656 F.3d 1210 (10th Cir. 2011), 10-3002, Kansas Penn Gaming, LLC v. Collins

Docket Nº:10-3002.
Citation:656 F.3d 1210
Opinion Judge:TYMKOVICH, Circuit Judge.
Party Name:KANSAS PENN GAMING, LLC, Plaintiff-Appellant, v. Pat COLLINS, Jack Garner, Richard Hildebrand, Carl Hayes, and Board of County Commissioners of the County of Cherokee, Kansas, Defendants-Appellees.
Attorney:Christopher Tayback, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA (William D. Beil, Daniel B. Hodes, and Jeremy M. Suhr, Rouse Hendricks German May PC, Kansas City, MO, with him on the briefs), for Appellant. Toby Crouse (Wendell F. Cowan, Samuel P. Logan, and James D. Oliver with him ...
Judge Panel:Before TYMKOVICH, McKAY, and GORSUCH, Circuit Judges.
Case Date:September 01, 2011
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

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656 F.3d 1210 (10th Cir. 2011)

KANSAS PENN GAMING, LLC, Plaintiff-Appellant,

v.

Pat COLLINS, Jack Garner, Richard Hildebrand, Carl Hayes, and Board of County Commissioners of the County of Cherokee, Kansas, Defendants-Appellees.

No. 10-3002.

United States Court of Appeals, Tenth Circuit.

September 1, 2011

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[Copyrighted Material Omitted]

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Christopher Tayback, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA (William D. Beil, Daniel B. Hodes, and Jeremy M. Suhr, Rouse Hendricks German May PC, Kansas City, MO, with him on the briefs), for Appellant.

Toby Crouse (Wendell F. Cowan, Samuel P. Logan, and James D. Oliver with him on the brief), Foulston Siefkin LLP, Overland Park, KS, for Appellees.

Before TYMKOVICH, McKAY, and GORSUCH, Circuit Judges.

TYMKOVICH, Circuit Judge.

This case requires us to consider a class-of-one equal protection lawsuit against a county government based on its demand that a property owner correct a nuisance. Kansas Penn alleges that after it and Cherokee County became involved in litigation concerning a casino development agreement, the County health department targeted Kansas Penn for a regulatory enforcement action. In particular, the County sent Kansas Penn a notice stating that the unkempt condition of its property violated state and local nuisance laws and regulations, and warning that failure to clean up the property would lead to an enforcement action.

Although the County never brought an enforcement action against Kansas Penn, Kansas Penn sued the County and some of its officials under 42 U.S.C. § 1983. In its complaint, Kansas Penn alleged the notice of nuisance violated its right to equal protection by arbitrarily and maliciously singling it out for selective enforcement.

Because we agree with the district court that Kansas Penn has failed to state a

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claim for relief under the standard set forth by Bell A. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), we AFFIRM the dismissal of the complaint.

I. Background

Kansas Penn acquired property in Cherokee County, Kansas with the aim of developing a casino on the site. It applied for the necessary licenses to become a Lottery Gaming Facility Manager of the planned casino under the Kansas Expanded Lottery Act, KAN. STAT. ANN. § 74-8733, et seq. It also entered into a pre-development agreement with the Cherokee County Board of County Commissioners, which apparently included a number of provisions regulating the ultimate casino project.

A year later, Kansas Penn withdrew its Facility Manager application. Cherokee County filed suit in Kansas state court, alleging Kansas Penn had breached the pre-development agreement. The court granted the County's request for an Order of Attachment securing a $25 million bidder's fee that Kansas Penn had deposited in connection with its application. That litigation is still pending.

After Kansas Penn withdrew its application, Cherokee County extended the deadline for Facility Manager applications, but no additional applications were filed. The day after the application deadline passed, Carl Hayes, an enforcement official in the Environmental Section of the Cherokee County Health Department (CCHD), sent a notice letter to Kansas Penn regarding its property. The notice stated Kansas Penn's property appeared " abandoned" and claimed an " onsite investigation" revealed " [s]ix structures in various stages of deterioration; " the remains of " a concrete house foundation; " " solid debris and waste," including " tires, barrels, appliances, concrete," and other items; and " evidence that an indeterminate amount of waste material [had been] disposed of by burning." Aplt.App. at A17 (CCHD notice). The notice went on to assert these conditions were " visually offensive" and violated five Kansas statutes and a Cherokee County resolution relating to nuisances and abandoned property. Id. It directed Kansas Penn to bring the property into compliance within 45 days and to submit documentation regarding the disposal of debris. The notice warned that failure to do so would result in prosecution by the Cherokee County Attorney.

