Bellino Fireworks, Inc. v. City of Ankeny, 4:17-cv-00212-RGE-CFB

• Decision Date: 19 July 2018
• Docket Number: No. 4:17-cv-00212-RGE-CFB,4:17-cv-00212-RGE-CFB
• Citation: 332 F.Supp.3d 1071
• Parties: BELLINO FIREWORKS, INC., Plaintiff, v. CITY OF ANKENY, IOWA, City of Boone, Iowa, City of Johnston, Iowa, and City of Pleasant Hill, Iowa, Defendants.
• Court: U.S. District Court — Southern District of Iowa

332 F.Supp.3d 1071

BELLINO FIREWORKS, INC., Plaintiff,

v.CITY OF ANKENY, IOWA, City of Boone, Iowa, City of Johnston, Iowa, and City of Pleasant Hill, Iowa, Defendants.

No. 4:17-cv-00212-RGE-CFB

United States District Court, S.D. Iowa, Central Division.

Signed July 19, 2018

Timothy J. Hill, David Michael Caves, Bradley & Riley, Cedar Rapids, IA, Paul David Burns, Bradley & Riley PC, Iowa City, IA, for Plaintiff.

Hugh J. Cain, Brent L. Hinders, Eric M. Updegraff, Hopkins & Huebner PC, Janice M. Thomas, Stephanie Anne Koltookian, Timothy N. Lillwitz, Bradshaw Fowler Proctor & Fairgrave, P.C., Des Moines, IA, for Defendants.

ORDER RE: DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT, PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT, AND DEFENDANTS' MOTION TO CONTINUE OR BIFURCATE TRIAL

Rebecca Goodgame Ebinger, United States District Judge

I. INTRODUCTION

In May 2017, Iowa enacted legislation permitting the sale and use of consumer fireworks for two designated periods each year. Shortly thereafter, several Iowa cities enacted various ordinances regulating firework sales. A Nebraska corporation in the business of selling fireworks, Bellino Fireworks, Inc., brings this lawsuit against four cities requesting declaratory judgments that their ordinances are preempted by Iowa law, alleging the ordinances violate 42 U.S.C. § 1983, and contending the cities interfered with Bellino's contracts and prospective business relationships.

The City of Ankeny, the City of Boone, the City of Johnston, and the City of Pleasant Hill¹ ask the Court to grant summary judgment in their favor. Ankeny & Pleasant Hill's Mot. Summ. J., ECF No. 54; Boone & Johnston's Mot. Summ. J., ECF No. 57. They assert Bellino's claims fail because their ordinances are not preempted and Bellino does not demonstrate any material disputes as to the necessary elements of its § 1983 and tortious interference claims. Bellino requests partial summary judgment in its favor, contending the Cities' regulations are preempted by state law and the Court should find in its favor on the declaratory judgment counts. ECF No. 56. The Cities also request the Court either continue the trial or bifurcate the trial on the declaratory judgment action from the trial on damages. ECF Nos. 85 & 87.

As further explained below, the Court grants the Cities' motions for summary judgment, and denies Bellino's Motion for Partial Summary Judgment and the Cities' Motion to Continue or Bifurcate. The Cities' Ordinances are not preempted and summary judgment in the Cities' favor as to the declaratory judgment counts is thus appropriate. Bellino lacks standing to challenge the miscellaneous portions of the Cities' codes because it has not alleged it was injured by these provisions and fails to present an actual controversy. There are no genuine issues of material fact as to whether the Cities committed any substantive due process violations. Additionally, summary judgment in the Cities' favor on the tortious inference with contract and tortious interference with prospective business relationship claims is appropriate because the Cities' interference was not improper and, alternatively, the Cities are entitled to immunity under the discretionary function exception. Because the Court rules in the Cities' favor as to all claims, it does not consider the arguments regarding punitive damages and finds the Cities' motions to continue or bifurcate the trial are moot.

II. SUMMARY OF RELEVANT FACTS

The Court set forth the relevant facts in its Order granting in part and denying in part Bellino's Motion for a Preliminary Injunction. ECF No. 23 at 2-5. Since that time, the Cities' Ordinances have been amended, the Senate File has been codified, and Bellino has amended its complaint. Accordingly, the Court recites the relevant facts at this juncture. In large part, the parties agree there are no material facts in dispute.

On May 9, 2017, the Governor of Iowa signed into law Senate File 489 (SF 489), amending the Iowa Code to allow for the possession, sale, transfer, purchase, and use of consumer fireworks in the State of Iowa. 2017 Iowa Legis. Serv. Ch. 115 (S.F. 489) (West) (codified at Iowa Code §§ 100.1(4), 100.1(8), 100.19, 100.19A, 101A.1, 331.301(17), 331.304(8), 364.2(6), 461A.42(2), & 727.2 ); Bellino's App. Supp. Bellino's Mot. Partial Summ. J., at App. 1-12, ECF No. 56-3. The law regulates the sale and use of consumer fireworks, such as licensing procedures for wholesalers and retailers, limitations on the dates fireworks may be sold and used, and penalties. All consumer firework retailers are required to possess a license issued by the state fire marshal. SF 489 § 3 (codified at Iowa Code § 100.19 ).² Licensing criteria include adherence to national firework-safety standards, possession of specified amounts of insurance, and restrictions on sale times. Id.

