Baer v. City of Wauwatosa

• Decision Date: 22 August 1983
• Docket Number: No. 83-1087,83-1087
• Citation: 716 F.2d 1117
• Parties: John H. BAER, individually and d/b/a Liberty Guns, Plaintiff-Appellant, v. The CITY OF WAUWATOSA, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1117

716 F.2d 1117

John H. BAER, individually and d/b/a Liberty Guns, Plaintiff-Appellant, v. The CITY OF WAUWATOSA, et al., Defendants-Appellees.

No. 83-1087.

United States Court of Appeals, Seventh Circuit.

Argued May 12, 1983.

Decided Aug. 22, 1983.

John F. Fuchs, Shapiro, Dubin, Balistreri & Fuchs, Milwaukee, Wis., for plaintiff-appellant.

Harold D. Gehrke, City Atty. of City of Wauwatosa, Wauwatosa, Wis., for defendants-appellees.

Before POSNER and COFFEY, Circuit Judges, and GIBSON, Senior Circuit Judge. ^*

POSNER, Circuit Judge.

John Baer brought this civil rights suit under 42 U.S.C. Sec. 1983 against the City of Wauwatosa (Wisconsin), its mayor, and the members of its council, alleging that, by taking away Baer's license to sell guns, the defendants had deprived him of property without due process of law, and denied him the equal protection of the laws, in violation of the Fourteenth Amendment. The district judge entered judgment for the defendants after a bench trial, and Baer appeals.

Section 6.84.020(A) of the Wauwatosa ordinances provides that "no person shall engage in the business of selling any dangerous weapon or gun without obtaining a license as provided in this chapter ...." Section 6.84.030 requires anyone wanting a license to apply in writing to the city clerk. The application must contain the applicant's name and address and the address of the location from which he wants to sell guns. "Upon the receipt of such application, the common council [Wauwatosa's city council] may direct the city clerk to issue such license to the applicant, upon his payment to the city treasurer of an annual license fee of ten dollars." The ordinances do not specify the term of the license, and contain no standards for denying licenses and no provisions relating to revocation or renewal.

The latest of Baer's series of one-year licenses was due to expire on June 30, 1980, when on March 6, 1980, he was convicted of second-degree sexual assault (a felony) for consensual sex acts with a 14-year-old girl. Baer was sentenced to five years probation and fined $1,000. The girl lived near his shop, which had become a hangout for teenagers, and the sex acts had occurred in the shop. On April 23 the city attorney of Wauwatosa notified Baer that the common council's committee on permits and licenses had scheduled a hearing for May 13 to consider what to do about his gun license in light of his conviction. Baer, represented by counsel, testified at the hearing. The committee recommended to the common council that Baer's license be revoked. On May 20 the council held a public hearing, at which Baer, again represented by counsel, testified among other things that he would sell assault guns to "anybody who wants to buy them." He was allowed to cross-examine the girl's mother, and asked her, "Did she say it was lovely?" She replied, "She might have but again she is a child. She is a fourteen year old child who has had her mind twisted." The council cut off the cross-examination at that point.

The council voted unanimously to revoke Baer's license, adopting the committee's conclusion that his "conviction constitutes a violation involving moral turpitude, which substantially relates to the licensee's moral character and it is considered no longer appropriate for the licensee to possess a license for the sale of dangerous weapons." Baer's lawyer, however, told the council that his client would continue to sell guns, without a license, under section 6.84.020(B) of the ordinances. This subsection provides that the license requirement in subsection A "does not apply to rifles or shotguns used for hunting purposes, target-practice weapons, or any sporting-goods item defined as any of those items which further interest in the commonly accepted fields of sports...." Realizing that this was a glaring loophole in the city's regulation of the gun business, the common council promptly repealed subsection B. On June 5, the day the repeal took effect, the police told Baer, "you're out of the gun business." Baer closed the shop and brought this suit.

Baer seeks damages but not return of his gun license; as his counsel acknowledged at oral argument, Baer's conviction made him ineligible for a federal license to sell guns. See 18 U.S.C. Secs. 923(d)(1)(B), 922(g)(1), (h)(1). His acknowledged ineligibility for a federal license makes it rather hard to see how he has been injured in a tort sense even if we assume there would have been a substantial delay before his federal license was actually revoked. A tort injury is an injury to a lawful interest. Cf. Lossman v. Pekarske, 707 F.2d 288, 291 (7th Cir.1983). Baer therefore cannot obtain damages under 42 U.S.C. Sec. 1983--a tort statute, 707 F.2d at 290-91, albeit a constitutional-tort statute--for the loss of his municipal license, when federal law forbids him to sell guns. But as the defendants have not made this argument, we shall not base our decision on it.

