue a CPNC.
It is also undisputed that there was opposition to the issuance of CPNCs to pedicabs. In April 2000, the Department of Public Works voiced written opposition to the allowance of pedicab operations on public streets. The plaintiffs' business continued to operate until May 31, 2000, when Regan wrote plaintiffs' attorney that "[y]our client was given permission to operate through August of 1999 which has of course passed, an extension cannot be granted at this time." Regan continued:
Prior to the issuance of Certificates of Public Necessity and Convenience (CPNC), the department is required to investigate the impact of these certificates upon the traffic patterns and traffic congestion on our streets. The department is in the process of making such a determination. Your client, as well as all other applicants will be informed of the results.
It is undisputed that at the time Regan withdrew the permission in May 2000, the City Council had not issued regulatory guidelines that would govern the issuance of CPNCs for pedicabs and the Department of Utilities had not ruled on any application.
It is also undisputed that the investigation regarding pedicab operations in New Orleans continued and yielded an August 2000 consultant's study recommending against the operation of pedicabs. Proposed regulatory ordinances were withdrawn and later reintroduced by a councilman in January 2001. The Department of Public Works issued an enhanced report in opposition in April 2001. This suit was filed in May 2001.
The undisputed facts also indicate that, in a deliberate effort not to "make waves," the plaintiffs did not challenge the May 2000 "withdrawal" or the alleged inaction/denial of their applications until they filed this suit. It is undisputed that no official action on plaintiffs' applications has occurred during the pendency of this lawsuit. The first trial before a jury and Judge Beer, ended in mistrial. Judge Beer realotted the case to the undersigned.
Procedural due process promotes fairness in state decisions by requiring the use of appropriate procedures when depriving a person of life, liberty or property. Daniels v. Williams, 474 U.S. 327, 331 (1986); John Corp. v. City of Houston, 214 F.3d 573, 577 (5th Cir. 2000). Substantive due process prevents government oppression by barring certain government action regardless of the procedures used.Daniels/ supra; John Corp., supra.
The plaintiffs refer to an alleged liberty interest but do not otherwise identify same. The Court will assume that any such interest is subsumed in the alleged property interest.
In order to establish either a substantive or a procedural due process claim, the plaintiffs must first establish the denial of a constitutionally protected property right. Bryan v. City of Madision, Miss., 213 F.3d 267, 274 (5th Cir. 2000), cert. Denied, 531 U.S. 1145 (2001). Federal constitutional law determines whether an interest rises to the level of a right protected by the Due Process Clause. Neuwirth v. La. State Bd. of Dentistry, 845 F.2d 853, 557 (5th Cir. 1988). "The Due Process Clause is only implicated when a person has a constitutionally protected interest in life, liberty, or property." Conner v. Lavaca Hospital District, 267 F.3d 426, 437 (5th Cir. 2001). "To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it."Board of Regents v. Roth, 408 U.S. 564, 577 (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.Id. See also Nunez v. Simms, 341 F.3d 385, 388 (5th Cir. 2003).
"Once licenses are issued, . . . their continued possession may become essential in the pursuit of a livelihood. . . . In such cases the licenses are not to be taken away without that procedural due process required by the Fourteenth Amendment."Bell v. Burson, 402 U.S. 535 (1971). At the same time, a state statute providing for the discretionary, grant of a reciprocal dental license was found not to create a liberty or property interest inNeuwirth, suora.
The Court finds as a matter of law that the plaintiffs did not have a protected property interest subject to due process protection. With respect to the permission granted in the May 1999 letter, the language in the letter itself indicates that the permission was "in the spirit of cooperation" and only an interim measure. The fact that there appears to be no source of state law allowing Regan to grant such permission is also problematic. The Court finds that the undisputed facts indicate that plaintiffs nonetheless understood the temporary nature of the permission. After receiving the letter, the plaintiffs attended two meetings and spoke at one, and otherwise took action to obtain the necessary CPNC. They understood that City Council action was necessary before a CPNC could be issued by the Department of Utilities.
The plaintiffs do not allege that the defendants were prohibited from amending the ordinance or applying the amendment to their pre-existing business. Clearly the defendants had the authority to regulate the plaintiff's business in light of its public purpose and the attendant safety and traffic considerations.