Sales are permitted only during two specific time periods-June 1 to July 8, and December 10 to January 3. Id. (codified at Iowa Code § 100.19(4)(c) ). The same time and date restrictions apply to the public's use of fireworks. Id. § 10 (codified at Iowa Code § 727.2(4) ). In addition, there are penalties for selling fireworks to a person under eighteen years of age or using fireworks in contravention of an order by the state fire marshal. Id. (codified at Iowa Code § 727.2(3) ); see also Iowa Admin. Code r. 661-265.10.

On May 26, 2017, and as directed by the legislature in SF 489, the state fire marshal adopted emergency rules to regulate fireworks in Iowa. ECF No. 56-3 at App. 18-35 (the Emergency Rules); see also Iowa Admin. Code r. 661-265.1 - .51 (titled Consumer Fireworks Sales, Licensing, and Safety Standards). The Emergency Rules became effective on May 31, 2017. ECF No. 56-3 at App. 19. Effective February 21, 2018, the Emergency Rules became permanent. Iowa Admin. Code r. 661-265.1 - .51 ; see also Bellino's Surreply Supp. Mot. Partial Summ. J., ECF No. 89 (acknowledging and appending the permanent rules); Bellino's Third Suppl. App. Supp. Bellino's Mot. Partial Summ. J., ECF No. 89-1. Among other provisions, the state fire marshal's rules establish the permitted selling periods, requirements for consumer fireworks retailers, applicable licensing fees, and possible penalties for violations. See Iowa Admin. Code r. 661-265.1 - .51

Bellino contends the Ordinances are not only preempted by SF 489, but also by House File 295 (HF 295). See Am. Compl. ¶ 1, ECF No. 45; 2017 Iowa Legis. Serv. H.F. 295 (West). Enacted March 30, 2017, HF 295 restricts counties' and cities' regulation of "consumer merchandise." ECF No. 45 ¶¶ 17-19. It is not fireworks-specific. House File 295 provides in pertinent part: "A city [or county] shall not adopt an ordinance, motion, resolution, or amendment that sets standards or requirements regarding the sale or marketing of consumer merchandise that are different from, or in addition to, any requirement established by state law." HF 295 § 3 (codified at Iowa Code § 364.3(3)(c) ).

Senate File 489 provides Iowa cities "may by ordinance or resolution prohibit or limit the use of consumer fireworks, display fireworks, or novelties." SF 489 § 8 (codified at Iowa Code § 364.2(6) ); see also Iowa Code § 331.301(17) (providing the same power to a board of supervisors). In response to SF 489, the Cities each enacted ordinances to regulate the sale of fireworks within their city limits. ECF No. 45 ¶¶ 34, 48, 58-59, 71.

Ankeny's Ordinance 1925-which amended Ordinance 1917-is currently in effect and "governs fireworks sales." Ankeny & Pleasant Hill's Ans. to Am. Compl. ¶ 36, ECF No. 50; Bellino's Statement Undisputed Material Facts Supp. Bellino's Mot. Partial Summ. J. ¶ 59, ECF No. 56-1 (acknowledging the City of Ankeny passed Ordinance 1925 in October 2017); see also Bellino's Ex. 7 Supp. Am. Compl., ECF No. 45-7 (setting forth Ordinance 1917). Ordinance 1925 limits fireworks sales to heavy industrial (M-2) districts. See Ankeny & Pleasant Hill's Ex. A Supp. Ans. to Am. Compl., ECF No. 50-1 (setting forth Ordinance 1925).

Boone's Ordinance 2237 eliminates the prior total ban on fireworks sales. Compare ECF No. 56-3 at App. 64-65, with Bellino's Ex. 9 Supp. Compl., ECF No. 1-10 (setting forth the prior version of Boone City Code § 41.12, which stated "[i]t is unlawful for any person to offer for sale, expose for sale, sell at retail, or use or explode any fireworks"). The parties do not dispute Boone's current ordinance limits the sale of fireworks to industrial and commercial zones. Bellino's Resp. Boone & Johnston's Statement Undisputed Material Facts ¶ 36, ECF No. 74-2 (agreeing "Boone has allowed state-licensed consumer firework retailers to operate in industrial or commercial zones" but responding Boone only allowed Bellino to operate for a few days during the summer 2017 selling season).³ Boone's City Code Chapter 175 sets forth standards for commercial and industrial districts. ECF No. 56-3 at App. 66-96.

Johnston Ordinance 979 amends the Johnston City Code and eliminates Johnston's prior total ban on fireworks sales. See Boone & Johnston's Statement Undisputed Material Facts Supp. Boone & Johnston's Mot. Summ. J. ¶ 26, ECF No. 57-1; ECF No. 74-2 ¶ 26; see also Boone & Johnston's Second Suppl. App. Supp. Resist. Bellino's Mot. Partial Summ. J. 001-002, ECF No. 80-2 (setting forth the prior version of Johnston City Code § 41.12). Ordinance 979 states it is "unlawful without a state issued license and a city issued Certificate of Zoning Compliance for any person to offer for sale, consumer fireworks within the corporate limits of the city." ECF No. 56-3 at App. 99. The procedure for obtaining a Certificate of Zoning Compliance is set forth in Johnston Code section 166.05. Id. at 103-04.

Pleasant Hill's Ordinance 836 limits "[t]he sale or display of fireworks" to "[industrial] zoning districts." Ankeny & Pleasant Hill's App. Supp. Ankeny & Pleasant Hill's Mot. Summ. J. APHA 46, ECF No. 54-2. The Ordinance amends a prior ordinance banning the...