815 F.2d 1193 (8th Cir. 1987), 86-1270, McGee v. Hester

Docket Nº:86-1270, 86-1645 and 86-1646.
Citation:815 F.2d 1193
Party Name:Ben McGEE, d/b/a The Liquor Center, Appellee, v. Joe HESTER, Agent-in-Charge, Western District of Tennessee, Tennessee Alcoholic Beverage Commission, Appellant (Two Cases). Ben McGEE, d/b/a The Liquor Center, Appellant, v. Joe HESTER, Agent-in-Charge, Western District of Tennessee, Tennessee Alcoholic Beverage Commission, Appellee.
Case Date:April 06, 1987
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1193

815 F.2d 1193 (8th Cir. 1987)

Ben McGEE, d/b/a The Liquor Center, Appellee,

v.

Joe HESTER, Agent-in-Charge, Western District of Tennessee,

Tennessee Alcoholic Beverage Commission, Appellant

(Two Cases).

Ben McGEE, d/b/a The Liquor Center, Appellant,

v.

Joe HESTER, Agent-in-Charge, Western District of Tennessee,

Tennessee Alcoholic Beverage Commission, Appellee.

Nos. 86-1270, 86-1645 and 86-1646.

United States Court of Appeals, Eighth Circuit

April 6, 1987

Submitted Sept. 12, 1986.

Rehearing and Rehearing En Banc Denied June 18, 1987.

Page 1194

John J. Mulrooney, Memphis, Tenn., for appellant.

Clint Saxton, West Memphis, Ark., for appellee.

Before JOHN R. GIBSON, Circuit Judge, BRIGHT, Senior Circuit Judge, and FAGG, Circuit Judge.

BRIGHT, Senior Circuit Judge.

These appeals bring this litigation before us for a second time. The first appeal is reported at 724 F.2d 89 (8th Cir.1983).

The present controversy consists of three consolidated appeals, all arising from a suit brought by Ben McGee, owner of an Arkansas liquor store, against Joe Hester, Agent-in-Charge, and other members and employees of the Tennessee Alcoholic Beverage Commission ("ABC"). In his original complaint, McGee alleged, inter alia, that Hester and the other defendants deprived him of his property without due process and intentionally interfered with his business. In the first of the three consolidated appeals, Hester contends that the district court erred in denying his motion for a judgment notwithstanding the special verdict, or, alternatively, for a new trial. 1 In a second appeal, Hester contests, as excessive, the district court's award of attorney's fees in the amount of $53,917.50 (fees of $44,750 plus a 15% enhancement, plus costs). In the third appeal, McGee contests the district court's denial of attorney's fees for work performed on his prior appeal to this court.

I. BACKGROUND

In 1979, ABC commenced a crackdown upon the illegal import of untaxed out-of-state liquor into the State of Tennessee. The object of the crackdown was to arrest Tennessee residents importing such liquor into the State. Ben McGee owns and operates The Liquor Center, a retail liquor store located in West Memphis, Arkansas, approximately seven to ten miles from the Tennessee border. As was his right, McGee openly solicited Tennessee customers; placing advertisements in Memphis papers that contained maps and directions to his liquor store. Apparently suspicious that Tennessee residents were purchasing liquor from The Liquor Center in order to evade the Tennessee tax, ABC, under the direction of Joe Hester, placed The Liquor Center under surveillance for four months in 1979. This litigation arose in response the methods used by Hester and the other agents to carry out their surveillance activities.

As already indicated, McGee filed a complaint alleging deprivation of property without due process of law in violation of 42 U.S.C. Sec. 1983, and a pendent state law claim for intentional interference with his business. 2 Specifically, McGee alleged that the ABC agents engaged in intrusive surveillance

Page 1195

tactics for the purpose of forcing him to close down his business. 3

Initially, the district court granted the defendants' motion for summary judgment. The court determined that Hester and the other agents were not liable for violating section 1983 under the doctrine of good faith immunity of public officials set forth in Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). The district court refused to find the agents in violation of Arkansas state law, holding that the surveillance activities were privileged as law enforcement measures in the public interest under Walt Bennett Ford, Inc. v. Pulaski County Special School District, 274 Ark. 208, 624 S.W.2d 426 (1981).

In the first appellate litigation (on McGee's appeal), a panel of this court reversed the grant of summary judgment and remanded the case to the district court. McGee v. Hester, 724 F.2d 89 (8th Cir.1983). 4 The panel held first that McGee was not alleging an "insubstantial claim" properly disposed of on summary judgment under Harlow, 457 U.S. at 818, 102 S.Ct. at 2738, and second, that even "[a]ssuming McGee's presentation of the facts is true, it cannot be said, as a matter of law," that Hester and Gammon "acted with a personal or disinterested motive of a laudable character." McGee, 724 F.2d at 92. The panel concluded that McGee had a right to have a jury determine the merits of his claims. Speaking through Judge Ross, the panel stated,

On remand, the jury should be instructed to determine whether the appellees engaged in conduct that discouraged customers from purchasing liquor at McGee's store and whether the appellees intended such a result to flow from their actions.

* * *

* * *

[W]e find that McGee also has a right to have the jury determine his pendent state tort claim.

Id.

On remand, the district court determined that these factual issues would best be determined by submitting special interrogatories to the jury. The jury answered most of these in McGee's favor, finding the following to be true: (1) Hester told McGee that he was going to put McGee out of business; (2) Hester, in directing the ABC surveillance program, had a personal, conscious intent to harm McGee or McGee's business; (3) Hester intentionally singled out McGee and his business for surveillance activities; (4) in carrying out his surveillance activities, Hester did not believe in good faith that he was not violating McGee's constitutional rights; (5) Hester instructed his agents to employ overt and intrusive surveillance techniques to frighten away legitimate customers from McGee's business; (6) the overt manner in which ABC's surveillance activities were conducted resulting in frightening legitimate customers away from McGee's business; (7) ABC agents visited McGee's business one to three times per week from July 1, 1979, through October 10, 1979; (8) ABC agent Gammon...

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