Kansas Penn investigated the allegations in the notice by sending agents to inspect the property. Kansas Penn claims its investigation revealed " no evidence of burning," and, in its opinion, the property's condition did not " amount to a public nuisance or otherwise violate applicable environmental regulations." Id. at A11-12 (Compl.¶ 22). Kansas Penn also alleges other, unnamed Cherokee County properties were in conditions similar to, and in some cases worse than, those on its property.

Seeking more information, Kansas Penn made a document request to the County and CCHD under the Kansas Open Records Act (KORA) regarding the County's enforcement activities. Kansas Penn asserts the County's response showed that: (1) Cherokee County did not receive any citizen's complaint regarding the conditions of Kansas Penn's property; (2) there was no written record of an " onsite investigation" of Kansas Penn's property; (3) since January 2006, the CCHD had sent no other notices to landowners alleging violations of environmental regulations; and (4) no such notices were ever sent to the prior owners of the Kansas Penn property, though it was in the same condition at the

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time Kansas Penn acquired it. Aplt.App. at A9-14 (Compl.¶ ¶ 11, 24-30).

Kansas Penn brought this suit in federal court, claiming defendants violated its right to equal protection by treating it differently than other, similarly situated property owners in Cherokee County, without a rational basis for doing so. Kansas Penn asserts defendants sent the CCHD notice in retaliation for its withdrawal of the Facility Manager application and the legal positions it has taken in the breach of contract lawsuit.

In response to defendants' motion, the district court dismissed Kansas Penn's complaint for failure to state a claim. Kansas Penn appeals that disposition here.

II. Discussion

A. Standard of Review for a Motion to Dismiss

We review de novo the dismissal of a complaint for failure to state a claim. Teigen v. Renfrow, 511 F.3d 1072, 1078 (10th Cir.2007).

The Supreme Court recently clarified the standard for granting a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) in Bell A. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Prior to these cases, courts followed the axiom that dismissal is only appropriate where " it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Observing that this language " has been questioned, criticized, and explained away long enough," the Court concluded the Conley formulation " has earned its retirement." Twombly, 550 U.S. at 562, 563, 127 S.Ct. 1955.

In its place, the Court articulated a new, further refined standard: to withstand a motion to dismiss, a complaint must have enough allegations of fact, taken as true, " to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. The Court has explained that two working principles underlie this standard. First, " the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Iqbal, 129 S.Ct. at 1949. Thus, mere " labels and conclusions," and " a formulaic recitation of the elements of a cause of action" will not suffice; a plaintiff must offer specific factual allegations to support each claim. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. And second, " only a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 129 S.Ct. at 1950. In other words, a plaintiff must offer sufficient factual allegations to " raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. " Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S.Ct. at 1950, 129 S.Ct. 1937. Thus, in ruling on a motion to dismiss, a court should disregard all conclusory statements of law and consider whether the remaining specific factual allegations, if assumed to be true, plausibly suggest the defendant is liable.

For example, in Twombly, the Supreme Court found the plaintiffs' allegation of parallel conduct between two companies did not plausibly suggest a conspiracy in restraint of trade, because this behavior was as likely to have been the result of legal, unilateral action as the product of illicit collusion. 550 U.S. at 566, 127 S.Ct. 1955 (" [T]here is no reason to infer that the companies had agreed among themselves to do what was only natural anyway." ). Since the plaintiffs failed to make specific factual allegations plausibly suggesting

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an agreement between the two companies, the complaint failed to state an antitrust claim.

Similarly, in Iqbal, the allegation that the FBI disproportionately detained Arab Muslim men as part of its investigation of the events of September 11, 2001 was " consistent with" the claim of invidious discrimination. Iqbal, 129 S.Ct. at 1951. But the allegation did not " plausibly establish" a wrongful purpose, as the disparate impact could equally be explained by a legitimate policy of seeking out individuals with a connection to the known perpetrators, who belonged to an Islamic fundamentalist group. Id.

This pleading requirement serves two purposes: " to ensure that a defendant is placed on notice of his or her alleged misconduct sufficient to prepare an appropriate...

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