Finally, with regard to the alleged inaction/denial of a CPNC, there is nothing in the record that supports the finding that the plaintiffs had the requisite property interest in a CPNC for due process purposes. Rather, the plaintiffs were actively pursuing that license at all relevant times. Again, it was understood by all parties that no such license was available without City Council action, action which has yet to come.
Procedural due process
Assuming that the plaintiffs had constitutionally protected property rights, the Court finds that the plaintiffs' claims based on procedural due process fail for two reasons. First, the undisputed facts indicate that the plaintiffs did have a meaningful opportunity to be heard prior to the May 2000 letter withdrawing permission. Again, the plaintiffs communicated with the Department of Utilities, attended meetings, petitioned City Hall and proposed regulatory ordinances to the City Council before the May 2000 withdrawal of permission. The plaintiffs continued to meet strong opposition before effectively abandoning the efforts and filing suit.
Secondly, even if the plaintiffs were not given a meaningful opportunity to be heard prior to either the May 2000 withdrawal or alleged CPNC inaction/denial, it is undisputed that the plaintiffs did not exhaust state legal remedies as to either the withdrawal of permission or the lack of action/denial of the CPNC before filing suit. Under Parratt v. Taylor, 451 U.S. 527 (1981), random and unauthorized deprivations of plaintiff's property will not violate procedural due process if the state provides adequate post-deprivation remedies. The application of the doctrine ofParratt presents a question of law for the Court to determine.Cozzo v. Parish of Tangipahoa, 279 F.3d 273, 290 (5th Cir. 2002). It is undisputed that the plaintiffs intentionally chose not to pursue state court remedies pertaining to the May 2000 action, and the Court would find that this procedural due process claim is not properly before it as the result of the plaintiffs' decision. With regard to the alleged inaction/denial of the CPNC, "The constitutional right to due process is not, however, an abstract right to hearings conducted according to fair procedural rules. Rather, it is the right not to bedeprived of life, liberty, or property without such procedural protections." Monk v. Huston, 340 F.3d 279, 282-283 (5th Cir. 2003). Even assuming that the procedural due process claim pertaining to the CPNC applications is ripe for adjudication, the record is void of any effort to seek post-deprivation state remedies and is otherwise replete with evidence that a meaningful pre-deprivation opportunity to be heard was provided.
Substantive due process
Whether a governmental action is rationally related to protecting the health and safety of citizens for substantive due process purposes is a question of law for the Court to decide. Hidden Oaks Ltd, v. City of Austin, 138 F.3d 1036, 1044 (5th Cir. 1998); FM Properties Operating Co. v. City of Austin, 93 F.3d 167, 172-173 (5th Cir. 1996). This Court's review of the defendants' actions is measured against a deferential rational basis test. Simi Investment Co., Inc. v. Harris County, Tex., 236 F.3d 240, 249 (5th Cir. 1998). "Substantive due process analysis is appropriate only in cases in which government arbitrarily abuses its power to deprive individuals of constitutionally protected rights." Id. The issue is only whether a rational relationship exists between the actions of the defendants and a conceivable legitimate objective. "If the question is at least debatable, there is no substantive due process violation." Simi, 236 F.3d at 251. The Court finds, as a matter of law, that such a rational basis exists as to both the May 2000 withdrawal of permission and as to any alleged inaction/denial of the plaintiffs' applications for a CPNC. Indeed, had the City Council and the defendants refused to issue a CPNC based on the record before it, such action would not constitute egregious or arbitrary government conduct for
substantive due process purposes. See City of Cuyahoga Falls, Ohio v. Buckeye Community Hope Foundation, ___ U.S. ___, 123 S.Ct. 1389 (2003).
In fact the trial evidence indicated that the plaintiffs suffered health problems attendant to the operations of the pedicabs and experienced some traffic-related problems.
Accordingly,
IT IS ORDERED that the motion for summary judgment filed by the defendants Mark H. Morial, Lilliam Z. Regan and The City of New Orleans is GRANTED.
The record reflects that the Department of Utilities for the City of New Orleans, which did not join in this motion, remains as a defendant. Therefore, judgment is premature.