Another issue of causation lurks in the case. A plaintiff must prove a causal link between the violation and the injury for which he is seeking damages; and, by itself, the revocation of Baer's license did not cause any injury to him, because (ignoring the question of the federal license) he could and did continue, without a city license, to sell all the guns he wanted to sell, thanks to section 6.84.020(B). This suggests that what hurt Baer was not the revocation of a license that he did not need but the repeal of the part of the ordinance that had made a license unnecessary. However, the suggestion is not entirely accurate. Baer is complaining about the repeal of the ordinance as well as about the revocation of the license; and if he can prove that the repeal was unlawful, he can complain about the revocation as well, for if his license had not been revoked the repeal would not have affected him. The repeal and revocation were the joint causes of his injury. If both were wrongful, the defendants are liable. If only one was wrongful, they are not liable, for in that case the plaintiff would have suffered the same loss even if there had been no wrongdoing, and thus he could not prove a wrongful injury, as he must in order to prevail.

To show that the revocation and repeal together, by taking away Baer's right to sell guns in Wauwatosa, violated the due process clause of the Fourteenth Amendment, Baer must first establish that he was deprived of property, which may for these purposes be defined as what you hold securely as a result of state or federal law. Reed v. Village of Shorewood, 704 F.2d 943, 948 (7th Cir.1983). A license to operate a business is therefore property if it cannot be taken away from the holder before the end of a definite period without proof of misconduct on his part, so that if he keeps out of trouble he knows he can hold on to the license for that period. See id. at 948-49; Golden State Transit Corp. v. City of Los Angeles, 686 F.2d 758, 760-61 (9th Cir.1982); Herz v. Degnan, 648 F.2d 201, 208-09 (3d Cir.1981); Medina v. Rudman, 545 F.2d 244, 250 (1st Cir.1976) (dictum); cf. Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). One may wonder how a rational person could think that a gun license issued by the city clerk of Wauwatosa conferred a secure right to engage in the gun business, even during the term of the license, when the ordinances place no limitations on the revocation of a gun license. Nor is there any suggestion that some other source of law, state or local, would prevent revocation without good cause. (Wis.Stat.1977, Secs. 68.01 et seq., dealing with municipal administrative procedure, establish a right to appeal from, but no substantive requirements for, license revocations.) This lack cannot be got around by pointing out that Baer is complaining not that a piece of paper was taken away from him but that he was forced to shut down his gun shop. Although his inventory of guns and any other tangible assets of his business were property in an uncontroversial sense, Baer was not deprived of them. All he lost was his right to sell guns. That right was conferred by the license, and if Baer had no expectation reasonably grounded in law that he would be able to retain the license for a fixed term during good behavior, he was not deprived of property by the revocation.

There are, however, two objections to this analysis. First, as a result of the loophole in section 6.84.020(B), Baer was not really operating a licensed business. He had a license but did not need it. By repealing section 6.84.020(B) and then refusing to issue Baer a license, the defendants in effect closed down an unlicensed business, and that was a deprivation of property. The state cannot take away your house without a hearing by passing a law that homeowners need a license for their homes and then denying you the license.

Second, that the ordinances allow revocation without cause is only one possible interpretation of their silence. An alternative interpretation is that since they make no reference to revocation the city has no power to revoke a license, at least without cause, during its term (a power to revoke for cause may, as we shall see later, be implicit in the ordinances). If that is true then Reed v. Village of Shorewood and many other cases teach that Baer had a property right that expired on June 30, the expiration date of his license, and the closing of his shop on June 5 deprived him of that right. True, his damages would be limited to the period between June 5 and June 30, since the ordinances do not create an express or implied right to have a gun license renewed and Baer does not make the argument of the plaintiffs in Reed that under state law nonrenewal, at least selective nonrenewal, must be treated as a form of revocation. See 704 F.2d at 949. But even though his damages would be small he would be entitled to them if he could prove he had been denied due process...